Seyfarth Synopsis: This week the U.S. Court of Appeals for the Seventh Circuit issued its long-awaited decision in Cothron v. White Castle Sys., No. 20-3202, 2021 U.S. App. LEXIS 37593 (7th Cir. Dec. 20, 2021), on whether claims asserted under Sections 15(b) and 15(d) of the Illinois Biometric Information Protection Act ("BIPA") accrue only once upon the initial collection or disclosure of biometric information, or each time a private entity collects or discloses biometric information. In lieu of answering the question, upon Plaintiff's request, the Seventh Circuit certified the issue to the Illinois Supreme Court.
This ruling is a major development in the BIPA class action landscape, as the Illinois Supreme Court's forthcoming ruling will likely have a major impact on statute of limitations defenses and damages calculations.
Case Background
Plaintiff alleged that shortly after she began working for White Castle in 2004, White Castle introduced a system that required employees to scan their fingerprints to access pay stubs and work computers. Based on White Castle's use of that system, Plaintiff alleged that White Castle violated Sections 15(b) and 15(d) of the BIPA. Section 15(b) provides 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. Section 15(d) provides that a private entity may not "disclose, redisclose, or otherwise disseminate" biometric data without consent. Plaintiff brought a class action asserting these claims.
White Castle moved for judgment on the pleadings, arguing that the suit was untimely since the claim accrued in 2008 when the plaintiff's first fingerprint scan occurred after the BIPA went into effect Id. at 2. Plaintiff countered that every unauthorized finger-print scan amounted to a separate violation of the statute, so a new claim accrued with each scan. As such, Plaintiff argued that the lawsuit was timely for the scans within the limitations period.
The District Court rejected White Castle's "one time only" theory of claim accrual and denied the motion. Id. However, the District Court found the question close enough to warrant an interlocutory appeal under 28 U.S.C. § 1292(b). During the appeal, Plaintiff thereafter asked the Seventh Circuit to certify the question to the Illinois Supreme Court.
The Seventh Circuit's Ruling
The Seventh Circuit agreed to Plaintiff's request to certify the question to the Illinois Supreme Court, and directed it to answer the following question: "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?" Id. at *18-19.
White Castle argued that the District Court erred in denying its motion for judgment on the pleadings for two reasons. First, White Castle invoked a special accrual principle applicable in cases involving defamation and other privacy torts known as the single-publication rule. Second, White Castle argued that the Illinois Supreme Court's reasoning in Rosenbach v. Six Flags 129 N.E.3d 1197, 1200 (Ill. 2019), actually pointed to the opposite conclusion, i.e., that Plaintiff was "aggrieved" only by the initial violations of sections 15(b) and 15(d). Id. at 10. The Seventh Circuit held that while White Castle offered "a plausible reading of the statute," the relevant statutory language "does not clearly say that a claim accrues only once." Id. at 14.
Further, the Seventh Circuit opined that White Castle's "one-and-done theory makes sense if we accept that subsequent collections or disclosures of biometric data do not work a harm that the Act seeks to prevent. And more importantly, focusing on what it means to be 'aggrieved' by a violation of the statute gives this theory a plausible hook in the statutory text." Id. at 14-15. However, the Seventh Circuit also observed that White Castle's "theory also has some notable weak spots. The premise - two violations aren't worse than one - may simply be wrong." Id.
Accordingly, the Seventh Circuit held that "the practical implications of either side's interpretation, to the extent that Illinois courts would weigh them, do not decisively tilt one way or the other." Id. at 16. The Seventh Circuit thus certified this issue to the Illinois Supreme Court.
Implications For Employers
Given that the BIPA statute does not have an explicit statute of limitations, the issue of claim-accrual may be dispositive for many pending and future BIPA class actions. Further, the viability of recovering for each individual scan (as opposed to only the first scan) could have major implications for damages calculations. Accordingly, employers should closely monitor this Illinois Supreme Court's review of this case.
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