FYI: IL Sup Ct Rules Separate Claims Accrue Under BIPA for Each Alleged Violation

The Illinois Supreme Court, after receiving a certified question from the U.S. Court of Appeals for the Seventh Circuit, recently held that a separate claim accrues under the Illinois Biometric Information Privacy Act each time a private entity improperly scans or transmits an individual's biometric identifier or information.

 

A copy of the opinion is available at:  Link to Opinion

 

A restaurant employee in Illinois filed a putative class action on behalf of all of that restaurant's Illinois employees. The restaurant required its employees to scan their fingerprints to access their pay stubs and computers. A third-party vendor verified each scan and authorized the employee's access.

 

The complaint alleged that the restaurant implemented this biometric-collection system in violation of the Illinois Biometric Information Privacy Act ("BIPA"), 740 ILCS 14/15(b) and (d), because the restaurant did not seek the employee's consent to acquire her fingerprint biometric data until 14 years after she began her employment.

 

The restaurant argued that the action was untimely, stating that the employee's claim accrued in 2008 when it first obtained her biometric data after BIPA's effective date. The employee responded that a new claim accrued each time she scanned her fingerprints and the restaurant sent her biometric data to its third-party authenticator.

 

The trial court ultimately agreed with the employee. The restaurant timely appealed, and the Seventh Circuit certified the following question to the Illinois Supreme Court:

 

"Do section 15(b) and 15(d) claims accrue each time a private entity scans a person's biometric identifier and each time a private entity transmits such a scan to a third party, respectively, or only upon the first scan and first transmission?"

 

When answering this question, the Illinois Supreme Court assumed that the restaurant's alleged collection of the employees' fingerprints and transmission to a third party was done in violation of BIPA.

 

Section 15(b) of the Act states that a private entity may not "collect, capture, purchase, receive through trade, or otherwise obtain" a person's biometric data without first providing notice to and receiving consent from the person. Furthermore, section 15(d) instructs that a private entity may not "disclose, redisclose, or otherwise disseminate" biometric data without consent.

 

The Illinois Supreme Court agreed with the employee that the plain language of section 15(b) supports her interpretation that a new claim accrued every time she scanned her fingerprint.

 

According to the Court, "collect" means to "to receive, gather, or exact from a number of persons or other sources." Webster's Third New International Dictionary 444 (1993). Furthermore, "capture" means "to take, seize, or catch." Id. at 334.

 

The Court disagreed with the restaurant that these are things that can happen only once because it noted that the record showed that the restaurant obtained an employee's fingerprint and stored it in its database. The employee was then required to use his or her fingerprint to access pay stubs or company computers. With the subsequent scans, the fingerprint was compared to the stored copy of the fingerprint. The Court reasoned that the restaurant failed to explain how such a system could work without collecting or capturing the fingerprint every time the employee needed to access his or her computer or pay stub.

 

Similarly, the Illinois Supreme Court held that the plain language of section 15(d) applied to every transmission to a third party.

 

The Court determined that the principal meaning of "redisclose" is "[t]o disclose again." See WordSense Dictionary, https://www.wordsense.eu/redisclose/ (last visited Jan. 7, 2023) [https://perma.cc/ 63VU-RRTK]. Nevertheless, the Court concluded that it did not need to specifically determine the meaning of "redisclose" in section 15(d) because the other terms in that section are broad enough to include repeated transmissions to the same party. In the Court's view, "disclose" also means to "expose to view" (Webster's Third New International Dictionary 645 (1993)), and Webster's gives as an example something happening more than once: "the curtain rises to [disclose] once again the lobby" (id.).

 

As the Court pointed out, a fingerprint scan system requires a person to expose his or her fingerprint to the system in order that the print may be compared with the stored copy, and this happens each time a person uses the system. Moreover, the Court observed that section 15(d) has a catchall provision that broadly applies to any way that an entity may "otherwise disseminate" a person's biometric data. "Disseminate" means "to spread or send out freely or widely." Id. at 656. The restaurant asserted that this is something that can only happen once, but the Court found that it offered no definitional support for that assertion.

 

Accordingly, the Illinois Supreme Court concluded that the plain language of section 15(b) and 15(d) demonstrates that a claim accrues under BIPA with every scan or transmission of biometric identifiers or biometric information without prior informed consent. Accordingly, the Court answered the certified question in favor of the employee.

 

 

 

Ralph T. Wutscher
Maurice Wutscher LLP
The Loop Center Building
105 W. Madison Street, 6^th Floor
Chicago, Illinois 60602
Direct:  (312) 551-9320
Fax: (312) 284-4751

Mobile:  (312) 493-0874
Email: rwutscher@MauriceWutscher.com

 

Admitted to practice law in Illinois

 

 

 

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FYI: 9th Cir Vacates Summary Judgment in Favor of Defendant for CAFA "Amount in Controversy" Deficiencies

The U.S. Court of Appeals for the Ninth Circuit recently held that it could sua sponte question a defendant's assertions of jurisdiction under the federal Class Action Fairness Act (CAFA), and that the record did not sufficiently demonstrate that CAFA's amount-in-controversy requirement was met here because the requisite $5 million amount was not evident from the face of the complaint nor the defendant's notice of removal and supporting declaration.

 

In so ruling, the Ninth Circuit vacated the trial court's summary judgment ruling in favor of the defendant, and remanded for proceedings to determine CAFA jurisdiction.

 

A copy of the opinion is available at:  Link to Opinion

 

A consumer filed individual and putative class claims in Montana state court against an insurance company after the company failed to advance pay the consumer's medical bills and lost wages following a car accident caused by a separate driver insured by the company. The consumer alleged, among other things, common law bad faith and violations of Montana's Unfair Trade Practices Act (UTPA).

 

The insurer removed the lawsuit to federal court, asserting jurisdiction under the Class Action Fairness Act (CAFA), 28 U.S.C. § 1332. Neither the consumer nor the federal trial court questioned whether CAFA jurisdiction was proper.

 

Following removal, the insurer moved to dismiss the action, which the trial court granted in part and denied in part. The insurer also moved for summary judgment. The trial court stayed briefing on class certification and class-related discovery pending resolution of the summary judgment motion. Following a magistrate judge's recommendation, the trial court granted summary judgment for the insurer and denied the borrower's motion for class certification. The borrower timely appealed.

 

Under CAFA, federal jurisdiction exists over class actions involving at least 100 members who are minimally diverse from the defendants and when the amount-in-controversy exceeds $5 million. 28 U.S.C. § 1332(d). A defendant's notice of removal to federal court must "contain[] a short and plain statement of the grounds for removal." 28 U.S.C. § 1446(a). Furthermore, "the defendant's amount-in-controversy allegation should be accepted when not contested by the plaintiff or questioned by the court." Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81, 89 (2014).

 

The Ninth Circuit began its analysis by holding that, although neither the consumer nor the trial court questioned whether subject-matter jurisdiction existed under CAFA, a court of appeals may raise this issue sua sponte on appeal if it questions jurisdiction. The Court noted that it has an independent obligation to ensure that both the trial court and the court of appeals have subject-matter jurisdiction. See, e.g., Mitchell v. Maurer, 293 U.S. 237, 244 (1934).

 

Therefore, having determined that it may sua sponte question a defendant's allegation of CAFA jurisdiction, the Ninth Circuit concluded that the record did not establish that CAFA's amount-in-controversy requirement was met here.

 

In removing a case to federal court, a defendant need only make a "plausible allegation that the amount-in-controversy exceeds the jurisdictional threshold." Dart Cherokee, 574 U.S. at 87. But when the asserted amount in controversy is challenged or questioned, more is required, pursuant to 28 U.S.C. § 1446(c)(2)(B). Id. at 87, 89. Both sides must have an opportunity to "submit proof," and the defendant has the burden to show that the amount-in-controversy requirement is met by a preponderance of the evidence. See id. at 88–89; see also § 1446(c)(2)(B). In meeting its burden, the defendant may rely on reasonable assumptions in calculating the amount in dispute. Jauregui v. Roadrunner Transp. Servs., Inc., 28 F.4th 989, 993 (9th Cir. 2022).

 

Here, the Ninth Circuit decided that CAFA's amount-in-controversy requirement was not met because the $5 million amount was not evident from the face of the complaint nor the insurer's notice of removal and supporting declaration. The Court observed that the consumer's claimed damages in his individual claim were under $1,000 and there was little indication as to the average amount of damages the purported class members may have suffered.

 

Furthermore, it was unclear how large the purported class was because Montana's statute of limitations for a common law bad-faith claim is three years, see Brewington v. Emps. Fire Ins. Co., 297 Mont. 243, 249 (1999), and the statute of limitations for a UTPA claim is only two years from the date of violation for an insured and one year within the date of settlement or entry of judgment on the underlying claim for a third-party claimant. Mont. Code Ann. § 33-18-242(7).

 

Accordingly, the Ninth Circuit vacated the trial court's decision and remanded for the trial court to conduct the necessary proceedings to determine whether the insurer could show by a preponderance of the evidence that the $5 million amount-in-controversy requirement was satisfied.

 

 

 

Ralph T. Wutscher
Maurice Wutscher LLP
The Loop Center Building
105 W. Madison Street, 6^th Floor
Chicago, Illinois 60602
Direct:  (312) 551-9320
Fax: (312) 284-4751

Mobile:  (312) 493-0874
Email: rwutscher@MauriceWutscher.com

 

Admitted to practice law in Illinois

 

 

 

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