Case Note: Federal District Court holds recent BIPA amendment applies to claims arising before its effective date.

In Gregg v. Central Transport LLC, a U.S. District Court for the Northern District of Illinois issued a decision earlier this week holding that a recent amendment to Illinois’ Biometric Information Privacy Act (BIPA)—which clarifies individuals can only recover one statutory penalty when their biometric information is collected in violation of the law—applies to claims regardless of whether they arose prior to the amendment’s effective date, August 2, 2024. The decision provides support for significantly limiting the amount of penalties plaintiffs may recover in lawsuits involving allegations of BIPA violations that occurred before this past August.

Background

John Gregg, a former Central Transport employee, filed a putative class action alleging the company violated BIPA by using finger-scanning timeclocks without providing proper notice or obtaining informed consent. In his complaint, Gregg alleged his biometric identifiers were “used, collected, otherwise obtained, and/or stored” in violation of BIPA each time he clocked in and out of work, which was “no less than four times each working day” from “October 1, 2023 until October 31, 2023.”

BIPA, the only biometric privacy law that grants individuals a private right of action regardless of whether they suffered any actual damages, imposes statutory penalties of $1,000 for negligent violations of the law, and $5,000 for reckless or intentional violations. On August 2, 2024, Illinois Governor J.B. Pritzker signed Public Act 103-0769, a bill that amended certain provisions of BIPA, into law. Most importantly for companies operating in Illinois, the amendment overturned the Illinois Supreme Court’s holding in Cothron v. White Castle System, Inc. that an individual can recover statutory penalties for each separate biometric scan. The bill, however, did not indicate whether the Illinois legislature intended for its amendments to apply to claims arising prior to the bill’s effective date. Until this week, that question had not yet been answered by any court.

Central Transport’s Motion to Dismiss

Central Transport raised that question by filing a motion to dismiss, arguing that the Court lacked federal subject matter jurisdiction over the case because the “amount in controversy” did not exceed $75,000. In support of that argument, the company contended that BIPA’s recent amendment foreclosed Gregg’s “per-scan” theory of damages, and that he was limited to recovery of a single statutory penalty for each of his three claims—a maximum of $15,000. Gregg opposed the motion, arguing that because the alleged violations occurred before the amendment’s effective date, he could recover a separate statutory penalty for each individual scan of his biometrics and that the amount placed in controversy by his claims, therefore, well exceeded the jurisdictional minimum.

The Court’s Analysis

The Court sided with Central Transport. The Court recognized there is a general presumption that the legislature intends to change existing law when it passes a statutory amendment. Under such circumstances, courts must determine whether that change should be applied retroactively. However, where circumstances surrounding the amendment’s enactment show the legislature only intended to clarify (rather than change) the original law, the amendment should be applied as though it existed at the time the legislature passed the original statute. That, the Court held, is what happened when the legislature passed its recent amendment to BIPA.

To reach that conclusion, the Court noted that the amendment’s adoption occurred shortly after the Illinois Supreme Court in Cothron “expressly invited” the legislature to “make clear its intent regarding the assessment of damages under [BIPA].” That the legislature took the Illinois Supreme Court up on that invitation served as convincing evidence to the Court that BIPA’s amendment was merely intended to clarify the original language of the statute, rather than introduce new law. Under those circumstances, the Court explained, the amendment applies to determine the amount Gregg could recover regardless of the fact that his claims arose before the amendment became effective. As a result, he could only recover a maximum of $5,000 for each of the three BIPA violations he alleged, for a total of $15,000. Because that is below the jurisdictional threshold required for the claims to proceed in federal court, the Judge granted Central Transport’s motion and dismissed the case.

Key Takeaway

Though the decision will not be binding, the Court’s analysis may serve as persuasive authority in support of companies avoiding the potentially ruinous penalties they face when targeted by plaintiffs pursuing a per-scan damages theory in cases involving the collection of data that occurred before BIPA’s recent amendment. The decision may be appealed, however, and how Illinois state courts decide the issue is to be seen. Companies operating in Illinois should continue to ensure strict compliance with BIPA’s requirements or risk significant exposure to class action liability that nonetheless exists.

Scopelitis will continue to monitor developments in this area of the law. The firm has a robust Workplace and Data Privacy Practice that is familiar with drafting privacy-related policies and defending individual and class action litigation involving privacy issues. If you have questions about BIPA or any other privacy-related matter, please contact Chip Andrewscavage, Andy Butcher, Jared Kramer, Matt Payne, or Dylan Goetsch.