Photo-sharing site Shutterfly can use a pre-existing arbitration clause in its user agreement to defeat a class action brought under Illinois’ biometrics privacy law, despite unilaterally amending the agreement and emailing potential plaintiff class members, a Chicago federal judge has ruled.
On May 15, U.S. District Judge Mary M. Rowland ruled in favor of Shutterfly, sending to arbitration the legal claims brought by named plaintiff Vernita Miracle-Pond and her legal team.
She has been represented in the action by attorneys from the firms of Carson Lynch LLP, of Chicago; Ahdoot & Wolfson, of Los Angeles; and Carey Rodriguez Milian Gonya LLP, of Miami.
Miracle-Pond and her lawyers had filed suit against Shutterfly in June 2019.
The lawsuit accused Shutterfly of violating the Illinois Biometric Information Privacy Act by creating templates of users’ facial geometry and then using that information to track and tag their photos across its platform.
The lawsuit asserts Shutterfly did so without first securing written permission from Illinois users, or without providing a series of notices allegedly required by the Illinois BIPA law, concerning how the face scans would be stored, used, shared and ultimately destroyed.
According to court documents, Miracle-Pond had been a Shutterfly user since August 2014, and had uploaded photos on multiple occasions since.
Shutterfly asserted Miracle-Pond remained a Shutterfly user to the present day, and so remains bound to language included in the user agreement since 2015 which requires legal disputes between Shutterfly and its users to be heard through arbitration, rather than through lawsuits.
Miracle-Pond’s lawyers argued she and other potential class members should not be bound by that arbitration provision. She argued she and other users believed they were only agreeing “to use Shutterfly services in accordance with the Terms of Use.” She argued “she did not assent to be bound by the Terms of Use,” Judge Rowland said.
She further argued Shutterfly’s agreement terms, allowing it to unilaterally alter the terms of the agreement, without first notifying users, renders the user agreement “illusory” and “unenforceable.”
Rowland sided with Shutterfly on that question, and said Miracle-Pond's BIPA claims belong in arbitration.
“Ms. Miracle-Pond entered into a service contract that explicitly gave Shutterfly’s (sic) the right to unilaterally modify the agreement at any time and without notice, other than posting the modified terms on their website,” the judge said. “… Ms. Miracle-Pond indicated her acceptance to the modified Terms of Use by continuing to use Shutterfly products.”
Judge Rowland's decision comes amid a rising tide of BIPA-related class actions in courts in Chicago and elsewhere in Illinois. Hundreds of such class actions have been filed and remain pending in courts throughout the state, largely centered on technical violations of the state privacy law's notice and consent language.
Most of the lawsuits now target employers over their use of fingerprint-scanning time clocks or other biometric scanning devices, installed to verify workers' identities when beginning and ending work shifts, or accessing secure areas. However, many other lawsuits also target social media platforms, including Facebook.
The lawsuits can also carry steep financial stakes, as the BIPA law allows for damages of $1,000-$5,000 per violation. A violation can be defined under the law as each time a system scans a user's biometric identifiers, such as a fingerprint or facial geometry.
Facebook, for instance, recently settled a BIPA class action over its photo tagging systems for $500 million.
With potentially many millions of dollars on the line, defendants in different cases have probed different defenses to either get the cases removed from the courts or defeated altogether.
In this instance, Judge Rowland said Shutterfly's arbitration provision, which pre-dated the class action lawsuit by four years, should suffice to keep the case from heading toward a trial.
Judge Rowland also rejected the plaintiffs’ attempts to sidestep the arbitration agreement, by drawing attention to emails Shutterfly sent to users last year, after the class action was filed.
Those emails informed users of certain changes to the user agreement, and explicitly told them continuing to use the platform after Oct. 1, 2019, signified their continued agreement to the terms.
Those terms continued to include the arbitration clause.
Miracle-Pond’s lawyers argued the emails were an improper communication sent by Shutterfly to potential plaintiffs in their class action.
Judge Rowland called the plaintiffs’ “characterization of the email … largely incorrect.”
“The September 2019 email did not impose a new arbitration provision on putative class members,” Rowland wrote. “Rather, Shutterfly users and accountholders were already bound by the 2015 arbitration agreement.”
In sending Miracle-Pond’s claims to arbitration, Rowland also put a hold on Shutterfly’s motion to dismiss her lawsuit, until arbitrators can weigh in.
Shutterly has been represented in the action by attorneys with the firm of Mayer Brown, of Chicago.