New Trial Sought Following $228 Million Judgment In Landmark BIPA Class Action

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Alex W. Karasik

Duane Morris Synopsis:  In Rogers v. BNSF Railway Co., Case No. 19-CV-03083 (N.D. Ill.), the first federal court jury trial in a case brought under the novel Illinois Biometric Information Privacy Act (“BIPA”), the plaintiffs secured a verdict in favor of the class of 45,000 workers against Defendant BNSF. After a week-long trial in the U.S. District Court for the Northern District of Illinois in Chicago, the jury found that BNSF recklessly or intentionally violated the law 45,600 times. The Court thereafter entered against BNSF for $228 million. Post-trial motions are now before the Court, which raise significant issues for all companies that use biometric equipment.

On November 9, 2022, Defendant BNSF Railway Co. filed a motion for a new trial under Rule 59(a) or to reduce the damages award under Rule 59(e). It argues that none of the 45,000 class members suffered any actual harm. It also raised constitutional concerns about the BIPA.

This latest development suggests that BNSF is pulling out all the stops to challenge the precedent-setting $228 million judgment. The outcome of this motion and future appeals will profoundly shape the privacy class action landscape.

Case Background

As we blogged about here, Plaintiff filed a class action lawsuit alleging that BNSF unlawfully required truck drivers entering the Company’s facilities to provide their biometric information through a fingerprint scanner. He claimed that BNSF collected the drivers’ fingerprints without first obtaining informed written consent or providing a written policy that complied with the BIPA and therefore violated sections 15(a) and (b) of the BIPA. BNSF argued that it did not operate the biometric equipment and instead sought to shift blame to a third-party vendor who operated the biometric equipment that collected drivers’ fingerprints.

The case proceeded before a jury in federal court in Chicago. The proceeding was closely watched, as it represented the very first time any class action had gone to a full trial with claims under the BIPA. The trial lasted five days. However, the jurors deliberated for just over an hour. Following the jury’s finding of liability, the Court entered a judgment against BNSF in the amount of $5,000 per violation, for a total amount of $228 million.

BNSF’s Motion For A New Trial Or Amended Judgment

BNSF renewed its motion for judgement as a matter of law pursuant to Federal Rule of Civil Procedure Rule 50(b), following the Court’s denial of BNSF’s Rule 50(a) motion at trial. In the alternative, BNSF moved for a new trial under Rule 59(a), or to reduce the damages award under Rule 59(e).

First, BNSF argues that there was insufficient evidence for the jury to find that BNSF violated the BIPA. Id. at *3. In support of that argument, BNSF cited testimony from its former Director of Technology Services that BNSF did not collect or obtain biometrics from truck drivers in Illinois, that the biometric data was stored on another entity’s server, and that BNSF did not maintain a copy of any of that data. Id. at *4.

Second, BNSF argues that it is entitled to judgment as a matter of law or a new trial, or at least a significant reduction in damages, because there was insufficient evidence for a rational jury to conclude that BNSF violated the BIPA recklessly or intentionally 45,600 times — which is the basis for the $228 million damages award.  Id. at *5-6. BNSF claims that there was no evidence that BNSF even learned about the BIPA until April 2019. Therefore, BNSF argued, no rational jury could have inferred from this evidence that BNSF consciously disregarded or intentionally violated the rights of Plaintiff and the class members at any point, much less for the full class period starting in April 2014.

Third, BNSF argued that the Court’s award of $228 million in damages where Plaintiff admits he and the members of the class have suffered no actual harm violates the Due Process Clause and Excessive Fines Clause of the U.S. Constitution. BNSF points out that, “It is undisputed that neither Plaintiff nor any member of the class has suffered any actual harm from any alleged violation of BIPA. Given that the agreed value of the class’s injury is zero dollars, any award would be disproportional to such nonexistent harm.”  Id. at *8-9.

Accordingly, BNSF seeks relief that the Court should enter judgment as a matter of law against Plaintiff and in favor of BNSF; or in the alternative, the Court should grant BNSF a new trial, or substantially reduce the damages award against BNSF.

The ball is now in Plaintiff’s court to respond to the motion. Further proceedings will then await the parties after full briefing of the post-trial motion.

Implications For Employers

BNSF’s filing of this motion indicates that the Company will not be going down (to the tune of $228 million) without a fight. The ultimate outcome of this motion, and any potential Seventh Circuit appeals, will be carefully scrutinized by both the plaintiff class action bar and businesses throughout Illinois and beyond.

Employers not only should continue to monitor this groundbreaking privacy class action lawsuit, but also ensure their strategic compliance plans are sufficient in regards to biometric privacy laws.

Illinois Federal Court Rejects Efforts To Dismiss BIPA Claims Involving Virtual Try-On Technology

By Gerald L. Maatman, Jr., Gregory Tsonis, and Kelly Bonner

Duane Morris Takeaways – In a significant decision for retailers, Judge Manish Shah of the U.S. District Court for the Northern District of Illinois recently denied in part Defendant Estée Lauder’s motion to dismiss proposed class action claims that its consumer “try-on” technology violated the Illinois Biometric Information Privacy Act (“BIPA”).  The Court rejected Defendant’s personal jurisdiction argument, as well as claims that its website terms and conditions required Plaintiff to arbitrate her dispute, and that Plaintiff lacked standing to sue on behalf individuals that used websites Plaintiff herself did not visit. In a decision entitled Kukovec v. The Estée Lauder Companies, Inc., Case No. 22-CV-1988 (N.D. Ill.), the Court determined, however, that Plaintiff did not sufficiently plead that the cosmetics giant intentionally or recklessly violated consumers’ biometric privacy rights, and thereby dismissed those claims.  The ruling in Kukovec illustrates the ongoing legal risks for retailers in using “try-on” tech to enhance customer service.

Case Background

Too Faced Cosmetics, a cosmetics brand owned by Defendant Estée Lauder, operates a website featuring a try-on function to allows shoppers to virtually test its products.  When a shopper clicks a “Try It On” button, a pop-up box appears containing a disclaimer informing the shopper that their “image will be used to provide you with the virtual try-on experience” and a link to a privacy policy.  Id. at 4.  If the shopper selects the “Live Camera” option, the user’s computer camera is activated and the product is overlaid on part or all of the user’s face.  Id.

Plaintiff, an Illinois resident, alleged that Defendant’s try-on tool violated Section 15(b) of the BIPA by capturing users’ facial geometry without informing them how that data is collected, used, or retained.  Id. at 6.  Plaintiff also alleged that Defendant lacked a publicly-available written policy establishing how long such data is retained and when it is destroyed, in violation of Section 15(a) of the BIPA.  Id.  Plaintiff filed a putative class action lawsuit against Defendant, seeking to represent a class of individuals that used the virtual try-on tool not just on the Too Faced website, but also four other websites for Defendant’s other brands.  Id.  Defendant removed the case to federal court based on diversity jurisdiction and the Class Action Fairness Act, then moved to dismiss the complaint.

The Court’s Ruling On Defendant’s Motion To Dismiss

Defendant sought to dismiss Plaintiffs’ claims on four grounds, three of which the Court fully rejected.

First, Defendant argued that the Court lacked personal jurisdiction over it since its “Try On” tool was “geography neutral,” did not target Illinois consumers, and the mere accessibility of the tool to Illinois consumers lacked the substantial connection to Defendant’s sale of cosmetics and employees in Illinois.  Id. at 8.   The Court rejected this “overly narrow” interpretation of personal jurisdiction. It held that “[t]he try-on tool is part of [Defendant’s] cosmetics marketing and sales strategy,” since those that use the tool are also presented with buttons to add the products to their cart or send as a gift.  Id. at 9.

Second, Defendant argued that venue was improper because Plaintiff’s claims were subject to arbitration pursuant to a provision in its website’s terms and conditions.  Id. at 11.  Central to the issue of whether Plaintiff had constructive knowledge of the arbitration agreement was whether the terms and conditions were presented in “clickwrap” form, where a customer has to affirmatively check a box to assent (as courts generally uphold such assent), or “browsewrap” form, where a customer’s continued use of a website is taken as passive assent (and which require more detailed analysis).  Defendant’s website contained both clickwrap and browsewrap forms, but the Plaintiff only visited pages with browsewrap forms.  Id. at 12.  Users of the virtual try-on tool received a pop-up notification that had Too Faced’s privacy policy, not its terms and conditions, though the privacy policy contained a link to the terms and conditions.  Id.  On other pages, the terms and conditions were presented at the bottom of webpages “in the middle of fifteen links to other pages on the site and six links to social media platforms. . .”  Id.  The Court held such a website design insufficient to provide constructive notice, since a customer “could easily try the tool without once confronting the terms-and-conditions link.”  Id. at 14.  Further, the Court rejected Defendant’s argument that the Plaintiff had constructive notice because she recently filed two other BIPA-related lawsuits against TikTok and L’Oréal, noting that a website user “is not automatically on notice that any website she visits likely has terms and conditions just because she’s visited other websites that have them.”  Id. at 15.  Accordingly, the Court held that Plaintiff lacked constructive knowledge and that the arbitration clause could not be enforced against her.

Third, Defendant also sought to dismiss the complaint on the basis that it provided only “conclusory legal statements” and lacked sufficient facts establishing that Defendant captured users’ facial geometry, collected biometric data, or acted negligently, recklessly, or intentionally under the BIPA.  Id. at 16.  The Court disagreed. It found that the complaint “alleged enough to infer” that Defendant captured Plaintiff’s biometric information and “no intermediary separated the defendant from the collection of plaintiff’s facial geometry.”  Id. at 17.  However, since recklessness and intentionality require a specific state of mind that Plaintiff did not allege, the Court dismissed Plaintiff’s claims for reckless or intentional conduct, but allowed Plaintiff an opportunity to amend her complaint.  Id. at 18.

Finally, Defendant contended that since Plaintiff did not use the websites of its four other brands that utilize the virtual try-on tool, she lacked standing to sue on their behalf.  The Court noted that because no class had been certified, yet Defendant’s argument was premature. The Court reasoned that plaintiff “alleges an injury from a technology deployed across multiple websites” and that standing exists because Plaintiff’s injury “can be redressed by a decision in her favor.”  Id. at 20.

Implications For Companies Using Biometric Equipment

By allowing consumers to “try-on” products in a virtual environment, retailers increasingly rely on biometric data to provide hyper-personalized services and recreate the real-world shopping experience for the virtual world.  But as the popularity of try-on technology grows, so too does the legal risk from biometric data privacy lawsuits.  Since 2019, numerous retailers have been sued for violating the BIPA and other state biometric privacy laws for their use of try-on tech and other digital tools to personalize consumer recommendations.  The Kukovec decision highlights how new technologies expose companies to costly litigation, even when they take steps to notify consumers or mandate arbitration.  Companies should consider how they notify customers regarding try-on technology, ensure that their privacy policies stay current with evolving legislation and competing definitions of “biometric data,” and implement proper safeguards and consent processes.

$228 Million Judgment Entered In First Ever BIPA Class Action Trial Before A Chicago Jury

By: Gerald L. Maatman, Jr., Jennifer A. Riley, and Alex W. Karasik

Duane Morris Synopsis:  In Rogers v. BNSF Railway Co., Case No. 19-CV-03083 (N.D. Ill.), the first federal court jury trial in a case brought under the novel Illinois Biometric Information Privacy Act (“BIPA”), the plaintiffs secured a verdict in favor of the class of 45,000 workers against Defendant BNSF. After a week-long trial in the U.S. District Court for the Northern District of Illinois in Chicago, the jury found that BNSF recklessly or intentionally violated the law 45,600 times, based on the defense expert’s estimated number of drivers who had their fingerprints collected.  The Court thereafter entered a judgment against BNSF for $228 million.

This landmark verdict showcases the potentially devastating impact of the BIPA statute on unwary businesses across the state of Illinois that collect, use, or store biometric information.

Case Background

Plaintiff, a truck driver, filed a class action lawsuit alleging that BNSF unlawfully required drivers entering the Company’s facilities to provide their biometric information through a fingerprint scanner.  He claimed that BNSF collected the drivers’ fingerprints without first obtaining informed written consent or providing a written policy that complied with the BIPA and therefore violated sections 15(a) and (b) of the BIPA.  BNSF argued that it did not operate the biometric equipment and instead sought to shift blame to a third-party vendor who operated the biometric equipment that collected drivers’ fingerprints.

The case proceeded before a jury in federal court in Chicago. The proceeding was closely watched, as it represented the very first time any class action had gone to a full trial with claims under the BIPA

The trial lasted five days. However, the jurors deliberated for just over an hour.  The jurors were asked to: (1) indicate on the verdict form whether they sided with Plaintiff, and (2) if so, indicate how many times BNSF violated the BIPA negligently or how many times the company violated the statute recklessly or intentionally.

The BIPA provides for damages of $1,000 for every negligent violation, and up to $5,000 in liquidated damages for every willful or reckless violation. At the conclusion of the trial, the jury found that BNSF recklessly or intentionally violated the law 45,600 times.  Accordingly, the Court entered a judgment against BNSF in the amount of $5,000 per violation, for a total amount of $228 million.

Implications For Employers

This verdict undoubtedly will embolden the plaintiffs’ class action bar and equally serve as an eye opener for businesses in Illinois.  In the short term, companies can expect an uptick in the number of BIPA class actions filed by the plaintiffs’ bar. While it is almost certain that the verdict will be challenged in post-trial motions and in an appeal, companies can expect that plaintiffs’ lawyers will increase their settlement demands in other BIPA class actions.

The BIPA vastly increases the importance of adopting a strategic compliance plan for businesses that operate in Illinois.  It is more important than ever for companies to implement proper mechanisms and consent forms to comply with the BIPA.

Biometric Privacy, Plasma & Preemption: Illinois Federal Court Issues Another Pro-Plaintiff Ruling

By Gerald L. Maatman, Jr.Jennifer A. Riley, and Alex W. Karasik

Duane Morris Takeaways: In Vaughan v. Biomat USA, Inc. et al, Case No. 20-CV-4241, 2022 U.S. Dist. LEXIS 168497 (N.D. Ill. Sept. 19, 2022), Judge Marvin Aspen of the U.S. District Court for the Northern District of Illinois issued the latest plaintiff-friendly decision under the Illinois Biometric Information Privacy Act (“BIPA”), holding that federal regulations relating to plasma collection do not preempt the BIPA. For employers looking to craft novel defenses in response to the recent onslaught of biometric privacy class action litigation, this ruling represents another impediment to a potential defense strategy. Continue reading “Biometric Privacy, Plasma & Preemption: Illinois Federal Court Issues Another Pro-Plaintiff Ruling”

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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