A suburban grocer, among the latest employers among a growing wave targeted with a class action lawsuit under an Illinois privacy law, may be forced to fund a greater share of its own defense after an insurer asked a judge to declare it has no obligation to help defend the case.
On Jan. 8, Westfield Insurance Company filed suit in Cook County Circuit Court, asserting the policy held by supermarket chain Caputo’s Fresh Markets doesn’t mean the insurer has to cover the company’s legal bills.
The lawsuit comes about four months after a former employee sued the supermarket group, which operates seven stores in Chicago’s suburbs under the name Angelo Caputo’s Fresh Markets, accusing the company of violating the Illinois Biometric Information Privacy Act (BIPA).
According to that complaint, filed Sept. 14, plaintiff Evan Krause served as maintenance director at the Caputo’s stores from 2010 to Sept. 4, 2018. In the lawsuit, he alleged the company violated the BIPA law by tracking its employees’ work hours using a punch clock that required employees to scan their fingerprints. The lawsuit asserts the company did not provide employees with the notice required under the law nor did the company obtain authorization from the employees before scanning and storing their fingerprints into its timekeeping system.
The lawsuit also accuses Caputo’s of improperly disclosing the fingerprint data to ADP, the vendor that supplies and services its employee punch clock system.
In that action, Krause is represented by attorneys from the firm of Stephan Zouras LLP, of Chicago.
The lawsuit is virtually identical to a swarm of similar class actions filed by the Stephan Zouras firm and a number of other class action plaintiffs’ law firms against employers of all sizes across Illinois, accusing them of similar technical violations of the BIPA law.
Passed in 2008, lawmakers indicated they wished to help Illinois residents protect their so-called unique biometric identifiers, including fingerprints, retinal scans or facial geometry, from misuse or distribution without their consent.
However, the law in recent years has given rise to class actions against dozens of companies, both from customers, and more recently, from employees, as well.
Initially, legal actions targeted primarily technology and social media companies, including Facebook and Google, over such issues as facial geometry scans and tagging in online photos. Some of the actions against Facebook are still pending after being moved to California federal court.
The class action lawsuits appeared to have ebbed somewhat in early 2018 after an Illinois appeals court had indicated such class actions based on technical violations of the BIPA law may not hold up, if the plaintiffs can’t demonstrate they were actually harmed by scanning their biometric information. In that case, the Illinois Second District Appellate Court had ruled a mother couldn’t continue with her lawsuit against theme park operator Six Flags, which had scanned her teen son’s fingerprint to verify his season pass.
And that ruling has been followed by a federal judge’s dismissal of a BIPA lawsuit against Google. In that case, the judge agreed Google can’t be sued by plaintiffs claiming Google violated the law by scanning their facial geometry and creating a facial template to identify them when photos of them are uploaded by others to Google Photos.
However, late last year, the Illinois Supreme Court indicated it could undo the state appellate court’s ruling in the Six Flags case, as justices appeared to lean in the direction of holding a technical violation of the BIPA law could be enough of an injury to allow the lawsuits to continue.
After the state Supreme Court agreed to hear that case, BIPA-related filings again surged in Cook County, in particular, with the lawsuit against Caputo’s among them.
However, in that case, the company ultimately could pay a steeper price, after Westfield asked to be excused from covering Caputo’s against the BIPA lawsuit.
While Westfield issued a commercial general liability policy to Caputo’s, effective through June 2019, the insurer said its liability terms do not include damages and lega bills resulting from such BIPA-related lawsuits, because it is an “employment-related practice,” and doesn’t arise from a “personal and advertising injury.” Further, the insurer asserts the policy doesn’t apply to lawsuits over events that occurred before June 2017.
Westfield is represented in the action by attorneys with the firm of Lindsay Pickett & Postel LLC, of Chicago.
Caputo’s is represented in the BIPA class action by attorneys with the firm of Laner Muchin Ltd., of Chicago.