Articles Posted in Class-Action

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 ›

An AI company harvested publicly available photographs from social media sites across the internet and then used those photographs to derive a biometric facial scan of each individual in the photograph. The company sold this database to law enforcement agencies to use in identifying persons of interest or unknown individuals. A woman sued in a class action, arguing that the harvesting of biometric data violated Illinois’ Biometric Information Privacy Act. The company removed the case to federal court, and the federal court ruled that the plaintiffs’ claims lacked standing under Article III. The appellate court agreed with the district court and affirmed, ordering that the case be remanded to state court.

Clearview AI is in the business of facial recognition tools. Users may download an application that gives them access to Clearview’s database. The database is built from a proprietary algorithm that scrapes pictures from social media sites such as Facebook, Twitter, Instagram, LinkedIn, and Venmo. The materials that it uses are all publicly available. Clearview’s software harvests from each scraped photograph the biometric facial scan and associated metadata, which it stores in its database. The database currently contains billions of entries.

Many of Clearview’s clients are law enforcement agencies. The clients primarily use the database to find out more about a person in a photograph, such as to identify an unknown person or confirm the identity of a person of interest. Users upload photographs to Clearview’s app, and Clearview creates a digital facial scan of the person in the photograph and then compares the new facial scan to those in its database. If the program finds a match, it returns a geotagged photograph to the user and informs the user of the source social-media site for the photograph.

In the wake of a New York Times article profiling Clearview, Melissa Thornley filed suit in Illinois state court under the Illinois Biometric Information Privacy Act (BIPA). BIPA provides robust protections for the biometric information of Illinois residents. Thornley’s complaint, filed on behalf of herself and a class, asserted violations of three subsections of BIPA. Clearview removed the case to federal court. Shortly after removal, Thornley voluntarily dismissed the action. Thornley then returned to the Circuit Court of Cook County in May 2020 with a new, significantly narrowed, action against Clearview. The new action alleged only a single violation of BIPA and defined a more modest class. Continue reading ›

Many people have become wary of online forms asking for personal information since many of them prove to be opportunities for dishonest people and institutions to use and share that information for their own purposes. But there are institutions most of us assume to be trustworthy, and for most people, that would include the College Board, the same institution that develops and administers the SAT and ACT exams. According to a new lawsuit, the College Board allegedly collected and sold students’ personal information, including their names, addresses, gender, ethnicity, grades, and citizenship status.

According to a new lawsuit, which has been filed on behalf of the parent of a student of Chicago Public Schools, the College Board allegedly collected this information using a Student Search Survey. The College Board denies having done anything wrong, saying that the survey was optional and free for students to fill out. Legislators say the College Board did ask for students’ consent to distribute their information to colleges, universities, and scholarship providers, but did not mention that the information would be sold to those third parties – that the College Board was profiting off students’ personal information.

The lawsuit alleges that the College Board collected between 42¢ and 47¢ for each student name they sold to other organizations.

The lawsuit further alleges that, after obtaining students’ personal information, the College Board offered the students’ identifying information (including their names and addresses) for sale to third parties in order to promote Student Search Service, the survey they used to collect students’ information. Continue reading ›

MG_6325_1-300x200The FTC sued a student loan debt relief company that promised consumers that it would reduce their monthly student loan payments, or arrange for their student debts to be forgiven in whole or part by their student loan servicers. Instead, the company kept most of the money sent to them by the consumers and failed to negotiate with the servicers or remit the payments in a timely fashion. The district court granted summary judgment to the FTC and issued a permanent injunction against the defendants, as well as a monetary judgment for more than $27 million in restitution.

The United States District Court for the Central District of California granted summary judgment to the Federal Trade Commission in a suit filed against Elegant Solutions, Inc. The FTC filed a complaint against Elegant Solutions for a permanent injunction and other equitable relief pursuant to § 13(b) and 19 of the Federal Trade Commission Act and 57(b) of the Telemarketing and Consumer Fraud and Abuse Prevention Act.

The FTC’s complaint charged that the defendants participated in acts or practices that violated § 5(a) of the FTC Act by representing in advertising that consumers who purchased the defendants’ debt relief services would be enrolled in a repayment plan that would reduce their monthly payments on their student loans to a lower, specific amount, or have their student loan balances forgiven in whole or part; that most or all of the consumers’ monthly payments to the defendants would be applied toward consumers’ student loans; and that the defendants would assume responsibility for the servicing of consumers’ student loans. The district court found that, in numerous instances in which the defendants made such representations, they were false or not substantiated. The panel determined that these representations constituted a deceptive act or practice in violation of § 5(a) of the FTC Act. Continue reading ›

Hudson’s Bay (HBC), the Canadian retail company that owns Saks, among other high-end stores, has been sued by lenders who claim the reorganization of the company that happened earlier this year was conducted in an attempt to set up a secret corporate shell game that has robbed the credit that exists as insurance on the $850 million loan the plaintiffs have invested in the company.

The lawsuit centers around the fact that, as the owner of stores like Saks and Lord & Taylor, HBC was responsible for guaranteeing payment on all loans for the stores, including making sure the rent was paid if the stores themselves were in financial distress or unable to make rent for any other reason.

Earlier this year, HBC formed a new Bermuda corporation, which is owned by shareholders with a controlling interest in HBC, as well as executives at the highest levels of HBC’s corporate hierarchy. According to the plaintiff, Situs Holdings, this transfer of assets is not only improper but also violates the loan agreement and puts at risk the company’s ability to repay the loan.

HBC denies all the allegations, claiming the restructuring amounted to little more than a change in name and some paper shuffling. It also alleges that Situs never had any claim on the assets of HBC that were reassigned in the course of the restructuring process. The Canadian retail company insists that Situs’s reaction to the restructuring is far beyond what the restructuring actually accomplishes and that the plaintiff’s claims that HBC allegedly conducted this restructuring in secret, deliberately keeping it concealed from Situs, are likewise false. Continue reading ›

Last year we witnessed the filing of a first of its kind putative class-action lawsuit claiming that gift cards that did not contain Braille violated the Americans with Disabilities Act (ADA) along with similar state and local laws. Within weeks, more than 240 nearly identical complaints had been filed against a multitude of retailers and restaurant chains in New York. Recently, a federal judge issued the first opinions in these gift card cases dismissing the plaintiffs’ claims. While the court granted the plaintiffs the ability to amend their complaints, it is unclear how they will be able to successfully retool the complaints given that the opinions soundly rejected the plaintiffs’ theories of liability.

The court’s first opinion came in a case captioned Dominguez v. Banana Republic LLC. In the following days, the same judge released similar opinions dismissing six additional Braille gift card lawsuits before him on the same grounds. The factual circumstances in the seven cases are similar. In each case, the plaintiffs alleged that they called the defendant and asked whether the defendant’s gift cards contained the information printed on the cards in Braille. After the defendant responded that the gift cards did not contain Braille, the plaintiffs filed suit alleging violations of the ADA and various state and local laws. Each case was filed as a putative class action on behalf of the named plaintiff and a nationwide class of similarly situated blind individuals. Continue reading ›

ATTENTION BUSINESS OWNERS: we are investigating possible wrongful denials of business interruption insurance claims due to COVID-19. If you would like us to review your policy, feel free to send it along.

With stories of COVID-19, the strain on global healthcare, and social distancing dominating headlines, the pandemic’s impact on the owners of small and medium sized businesses is sometimes lost in the shuffle. At the end of the day, business owners are people too. They deal with the same fears and concerns about Coronavirus as everyone else, plus the added anxiety that comes with being responsible for the livelihoods of employees and their families. In a time when many businesses are facing forced closures, a growing number of business owners have filed claims for business interruption coverage under their commercial insurance policies only to have those claims denied.

Business owners who have had their claims for business interruption coverage denied are not without options though. It is important in such instances to seek the assistance of an experienced insurance coverage and bad faith denial attorney who will help you review your policy, consider your options, and, importantly, determine if the insurance company wrongfully denied coverage. An attorney can negotiate on your behalf with the insurance company, and if necessary, file a lawsuit seeking a declaration of coverage and a judgment requiring payment under the policy. Continue reading ›

CDB is everywhere these days. Products containing CBD can be purchased online, at health-food stores, and even at gas stations. The market for CBD containing or infused products is burgeoning and represents a lucrative opportunity for entrepreneurs as the market is expected to expand to a more than $16 billion industry by 2025. Despite its popularity, there is little in the way of regulation or guidance regarding the advertising and selling of CBD products.

In recent months, there have been a series of class-action lawsuits filed against the manufacturers and sellers of CBD products alleging false and misleading advertising and labeling of these products in violation of consumer protection statutes. In one of these newly filed class-action lawsuits, a putative class of consumers from Massachusetts filed a class-action lawsuit against Global Widget LLC, d/b/a Hemp Bombs (“Hemp Bombs”). The complaint alleges misleading labeling and statements concerning numerous Hemp Bombs products, including gummies, lollipops, capsules, syrup, vape and pet products.

According to the complaint, Cannabidiol (CBD) is a naturally occurring chemical compound known as a phytocannabinoid. CBD is typically derived from hemp plants for its purported medicinal qualities. CBD is used to treat anxiety, insomnia, depression, diabetes, PTSD, and chronic pain. CBD can be taken into the body in multiple ways, including by inhalation of smoke or vapor, as an aerosol spray into the cheek, and by mouth. Food and beverage items can be infused with CBD as an alternative means of ingesting the substance. Continue reading ›

The difference between an individual and class-action lawsuit can be significant for a business. What few business owners realize, however, is that every case begins as an individual case and only later does a court decide whether or not to certify the case as a class action. The question that class action defense attorneys have long considered is whether it possible to pay the named plaintiff’s individual claim and resolve the entire case before the issue of class certification is even considered. This tactic, known as a “pick off,” has been attempted for decades. Although a number of states have rejected the effectiveness of this tactic, Illinois has long been an outlier. Recently, the Illinois Supreme Court revisited its previous pick-off jurisprudence to clarify that a defendant can successfully pick off a named plaintiff in Illinois by “tendering” full relief before a motion for class certification has been filed.

According to the Illinois Supreme Court, tendering full relief entails paying the full amount demanded into the court’s registry, agreeing to pay the plaintiff’s reasonable attorney’s fees and costs, and effectively admitting liability. If there is injunctive or other non-monetary relief sought, the defendant may have to agree to that relief unconditionally as well. Continue reading ›

Contact Information