Articles Posted in Class-Action

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Recently, the Illinois Appellate Court for the First District issued a significant decision on the question of which statute of limitations govern claims for violations of the Illinois Biometric Information Privacy Act (“BIPA”). In its opinion, the Court ruled that claims for unlawful profiting from or disclosure of biometric data, those brought under sections section 15(c) and (d) of the BIPA, are subject to a one year limitations period while claims involving violations of the notice, consent and retention requirements, those brought under sections 15(a), (b), and (e) of the BIPA, are subject to a limitations period of five years. This decision should bring much needed clarity to class-action plaintiffs and defendants alike.

The BIPA, one of the most robust privacy statutes in the country, imposes various obligations on anyone that collects, stores or uses biometric identifiers such as fingerprints, retina or iris scans, voiceprints, or face geometry from Illinois residents. Failure to comply with the BIPA’s requirements can be costly as violations of the statute entitle successful plaintiffs to statutory damages ranging from $1,000 to $5,000 for each violation (plus attorney fees). This can add up quickly as claims for violations of the BIPA are frequently brought as a class action as we have seen in recent years.

The underlying case was brought by two former drivers for Black Horse Carriers, a trucking and logistics company. The plaintiffs filed the case as a class action. In their lawsuit, the former drivers alleged that Black Horse failed to obtain consent to use drivers’ fingerprints or to institute a retention schedule. They also accused the company of unlawfully disseminating their biometric data by sharing fingerprints with a third-party vendor that processed timekeeping records for the company. Continue reading ›

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In a putative class-action lawsuit filed against Apple concerning alleged violations of the Illinois Biometric Information Privacy Act (BIPA), the parties disputed the scope of discovery to which the plaintiffs were entitled. The plaintiffs sought to compel Apple to produce certain identifying information for Illinois residents with Apple devices containing the Photos App. The plaintiffs also issued document subpoenas to major resellers of Apple products for the personal data of individual customers. The district court ultimately denied the request to compel and quashed the subpoenas, citing concerns about how personal information would be protected given the increase in cyber attacks and hacking incidents.

The suit centers on the Photo App contained on Apple devices that displays photos stored on the devices. According to the plaintiffs, the Photo App collects biometric identifiers and biometric information, including scans of facial geometry and related biometric information, of the individuals in the photos. Apple collects these biometric identifiers, the plaintiffs allege, without first notifying the individuals in writing and obtaining their informed consent. The plaintiffs further allege Apple possessed biometric identifiers and biometric information without creating and following a written, publicly available policy with retention schedules and destruction guidelines. According to the plaintiffs’ complaint, these actions violate the BIPA. Continue reading ›

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In a class-action filed against Champion Petfoods alleging that the pet food company misrepresented the quality of its dog food and ingredients, the Seventh Circuit recently affirmed a grant of summary judgment in favor of Champion. In doing so, the Court reiterated to future litigants that “summary judgment is the proverbial put up or shut up moment in a lawsuit.” The lesson of the case for class-action plaintiffs is that evidence concerning the merits of the plaintiff’s case is just as important as evidence concerning class certification.

According to the plaintiff in the case, Champion advertised on its packaging that its dog food was “biologically appropriate” and made with “fresh regional ingredients” prepared in its “award-winning kitchens.” These claims were false and misleading, according to the plaintiff, because: (1) Champion uses frozen ingredients, regrinds refreshed ingredients, and includes ingredients that are past their expiration date; (2) the ingredients are sourced from all over the world; and (3) there is a risk that the dog food contains BPAs and pentobarbital.

Champion moved for summary judgment while the plaintiff moved for class certification. The District Court granted Champion’s motion on all counts. On appeal, the Court found that the plaintiff failed to present evidence to support his claims. The Court reminded the plaintiff of its oft-repeated refrain that at summary judgment the plaintiff “may not rest upon mere allegations” but must “go beyond the pleadings and support his contentions with proper documentary evidence.”

The plaintiff in the case relied almost entirely on his own testimony to oppose summary judgment. The Court found that this was insufficient to stave off summary judgment. Because the case was a deceptive advertising claim that did not involve patently misleading claims, the Court explained that the plaintiff had the burden of producing evidence to support the contention that the average consumer would be misled by the advertising. The plaintiff’s own testimony could not do this. The Court found of particular note that the plaintiff did not provide either consumer survey evidence or expert testimony to support his claims. Continue reading ›

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It is not at all uncommon for a company to require individuals to agree to its Terms of Use when they sign up for an online service or when creating an account on a website or mobile app. It is also not uncommon for that service, website, or app to incorporate technology from multiple different providers. Such was the case in a case recently decided by the federal Seventh Circuit Court of Appeals. In its opinion, the Seventh Circuit rebuffed arguments by a technology company that it should be entitled to enforce certain arbitration provisions in a user agreement between OfferUp and its users.

Onfido owns and licenses the TruYou facial recognition software, which is marketed as software aimed at helping online resellers verify their identity. OfferUp, an online marketplace for buying and selling used items, uses the TruYou software in its mobile app to verify the identities of its users.

One of OfferUp’s users, Fredy Sosa, sued Onfido, alleging that its TruYou software violated the Illinois Biometric Information Privacy Act (BIPA). Sosa signed up to become a verified user on OfferUp’s mobile app. The identity verification process involved uploading photographs of his driver’s license and face. OfferUp’s verification process allegedly involved using Onfido’s TruYou software to extract and store biometric identifiers contained in the uploaded photos to verify that the face in the photograph matches the face on the driver’s license. Sosa subsequently filed a putative class action lawsuit against Onfido alleging that the company violated the BIPA by failing to provide him with a biometric data retention policy or to advising him whether and when it will permanently delete the biometric identifiers that it derived from his face. Sosa additionally alleged that Onfido violated the BIPA by failing to require him to sign a written release allowing it to “collect, use, or store his biometric identifiers derived from his face.”

After Onfido removed the case to an Illinois federal court, it sought to have the lawsuit dismissed and to compel arbitration of Sosa’s claims. The company relied on an arbitration provision in OfferUp’s Terms of Service which Sosa agreed to when signing up as a user of the OfferUp marketplace as the basis for seeking to compel arbitration of Sosa’s claims. The district court denied Onfido’s motion to stay Sosa’s complaint and compel individual arbitration, finding that Onfido cannot enforce the arbitration provision because it wasn’t a party to the agreement between OfferUp and its users. Continue reading ›

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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 ›

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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 ›

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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 ›

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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 ›

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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 ›

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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 ›

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