A vending machine kiosk company that won a partial victory from a federal appeals panel in a court fight over class action lawsuits with big money on the line under an Illinois biometrics privacy law is asking appellate judges to take another look at their decision, saying the split decision creates big legal problems.
On May 19, attorneys for North Carolina-based Compass Group USA petitioned the U.S. Seventh Circuit Court of Appeals in Chicago, asking for the court’s full complement of judges to review a three-judge panel’s decision earlier this month.
Earlier in May, the appellate panel had ruled a class action against Compass Group could be heard in federal court – but on only half of the claims.
Molly McGinley
| K&L Gates
Compass Group is a foodservice company that operates vending machine kiosks that utilize fingerprint scanners to process transactions. These kiosks are typically located in places like employee break rooms or lounges in office buildings and other workplaces.
Compass was sued in Cook County Circuit Court by lawyers from the firm of Werman Salas, of Chicago, on behalf of named plaintiff Christine Bryant. In the lawsuit, Bryant and her lawyers claimed Compass Group had violated the Illinois Biometrics Information Act by failing to abide by technical notice and consent provisions within the Illinois BIPA law. Specifically, the plaintiffs asserted Compass was required to provide vending machine customers with written notices concerning how the company would collect, store, share and ultimately destroy their fingerprint scans, and secure written consent from customers, before scanning their fingerprint.
The lawsuit carried with it large financial stakes for Compass, as the BIPA law allows plaintiffs to collect damages of $1,000-$5,000 per violation. Individual violations could be counted as each time a customer scanned their fingerprint to purchase an item from a Compass vending machine.
This could place millions of dollars on the line.
The lawsuit was very similar to hundreds of other class actions filed under the BIPA law by a number of plaintiffs’ law firms against employers and other companies of all sizes and in various industries in Illinois in the past few years.
However, in the months that have followed its filing, the lawsuit has taken a less typical procedural course. Compass sought to remove the lawsuit to federal court, and escape Cook County’s courtrooms, renowned to favor plaintiffs in civil actions.
In federal court, however, the parties reversed their traditional roles. Ordinarily, defendants would seek to dismiss the lawsuit by arguing the plaintiff suffered no harm. Plaintiffs would argue the opposite.
In this case, however, the opposite occurred. Should the federal courts determine the plaintiffs suffered no harm, the case would return to Cook County court, where state law holds a different standard under BIPA.
Under an Illinois Supreme Court ruling from 2019, plaintiffs are free to bring big money class actions under BIPA, so long as they can show a defendant violated the law’s technical notice and consent provisions. They need not show any actual harm was committed.
A federal district judge initially sided with the defendants, finding Bryant suffered no harm, so the lawsuit should be sent back to Cook County.
Compass appealed, however, and the Seventh Circuit panel sided with them – but only in part.
The appeals court drew a distinction between two different notice provisions in the law. The appellate judges said plaintiffs can suffer real “concrete” injuries from violations of BIPA’s Section 15(b), which lays out notice and consent requirements owed to each individual.
But the judges said there was no actual harm under federal legal standards committed by companies alleged to have violated Section 15(a), which instructs companies to develop and publicly post a written policy concerning how the data will be collected, retained and destroyed.
So, the federal appeals panel said Section 15(b) claims can remain in federal court, because they pertain to legal obligations owed to individuals, while Section 15(a) claims cannot, because they pertain to obligations owed to the public.
In their latest petition, Compass said this creates major problems, including a split with another federal appeals court. In the Ninth Circuit Court of Appeals in California, judges there, in a lawsuit brought against Facebook under BIPA, held claims under both BIPA sections can belong in federal court under federal legal standards.
“… There is a plain split between the circuits, and a Section 15(a) claim brought in the Ninth Circuit may proceed in federal court while one brought in this circuit may not,” Compass wrote.
Compass said the Ninth Circuit got the law right.
“While the statute requires that a policy be publicly available, that requirement does not turn the protected right into a public interest,” Compass wrote in its petition.
“… As the Illinois Supreme Court and the Ninth Circuit have explained, the mandates of Section 15, in its entirety, are intended to protect individuals’ interests in their private information by requiring that those individuals be provided certain information and assurances regarding the protection of their data prior to consenting to their collection and use.
“…The informational injury at issue here is directly related to the privacy interests protect by BIPA, and the mere fact that, once created, a retention and destruction policy must be available to the public does not lessen the concrete injury each may suffer if such a policy is not created and adhered to.”
Attorneys for Compass asked the full Seventh Circuit to rehear the case on that specific question, and overrule the appeals panel.
Compass is represented by attorneys Molly K. McGinley and Joseph C. Wylie II, of K&L Gates LLP, of Chicago.