Articles Posted in Class-Action

Amazon is facing a class-action lawsuit filed in the Madison County Circuit Court alleging that Amazon’s Alexa violates the Illinois Biometric Information Privacy Act (BIPA). In setting out its case against Amazon, the Complaint quotes an interview with former Amazon senior editor James Marcus in which he said that “It was made clear from the beginning that data collection was also one of Amazon’s businesses. All customer behavior that flowed through the site was recorded and tracked. And that itself was a valuable commodity.”

The Complaint details the near ubiquity of Amazon’s voice-based virtual assistant Alexa by alleging that Alexa is embedded in numerous Amazon devices such as Echo speakers, Fire tablets, and others. The Complaint goes on to allege that Alexa can additionally be integrated into other devices such as phones, TVs, thermostats, appliances, lights, and many more consumer products.

The Complaint alleges that after Alexa responds to a request, Amazon collects and subsequently stores “voiceprints” of the user, and “transcriptions” of the voiceprints. These voiceprints and transcriptions constitute biometric identifiers or biometric information regulated by BIPA, according to the Complaint. The suit goes on to allege that Amazon does not delete the voiceprint or transcription after Alexa has responded. Instead, the Complaint alleges, Amazon uses these recordings to collect biometric information which it uses to improve the speech and voice recognition capabilities of Alexa.

Although Alexa is supposed to activate only after hearing its “wake word,” the Complaint alleges that Alexa-enabled devices frequently capture conversations by accident without being triggered. The Complaint cites a study conducted by Ruhr-Universität Bochum and the Bochum Max Planck Institute for Cyber Security and Privacy that allegedly discovered more than 1,000 sequences of words that incorrectly trigger smart speakers, such as Alexa. According to the Complaint, the study found that Alexa was inadvertently activated by the words “unacceptable” and “election.” Continue reading ›

In one of its final decisions of the term, the United States Supreme Court issued one of the most significant class-action decisions in recent years. The decision tightened the requirements for showing standing in class action lawsuits and has the potential to significantly affect class action litigation. Building on its 2016 decision in Spokeo, Inc. v. Robins, the Supreme Court held that, to recover damages in a class action, every class member must satisfy the standing requirement of Article III, at least when the requested relief involves recovery of money damages.

The plaintiff in the case, Sergio Ramirez, obtained a credit report from TransUnion in the course of purchasing a car, as countless consumers do each year. Ramirez’s credit report stated that his name was a possible match for a name on the Office of Foreign Assets Control (OFAC) watch list, a list of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries that typically contains the names of known terrorists, drug traffickers, and other individuals prohibited from conducting business in the U.S. for national security reasons.

Because of this alert on his credit report, the car dealership refused to sell Ramirez a vehicle. When he contacted TransUnion and requested a copy of his credit file, TransUnion first sent him his credit file and the statutorily required summary of rights. This first set of documents omitted any mention of the OFAC alert. TransUnion then sent Ramirez a second mailing, which included the OFAC alert but did not include the required summary of rights.

Based on these events, Ramirez filed suit alleging three violations of the federal Fair Credit Reporting Act (FCRA). First, he alleged that TransUnion did not implement and follow “reasonable procedures” to ensure the accuracy of his credit file. Second, he claimed that TransUnion violated the FCRA by failing to provide him with all the FCRA-required information in his credit file in connection with the first mailing he received which did not mention the OFAC alert. Finally, he alleged that TransUnion failed to provide him with the required summary of his rights “with each written disclosure” because the second mailing he received from TransUnion did not include a summary of his rights. Ramirez filed the case as a class action seeking to represent a class of similarly situated individuals. Continue reading ›

The Fair Debt Collection Practices Act (FDCPA) gives consumers crucial protections against predatory debt collection practices, such as calling late at night, using harassing language, pursuing individuals for debts they don’t owe, and using misleading communications in debt collection attempts. The FDCPA governs the practices of third-party debt collectors, those who buy a delinquent debt from original creditors, like medical providers or credit card companies.

A common practice of these third-party debt collectors is to outsource parts of its debt-collection operations to various vendors. In an apparent issue of first impression, the Eleventh Circuit considered whether the FDCPA applies to communications between a third-party debt collector and its vendors. The FDCPA prohibits debt-related communications about a consumer with third parties without the consumer’s consent or a court order. Thus, the issue for the Eleventh Circuit was whether communications between a debt collector and its vendors constituted debt-related communications about a consumer in violation of the FDCPA. In a decision that has the potential to upend the debt collection industry, the Eleventh Circuit ruled that such communications were in fact governed by the FDCPA. A likely result of this decision will be a wave of FDCPA class action lawsuits, particularly in the states within the Eleventh Circuit (Alabama, Florida and Georgia). Continue reading ›

An Illinois Appellate Court recently considered a putative class action lawsuit alleging that a senior housing community operator violated several consumer protection statutes in connection with its contracts with residents. The First District affirmed the trial court’s dismissal of the claims finding that the trial court properly concluded that the contracts did not violate the statutes and granted summary judgment to senior housing community operator.

The defendant is an Illinois not for profit corporation that operates an independent living senior housing community for persons 55 years and older in Glenview, Illinois. The plaintiff filed the lawsuit as the executor of the estate of Marjorie Hamilton and sought to represent a class of other similarly situated individuals. Hamilton entered into a “Residency and Services Agreement” with the defendant for an apartment at the senior living facility Chestnut Square. The Agreement provided for an initial deposit that was to be paid by Hamilton to reserve a residence in Chestnut Square which would bear interest at the passbook savings rate established by Bank One.

In February 2013, Hamilton notified the defendant of her intent to terminate her residency. The defendant did not refund her entrance fee until July 2014. When it did, Hamilton did not receive any interest with her entrance fee refund. Even before the refund, the plaintiff filed a class action complaint against the defendant asserting claims of unconscionability; breach of contract; and violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, the Security Deposit Interest Act and the Security Deposit Return Act. The trial court subsequently dismissed the unconscionability claim with prejudice, dismissed the Consumer Fraud Act claim without prejudice, and denied the defendant’s motion to dismiss the Deposit Return Act and Interest Act claims.

The trial court ultimately granted class certification for the Deposit Return Act and Interest Act claims but denied class certification for the Consumer Fraud Act and breach of contract claims. After class notice had been provided to the class members, the defendant filed for summary judgment as to all claims and plaintiff filed a cross-motion for partial summary judgment on liability under the Interest Act and Deposit Return Act claims. After hearing the arguments of both parties, the trial court granted summary judgment in favor of the defendant on both the class claims and the plaintiff’s individual claims. The plaintiff subsequently appealed these rulings to the First District Appellate Court.

As the Court noted, the crux of the plaintiff’s case depended on whether the Court found the Agreement to be a lease or a services agreement. A secondary issue in the case was whether the entrance fee could constitute a security deposit. Turning to the first question, the Court identified the requisite elements for an agreement to be considered a lease: (1) it must delineate the extent and bounds of the property; (2) it must identify a rental price and time and manner of payment; and (3) must set forth the term of the lease. After reviewing the terms of the Agreement, the Court determined that it could not be considered a lease under Illinois law. Continue reading ›

Midwest grocery giant, Jewel-Osco, is seeking dismissal of a potentially massive putative class-action lawsuit filed against it alleging violations of the Illinois Biometric Information Privacy Act (BIPA). The grocery chain is accused of running afoul of the Illinois BIPA in connection with the technology used by the company to scan fingerprints of certain employees. The company has shot back against the complaint arguing that the suit should be thrown out because it is “conclusory and speculative” and is based entirely on “bald information and belief,” without hard facts.

In 2018, a former Jewel-Osco pharmacist, Gregg Bruhn, filed a putative class action lawsuit against New Albertsons Inc., the parent company of Jewel-Osco, alleging various violations of the Illinois BIPA. Albertsons operates nearly 200 stores located throughout Illinois, Indiana and Iowa, but mostly in the Chicago area. The plaintiff was employed by Jewel-Osco from 1989 to 2018.

In his complaint, Bruhn alleges that he and other employees had to scan their fingerprints in order to gain access to the pharmacy’s computer system for more than a decade beginning in 2006 until at least 2018. Bruhn further alleges that his former employer violated the Illinois BIPA in connection with these fingerprint scans by passing his prints to out-of-state third parties and by failing to give him and the other employees notice concerning how their prints were to be used, stored, shared and ultimately destroyed. He also alleged that Jewel-Osco failed to secure the consent of the employees before acquiring their prints. Under the Illinois BIPA, an employer can be found liable and made to pay damages for each time an employee scanned their fingerprints when verifying their identity. He is seeking to represent both himself and a class of similarly situated employees and has requested as much as $5,000 in statutory damages per violation, per employee. Continue reading ›

While the government was quick to hand out Business Interruption Grants to businesses across the country struggling from the effects of the pandemic-induced shutdown, company’s applying for the grant did have to meet certain criteria. The companies needed to be able to prove they had been financially impacted by COVID-19, and that they would use the money from the grants for necessary business expenses, such as payroll. What was less widely discussed was the fact that recipients of grants also needed to abide by all city, state, and federal labor laws applicable to their business, something Tank Noodle allegedly failed to do.

The Vietnamese restaurant was asked to return the grant money it received after federal investigators found they were in violation of several labor laws, including allegedly withholding wages from their employees. Tank Noodle also received two loans from the Payment Protection Program totaling almost $400,000, although it is not yet clear whether they will be made to pay back that money in addition to the grant money they received.

Poor working conditions for very little pay is a systemic and long-standing problem throughout the restaurant industry, and it’s not limited to fast-food restaurants. High-end restaurants are equally likely to ignore labor laws, and white employees are just as often subject to very low pay as their minority coworkers (although white servers do tend to receive larger tips).

In the summer of 2020, amidst the nationwide social unrest and calls for racial justice, several Chicago restaurants were accused of abusing their staff, including allegations of racism. Some of those restaurants were forced to permanently shut down as a result of the accusations, but Tank Noodle managed to keep its kitchen open.

Tank Noodle, a Vietnamese restaurant located in the Uptown neighborhood of Chicago, hired a Vietnamese server in 2018, explaining the server could start right away, but that the only pay they would receive would be in tips. The server took the job because they needed the money, not realizing how low the pay would be or the lack of transparency at the restaurant when it came to tips. Continue reading ›

A truck manufacturer was agreed to a settlement after it was sued for selling trucks with defective engines. Two members of the litigation class had filed separate suits against the company in state court. After the settlement was finalized, the manufacturer sought to have those suits dismissed. The plaintiffs attempted to intervene in the court where the settlement was approved, seeking to opt-out of the terms of the settlement. The district court refused and the plaintiffs appealed. The appellate panel affirmed the decision of the district court. The panel found that the plaintiffs had not shown that their decision to refrain from timely objecting to the settlement was an excusable one. The panel determined that the plaintiffs were attempting to obtain the benefit of both the settlement and their separate litigation, as a way of receiving whichever of the judgments was larger. The panel found that the district court did not abuse its discretion in binding the plaintiffs to the terms of the settlement.

A class of owners accused Navistar of selling trucks with defective engines. The suit was settled for $135 million. In June 2019, the district court gave the settlement its preliminary approval. Before the approval could become final, the court had to notify class members of their right to opt out, and it needed to consider any substantive objections by class members who elected to be bound by the settlement. In August 2019 such a notice was sent to all class members. The court held a fairness hearing in November 2019 and rejected some objections to the settlement. In January 2020 the court entered a final judgment implementing the settlement. Continue reading ›

Fleas and ticks can carry Lyme disease, making them dangerous, and even potentially fatal, to us all, but especially to dogs who spend a lot of time outside and in whose fur fleas and ticks like to burrow. But when it comes to a certain flea and tick collar, could the protection against fleas and ticks be worse than the dangers posed by the bugs themselves?

Elanco Animal Health is an Indiana-based pharmaceutical company that makes medications and vaccines for animals, including Seresto flea and tick collars. After almost 1,700 incidents of pet deaths and about 900 humans harmed, all of which were reported as having been linked to the Seresto flea and tick collars, Elanco is now facing a class action lawsuit filed by consumers who allege their dogs were either harmed or killed by the collars, as well as a congressional investigation. Continue reading ›

Insurance company State Farm is breathing a little easier after a Cook County judge recently dismissed a putative class action lawsuit filed against the insurer by the owner of an Evanston restaurant over the insurer’s denial of loss of income claims. In the complaint, the restaurant alleged that it and other restaurants suffered hundreds of thousands of dollars in lost income, resulting from state-ordered closures in response to COVID-19. The restaurant alleges that it filed a business interruption claim with State Farm who denied coverage.

Following denial of the claim, the restaurant filed suit against the insurer. In response, State Farm asked the court to dismiss the claims against it. In arguing for dismissal, State Farm asserted two arguments. First, it argued that an “accidental direct physical loss” to the covered property, required for coverage, had not occurred. Second, it argued that coverage was excluded by the “Fungi, Virus or Bacteria” Exclusion to the plaintiff’s policy, which excluded from coverage losses due to “[v]irus, bacteria or other microorganism that induces or is capable of inducing physical distress, illness or disease.”

In arguing that the physical loss trigger to coverage had not been met, State Farm relied on the 2001 Illinois Supreme Court’s opinion in Travelers Insurance Co. v. Eljer Manufacturing Inc. that a “physical” loss must include alterations in “appearance, shape, color or in other material dimension.” As a result, State Farm contended, economic losses from COVID-19 are legally distinct from physical losses and not covered by the plaintiff’s policy. In other words, simply being deprived of physical access to a restaurant building is insufficient to trigger coverage, even if the closure was by order of the Governor. Continue reading ›

As we have previously written about here, here, and here, the Illinois Biometric Information Privacy Act (BIPA) has generated some high profile litigation in recent years. The Illinois Supreme Court’s last opportunity to consider one of the country’s most protective laws concerning biometric data came in 2019 in its decision in Rosenbach v. Six Flags Entertainment Corporation, which we wrote about here. Recently, the Illinois Supreme Court has granted permission to appeal another potentially impactful decision interpreting BIPA.

BIPA was enacted in 2008 to help regulate the collection, use, safeguarding, handling, storage, retention, and destruction of biometric identifiers and information. The BIPA defines “biometric identifier” as “a retina or iris scan, fingerprint, voiceprint, or scan of hand or face geometry.” It defines “biometric information” as “any information, regardless of how it is captured, converted, stored, or shared, based on an individual’s biometric identifier used to identify an individual.” The BIPA provides for fines of $1,000 to $5,000 for each violation.

On January 27, 2021, the Illinois Supreme Court granted leave to appeal the Illinois Court of Appeals for the First District’s recent decision in McDonald v. Symphony Bronzeville Park LLC, 2020 IL App (1st) 192398. The McDonald case considered the very specific, yet important, issue of whether the exclusivity provisions of the Illinois Workers’ Compensation Act preempted claims statutory damages under BIPA. In its decision, the First District ruled that the Illinois Workers’ Compensation Act, and specifically its exclusive remedy provisions do not bar claims for statutory damages under BIPA. Continue reading ›

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