Multi-Million Dollar Settlement Reached in BIPA Litigation That Went Up to Seventh Circuit
CPW has previously blogged about the Bryant litigation which concerned a putative class action brought under the Illinois Biometric Information Privacy Act (“BIPA”). In 2020, the Seventh Circuit issued a landmark standing decision concerning whether the Plaintiff in Bryant could proceed with litigating her claims in federal court. Recently, in that case Compass Group USA Inc. and a retail technology company agreed to pay $6.8 million as part of a settlement to resolve claims alleging they collected fingerprint data from vending machine users without proper notice and consent as required under BIPA. Read on to learn more.
First, some background. The Plaintiff in Bryant filed suit under BIPA alleging that Compass Group collected her fingerprint scan when she signed up to use a smart vending machine in 2018. Plaintiff worked for a call center in Illinois. The call center had a cafeteria for employees, in which it had installed Smart Market vending machines owned and operated by Compass Group USA, Inc. The machines did not accept cash. Rather, all users had to create accounts using their fingerprints. Plaintiff alleged that upon her hire, she was instructed during her orientation (along with her other coworkers) to scan their fingerprints into the Smart Market system and establish a payment link to create user accounts. After establishment of an account and provision of their fingerprints, employees could then purchase items via fingerprint.
Plaintiff alleged that Compass Group violated Section 15(a) of BIPA by possessing her biometric information and failing to destroy that information once the purpose for collecting that information was complete. However, her Section 15(a) was dismissed for failure to state a claim in November 2020. Recall that to state a claim under Section 15(a), a plaintiff must allege that the defendant has failed to comply with its established retention and destruction guidelines. Significantly, courts have held that “making such an allegation requires making an antecedent allegation—namely, that the defendant has established retention and destruction guidelines.” To put it otherwise, the mere alleged retention of biometric information is not adequate to support a BIPA Section 15(a) claim.
In regards to these requirements, the district court found Plaintiff’s Section 15(a) claim lacking. First, the pleadings were silent as to whether Compass Group had any retention and destruction guidelines in place. And second, in any event Plaintiff’s claim was unripe. BIPA Section 15(a) expressly provides that that the guidelines an entity establishes must provide for: (1) the destruction of biometric identifiers within three years of the individual’s last interaction with the entity or (2) when the initial purpose for collecting or obtaining such identifiers has been satisfied, whichever is earlier. In this instance, the Complaint’s allegations failed to meet either standard.
However, Plaintiff’s 15(b) claim survived (concerning her allegations that Defendants collected biometric fingerprint identifiers and information from her and other Illinois residents without following BIPA’s informed written consent procedures). The litigation continued and discovery commenced, with the parties thereafter engaging in mediation.
Under the terms of the settlement reached by the parties, class members (defined as “[a]ll individuals who scanned their finger(s) in one or more of Defendants’ vending systems in Illinois between August 23, 2014 and preliminary approval without first executing a written consent”) would be eligible upon submission of a valid claim to receive a pro rata payment from a $6.8 million settlement fund. Notably, unlike prior BIPA settlements where the payouts to class members ranged from $80-$380, here it was predicted that individual class members who submitted a claim would receive more than $500 (based upon a 12.5 percent take rate).
Because BIPA provides for liquidated statutory damages, it is one of the most frequently litigated data privacy statues in the country. Although there remains ambiguity regarding the contours of the law, this trend is expected to persistent into 2022. For more on this, stay tuned. CPW will be there to keep you in the loop.