BIPA Amendment Passes Legislature, Addresses Damages in BIPA Litigation
Last week, as the Illinois legislative session nears its close, the Illinois House of Representatives voted to enact Senate Bill 2979, the Biometric Information Privacy Act (BIPA) reform amendment that had previously passed out of the Senate, putting the first-ever BIPA amendment merely a signature away from becoming a reality. SB 2979 now makes its way to Gov. J.B. Pritzker’s desk, where it is expected to be signed into law.
SB 2979 is a direct response to the Illinois Supreme Court’s decision last year in Cothron v. White Castle. In Cothron, the Illinois Supreme Court held that a separate violation of BIPA occurs on each unauthorized collection or disclosure of biometric data. Combined with BIPA’s statutory damages provision, this opinion opened the door for the potential of massive “per-scan” damages where up to $1,000/$5,000 of liability could be imposed for each time that an individual used biometric technology. For example, the Cothron opinion contemplated that White Castle’s potential damages based on statutory violations for each and every time that the putative class members scanned their fingers on a time clock at work could exceed $17 billion. While recognizing that potentiality, the Supreme Court also invited the Illinois legislature to “make clear its intent” regarding BIPA’s damages.
SB 2979 is the legislature’s attempt to do just that. It does so by essentially establishing a “per person” damages cap on BIPA’s notice and consent (15(b)) and disclosure (15(d)) provisions. Under the law, when a covered entity violates either section 15(b) or 15(d) multiple times in the same way, with respect to the same individual, the entity is only subject to a single instance of BIPA’s $1,000 or $5,000 statutory damages. In addition to the “per person” cap, SB 2979 clarifies that the written release required by BIPA can be obtained through electronic means.
While the passage of SB 2979 is certainly a positive development for BIPA reform, several of the major trade associations in Illinois opposed the amendment along the way. These include, for example, the Illinois Chamber of Commerce, the Illinois Retail Merchants Association, the Illinois Hotel & Lodging Association, and others. The nature of the opposition across these groups was consistently that: (1) SB 2979 does not expressly apply retroactively to all of the BIPA lawsuits that are currently pending; and (2) the bill does not include an exemption to BIPA for biometric collection/use done for a “security purpose.” In short, the bill does not do enough and there is concern that with the passage of one BIPA amendment, any appetite for further reform will disappear.
With respect to retroactivity, there are good legal arguments that SB 2979 should have retroactive effect even though retroactivity is not explicitly included in the text of the bill because, under the way Illinois courts assess legislative amendments, it only makes procedural changes to BIPA’s damages provision rather than substantive ones. However, in the limited circumstances where plaintiffs are explicitly seeking per-scan damages, we expect that those arguments will be strongly contested.
Ultimately, we do not anticipate SB 2979 having a significant impact on the landscape of BIPA litigation, as most BIPA plaintiffs are not seeking the “per-scan” damages that the amendment forecloses. It will be most clearly helpful to companies who have not yet been sued under BIPA, and may be useful in any BIPA cases that do make it to verdict for instructing the proposition that the legislature does not intend for per-scan damages that are completely ruinous to a business. However, it is unlikely to provide any real deterrence for BIPA litigation or to have a significant impact on the BIPA settlement market, where most settlement discussions have never centered around the potential of per-scan damages.
The question for next year’s legislative session will be whether SB 2979 truly does quench the thirst amongst Illinois legislators for further BIPA reform. While many of the bill’s proponents expressly stated at multiple hearings that they were interested in continuing to find ways to change and improve BIPA, or that they viewed SB 2979 as a good first step, currently there are no signs to suggest that SB 2979 is likely to be the first in a series of incremental steps towards substantive or significant BIPA reform.
SB 2979 is a direct response to the Illinois Supreme Court’s decision last year in Cothron v. White Castle. In Cothron, the Illinois Supreme Court held that a separate violation of BIPA occurs on each unauthorized collection or disclosure of biometric data. Combined with BIPA’s statutory damages provision, this opinion opened the door for the potential of massive “per-scan” damages where up to $1,000/$5,000 of liability could be imposed for each time that an individual used biometric technology. For example, the Cothron opinion contemplated that White Castle’s potential damages based on statutory violations for each and every time that the putative class members scanned their fingers on a time clock at work could exceed $17 billion. While recognizing that potentiality, the Supreme Court also invited the Illinois legislature to “make clear its intent” regarding BIPA’s damages.
SB 2979 is the legislature’s attempt to do just that. It does so by essentially establishing a “per person” damages cap on BIPA’s notice and consent (15(b)) and disclosure (15(d)) provisions. Under the law, when a covered entity violates either section 15(b) or 15(d) multiple times in the same way, with respect to the same individual, the entity is only subject to a single instance of BIPA’s $1,000 or $5,000 statutory damages. In addition to the “per person” cap, SB 2979 clarifies that the written release required by BIPA can be obtained through electronic means.
While the passage of SB 2979 is certainly a positive development for BIPA reform, several of the major trade associations in Illinois opposed the amendment along the way. These include, for example, the Illinois Chamber of Commerce, the Illinois Retail Merchants Association, the Illinois Hotel & Lodging Association, and others. The nature of the opposition across these groups was consistently that: (1) SB 2979 does not expressly apply retroactively to all of the BIPA lawsuits that are currently pending; and (2) the bill does not include an exemption to BIPA for biometric collection/use done for a “security purpose.” In short, the bill does not do enough and there is concern that with the passage of one BIPA amendment, any appetite for further reform will disappear.
With respect to retroactivity, there are good legal arguments that SB 2979 should have retroactive effect even though retroactivity is not explicitly included in the text of the bill because, under the way Illinois courts assess legislative amendments, it only makes procedural changes to BIPA’s damages provision rather than substantive ones. However, in the limited circumstances where plaintiffs are explicitly seeking per-scan damages, we expect that those arguments will be strongly contested.
Ultimately, we do not anticipate SB 2979 having a significant impact on the landscape of BIPA litigation, as most BIPA plaintiffs are not seeking the “per-scan” damages that the amendment forecloses. It will be most clearly helpful to companies who have not yet been sued under BIPA, and may be useful in any BIPA cases that do make it to verdict for instructing the proposition that the legislature does not intend for per-scan damages that are completely ruinous to a business. However, it is unlikely to provide any real deterrence for BIPA litigation or to have a significant impact on the BIPA settlement market, where most settlement discussions have never centered around the potential of per-scan damages.
The question for next year’s legislative session will be whether SB 2979 truly does quench the thirst amongst Illinois legislators for further BIPA reform. While many of the bill’s proponents expressly stated at multiple hearings that they were interested in continuing to find ways to change and improve BIPA, or that they viewed SB 2979 as a good first step, currently there are no signs to suggest that SB 2979 is likely to be the first in a series of incremental steps towards substantive or significant BIPA reform.
