The Second Circuit Weighs In On Tidal Wave Of Class Actions Under The Illinois Biometric Privacy Act

by Seyfarth Shaw LLP
Contact

Seyfarth Synopsis:  As biometric technology has become more advanced and affordable, more companies and employers have begun implementing procedures and systems that rely on biometric data.  Given the serious repercussions of compromised biometric data, a number of states have proposed or passed laws regulating the collection and storage of biometric data, including Illinois through the passage of the Illinois Biometric Privacy Act (“BIPA”) – the only biometric statute which provides a private cause of action.

Plaintiffs’ class action attorneys have taken notice, as the number of class action lawsuits alleging violations of the BIPA in Illinois has surged in recent months.  As more and more employers are utilizing biometric technology for various purposes, including timekeeping, employers are at a significant risk of becoming a target of class action litigation under the BIPA if it fails to comply with the requirements of the statute.  Cases brought pursuant to the BIPA are akin to other “gotcha” statutory class actions – highly popular with the plaintiffs’ bar due to the inclusion of statutory damages and a provision for attorneys’ fees.

The theories underlying BIPA class actions, and the defenses thereto, remain largely untested.  However, the Second Circuit became the first U.S. Court of Appeals to wade into the rising tide of litigation under the BIPA in Santana v. Take Two Interactive Software, 2017 U.S. App. LEXIS 23446 (2d Cir. Nov. 21, 2017), by affirming the district court’s dismissal of the case based upon a lack of Article III standing under the principles announced by the Supreme Court in Spokeo v. Robins, 136 S. Ct. 1540 (2016), but vacating the district court’s finding that plaintiffs were not “aggrieved by” a violation the BIPA (e.g., failed to state a cause of action under the statute due to a failure to plead actual damages).

The decision sheds light on the viability of certain potential employer defenses in BIPA class actions, particularly at the motion to dismiss stage.

***

Requirements Of The BIPA

Notice And Consent

 The BIPA prohibits companies from collecting employees’ biometric information until the company notifies the employee in writing that the information is being collected. Specifically, the written notice must inform the individual of the “specific purpose and length of term for which a biometric identifier or biometric information is being collected, stored and used.” 740 ILCS § 14/15(b).  Likewise, a company must obtain a written release from the individual enabling it to collect and store the information.  In the employment context, “written release” is defined as a “a release executed by an employee as a condition of employment.”  740 ILCS § 14/10.

Written Policy

The BIPA also requires companies to develop a written policy establishing a retention schedule and guidelines for permanently destroying biometric information when the initial purpose for collecting them has been satisfied or within three years of the employee’s last interaction with the employer, whichever occurs first.  740 ILCS § 14/15(a).  The policy must be made available to the public.  Id.

Disclosure To Third-Parties

In addition, a company may not disclose biometric information to a third party unless: it obtains consent for disclosure from the individual; the disclosure completes a financial transaction requested by the individual; the disclosure is required by law; or the disclosure is required by a valid warrant or subpoena.  740 ILCS § 14/15(d).

Standard Of Care

Also, the BIPA requires that a company use “the reasonable standard of care” within its industry for storing, transmitting and protecting biometric information and act “in a manner that is the same as or more protective than the manner in which the [company] stores, transmits and protects other confidential and sensitive information.”  Id. § 14/15(e).

Case Background

In Santana, Plaintiffs alleged that Defendant violated the BIPA based on the use of a feature in the NBA 2K15 and NBA 2K16 video games, which contain a feature called “MyPlayer” which allows gamers to create a personalized basketball player that has a realistic 3-D rendition of the gamer’s face.  The 3-D mapping process used cameras to capture a scan of the gamer’s facial geometry to disseminate a realistic rendition of the gamer’s face which requires gamers to hold their faces within 6 to 12 inches of the camera and slowly turn their heads during the scanning process.  Id. *2-3.  To use the feature, gamers must also first agree to terms and conditions acknowledging that the face scan will be visible and may be recorded during gameplay and requires gamers to “agree and consent to such uses.”  Id.

Plaintiffs alleged that Defendant: (1) collected their biometric data without their informed consent; (2) disseminated their biometric data to others during game play without their informed consent; (3) failed to inform them in writing of the specific purpose and length of term for which their biometric data would be stored; (4) failed to make publicly available a retention schedule and guidelines for permanently destroying plaintiffs’ biometric data; and (5) failed to store, transmit, or protect from disclosure plaintiffs’ biometric data by using a reasonable standard of care or in a manner that is at least as protective as the manner in which it stores, transmits, and protects other confidential and sensitive information.  Id. *4.

Defendant moved to dismiss Plaintiffs’ claims for lack of Article III standing and for failure to state a cause of action under the statute (i.e., lack of “statutory standing”).  The district court granted the motion on both grounds and dismissed the action with prejudice, and Plaintiffs appealed.

The Second Circuit’s Decision

In its ruling of November 21, 2017, the Second Circuit entered a summary order affirming the district court’s decision insofar as it held that plaintiffs lacked Article III standing, but vacating the decision in part insofar as it held that plaintiffs lacked a statutory cause of action as “aggrieved” parties.

In regards to Article III standing, the Second Circuit held that “none of the alleged procedural violations [] raise[d] a material risk of harm” to Plaintiffs arising out of the use, collection, or disclosure of an individual’s biometric data.  Id. *7.  In reaching this conclusion the Second Circuit noted that no reasonable person would believe that the feature of the game at issue was anything other than a facial scan and Plaintiffs did “not plausibly assert (beyond a mere conclusory allegation) that they would have withheld their consent had Take-Two included additional language in its consent disclaimer.  Id. *8.  Plaintiffs’ alleged violations of the BIPA’s notice provisions similarly failed to raise a material risk of harm because Plaintiffs did not allege that Defendant had not or will not destroy their biometric data within the period specified by the statute nor did Plaintiffs allege that Defendant lacked such protocols or that its policies were inadequate and “there is accordingly no material risk that [Defendant’s procedural violations have resulted in plaintiffs’ biometric data being used or disclosed without their consent.  Id. *9.  Finally, the Court was not persuaded by Plaintiffs attempts to “manufacture an injury” by alleging that they would be deterred from using biometric technology in the future because “Plaintiffs’ fear, without more, is insufficient to confer Article III injury-in-fact.  Id. *11.

Despite this ruling, the Second Circuit remanded to the district court with the instruction that the district court shall enter dismissal without prejudice finding that the district court did not have subject matter jurisdiction to ultimately find that plaintiff did not have “statutory standing,” e.g., that Plaintiffs had not alleged a cause of action under the statute – specifically, that Plaintiffs were not “aggrieved by” a violation of the statute because they did not allege “actual damages.”  The Second Circuit held:

Since the statutory standing arguments here are based on differing constructions of the term ‘aggrieved party’ as used in BIPA, the district court’s resolution of the issue was a judgment on the merits that could not be properly addressed absent subject matter jurisdiction.  The district court was therefore without power to dismiss the complaint with prejudice for failure to state a cause of action under the statute.

Id. at *13.

Implications For Employers

The Second Circuit’s ruling represents a victory for employers to the extent that it will make it more difficult for plaintiffs to plead and maintain Article III standing to survive a motion to dismiss in federal courts.  On the other hand, the Second Circuit opinion did not bring any clarity as to who a “person aggrieved” is for purposes of the statute and whether plaintiffs must plead actual damages in order to state a cause of action under the BIPA.

The practical import of this ruling is that the battleground for defenses based on subject-matter jurisdiction and standing grounds and a lack of statutory standing (e.g. failure to plead a cause of action because plaintiffs were not “aggrieved by” a violation of the statute) will likely shift back to the Illinois state courts, which (despite being similar in many respects) have different and independent standing principles from federal courts.

Courts remain split as whether plaintiffs alleging violations under the BIPA must allege actual damages in order to state a cause of action, with state courts generally finding that actual damages are not necessary to plead a cause of action under the statute.   Compare McCollough v. Smarte Carte, Inc., 2016 WL 4077108, at *4 (N.D. Ill. Aug. 1, 2016) (dismissing BIPA action for lack of actual damages) and Rottner v. Palm Beach Tan, Inc., 2015-CH-16695 (BIPA requires showing of actual damages) with Monroy v. Shutterfly, Inc., 2017 WL 4099846, at *9 (N.D. Ill. Sept. 15, 2017) (“[w]hile the matter is not free from doubt, the court declines to hold that a showing of actual damages is necessary in order to state a claim under the BIPA); Rosenbach v. Six Flags Entertainment Corporation et al., 16 CH 13 (Cir. Court, Lake County, IL, June 17, 2016) (finding sufficient statutory standing for the plaintiff to survive a motion to dismiss where the plaintiff had provided fingerprints to Six Flags as part of an annual pass program to the amusement park); Sekura v. Krishna Schaumberg Tan, Inc., 2017 WL 1181420 (Cir. Ct., Cook County, IL, Feb. 9, 2017) (denying motion to dismiss BIPA claim and noting that ”the term ‘aggrieved’ has been used consistently in numerous statutes to provide claims for the infringement of granted legal rights without the need to plead specific or actual damages” and “it is not this court’s role to determine whether BIPA was well intentioned or even well drafted, only to determine, in this case, whether it requires that plaintiffs plead actual damages to state claims thereunder.”)

In sum, while the Second Circuit’s opinion provides employers with strong support for arguments based on a lack of subject-matter jurisdiction and standing (particularly in federal courts), arguments by employers at the motion to dismiss stage that a plaintiff lacks statutory standing (e.g., whether the statute requires a plaintiff to plead actual damages to state a cause of action) will likely have to be resolved by Illinois state courts and any such arguments in federal court may result in remand to state court, or a dismissal without prejudice allowing plaintiffs to re-file in state court.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Seyfarth Shaw LLP | Attorney Advertising

Written by:

Seyfarth Shaw LLP
Contact
more
less

Seyfarth Shaw LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.