May 06, 2020

Seventh Circuit: BIPA Claims Can Be Heard in Federal Court

Class action litigation under the Illinois Biometric Information Privacy Act (BIPA) has exploded over the last several years. An ongoing issue has been the proper forum for such cases, namely whether there is constitutional, Article III “standing” for BIPA claims to proceed in federal court. On May 5, 2020, the Seventh Circuit Court of Appeals, in Bryant v. Compass Group USA, Inc., No. 20-1443, added much-needed clarity to the issue by holding that a federal court could hear certain BIPA claims.

Background

In BIPA lawsuits, plaintiffs typically raise some combination of: (1) claims under BIPA, Section 15(a) for failure to institute a publicly-available biometric data retention policy; (2) claims under BIPA, Section 15(b) for failure to provide written notice and obtain informed written consent before collecting biometric data; and (3) claims under BIPA, Section 15(d) for improper disclosure of biometric data.

Before the Bryant decision, federal courts wrestled with whether some or all of these claims could be heard in federal court, on the basis of whether there was standing. To satisfy Article III standing, the party invoking federal jurisdiction must show that the plaintiff suffered an actual or imminent, concrete and particularized injury-in-fact. A bare procedural violation, absent concrete harm, has been deemed not to satisfy Article III’s injury-in-fact requirement.

Bryant Case

In Bryant, the plaintiff’s workplace had vending machines that allegedly required users to scan their fingerprint for payment. The plaintiff, who allegedly set up a user account during orientation, brought a class action under BIPA because the defendant allegedly (i) did not have a publicly available retention schedule under 15(a), and (ii) did not comply with Section 15(b)’s notice and consent requirements before collecting her fingerprint.

The defendant removed the case to federal court on the basis of the Class Action Fairness Act, 28 U.S.C. § 1332(d), based on diversity of citizenship and an amount in controversy exceeding $5 million. The Northern District of Illinois remanded the case to state court due to lack of Article III standing. Defendant thereafter appealed to the Seventh Circuit.

The Seventh Circuit’s Decision on Article III Standing

On May 5, 2020, the Seventh Circuit reversed the remand decision, finding that the case was properly removed to federal court. The court held that the Section 15(b) claims did not reflect a purely procedural violation. Instead, the defendant “withheld substantive information to which [the plaintiff] was entitled and thereby deprived her of the ability to give the informed consent section 15(b) mandates.” The court further found that “[e]quipped with the missing information, she may have chosen not to use the vending machines … [o]r she may have opted for the convenience of the machines.” This “deprivation” constituted a “concrete injury-in-fact” sufficient for standing. Accordingly, the court held that the Section 15(b) claim could proceed in federal court.

However, the Seventh Circuit concluded that not having a public retention schedule was a bare procedural violation preventing standing. The court found that “the duty to disclose under Section 15(a) is owed to the public generally, not to particular persons whose biometric information the entity collects.”

Takeaways

The Bryant decision could potentially alter the procedural landscape for BIPA class action litigation. Employers and other entities that generally prefer to defend against such cases in federal rather than state court have a stronger chance of successfully removing these cases to federal court (assuming diversity jurisdiction requirements are met).

However, because the Seventh Circuit found no Article III standing under Section 15(a), some plaintiffs may choose to pursue solely 15(a) claims in order to avoid removal to federal court. And, conceivably, there could be potential efforts to “claim split” between state and federal courts.

Finally, because the Seventh Circuit found that 15(a) claims involve injuries to the public, not to a particular plaintiff, it remains to be seen whether courts will reject damages awards based on 15(a) violations. If so, defendants may have one more tool in their arsenal to stem the tide of BIPA class actions.

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