CHICAGO — A federal judge has refused to toss or transfer a class action against facial recognition tech firm Clearview AI, as the judge said the facts of the case disagree with Clearview's assertion that the lawsuit filed under Illinois' biometrics privacy law fails at face value.
U.S. District Judge Sharon Coleman’s opinion issued Aug. 12 is the latest development connected to the Jan. 22 lawsuit David Mutnick filed against Clearview and its founder Hoan Ton-That and executive Richard Schwartz, both New York residents. The suit alleges the company violated the Illinois Biometric Information Privacy Act by creating a database of more than 3 billion images scraped from public websites to be sold to police, banks and retail theft specialists.
The American Civil Liberties Union and other plaintiffs also filed a similar lawsuit in May in Cook County Circuit Court.
Clearview’s latest attempt at defeating the litigation was asking Coleman to either dismiss the complaints for a lack of personal jurisdiction or transfer them to the Southern District of New York, Clearview's home federal court district. Coleman said the complaints adequately established she and Chicago's federal courts can exercise specific jurisdiction over the company as well as the individual defendants.
“As Clearview’s principals, Schwartz and Ton-That have executed hundreds of agreements on behalf of Clearview with numerous Illinois law enforcement and other government agencies, as well as private entities in Illinois, to provide access to its facial recognition database,” Coleman wrote.
The judge specifically named the Chicago, Rockford and Naperville police departments as Clearview customers.
“Through these agreements, defendants have sold, disclosed, obtained, and profited from the biometric identifiers of Illinois citizens," Coleman wrote.
Coleman further said Clearview marketed user accounts to the Illinois Secretary of State and negotiated a contract with that office through phone, mail and email. Also, there was ample evidence of Illinois residents being part of the biometric yield.
“The images contained in the facial recognition databases sold to Illinois entities were uploaded and created using internet-based platforms and websites from companies in Illinois or companies who operate servers in Illinois,” Coleman wrote. “Simply put, defendants took biometric information from Illinois residents, created a surveillance database and then marketed and sold licenses to use this database to entities in Illinois. As a result, plaintiffs’ privacy rights were violated.”
Calling the defendants’ arguments “untenable for several reasons,” Coleman said the factual record conflicts with defendants’ testimony and the fact Clearview has physical offices only in New York isn’t enough for it to avoid being sued in Illinois.
“Defendants’ other arguments are equally without merit,” Coleman continued. “For instance, that Clearview also obtained biometric information from millions of other Americans and marketed and sold its database in other states does not save the day.”
Though Coleman surmised the defendants were trying to use the fiduciary shield doctrine, she said the attempt was “perfunctory, undeveloped and thus waived” while also counter to district courts’ consistent refusal to permit that shield for corporate executives.
In considering a venue transfer, Coleman said there is no clear convenience advantage to either side in moving the case to New York, “especially now during the COVID-19 pandemic where depositions and court hearings are done remotely via video and audio conferencing.” She also said when those issues are balanced, courts tend to favor plaintiffs.
Further, Illinois courts have more familiarity with the state’s BIPA laws “and Illinois courts, including its federal courts, have a strong interest in protecting the privacy rights of Illinois residents.”
Coleman said Clearview pointed to similar litigation in New York, but noted a judge there blocked Mutnick from intervening in that case, as that judge concluded Mutnick's complaint raised different legal issues and partially disconnected class definitions.
Mutnick is represented by attorneys with the Chicago firm of Loevy & Loevy, which also seeks to be certified as counsel for a proposed nationwide class and Illinois subclass.
Clearview is represented by the firm of Jenner & Block, with offices in New York and Chicago.