A Chicago federal judge says the Illinois Institute of Technology may yet escape a biometrics privacy class action over its use of face-scanning online test proctoring. But first, the judge said, the school must prove it is legally considered a "financial institution."
In a July 15 decision, U.S. District Judge Andrea Wood declined, for now, to dismiss the class action lawsuit. But she said more information will perhaps be developed to let her determine whether IIT is exempt from Illinois' biometrics privacy law, on grounds it's administration of student loans makes it a "financial institution" under federal banking law.
Wood's ruling benefited plaintiff and IIT student Daniel Fee in his class action against IIT, a private research university with four campuses in the Chicago area.
Fee was a student at IIT in autumn 2020 when the school required him to use online test proctoring service Respondus Monitor to take an online exam. Respondus Monitor is a digital tool that verifies a student's identity through facial geometry scanned through a webcam.
Fee sued IIT in early 2021, alleging the school violated the Illinois Biometric Information Privacy Act (BIPA) by not securing his written consent to scan his face and not notifying him how his information would be collected, stored, shared and eventually destroyed.
Several other suits have been lodged since last year in Illinois against other schools and the makers of scanning technology, claiming privacy law was broken.
Illinois Institute of Technology filed arguments in June 2021 saying the case should be dismissed, because BIPA does not apply to "financial institutions" subject to the federal Gramm-Leach-Bliley Act of 1999. The 1999 Act requires financial institutions protect the privacy of consumers' financial data and explain to consumers the institution's information-sharing practices. The school contended it was a financial institution because it extends and administers student loans. As a consequence, the 1999 Act covers IIT, exempting it from BIPA, according to the school.
Judge Wood found IIT's motion to dismiss to be premature.
"The fact that IIT is a participant in federal student aid programs does not, by itself, establish that IIT is regularly extending or administering student loans. To reach that conclusion, the Court requires further factfinding concerning IIT’s lending activities," Wood noted.
As examples, Wood said she would need to know how many IIT students receive federal student aid, whether IIT makes loans to students, and the nature and extent of IIT’s involvement with loans. As a consequence, Wood said she cannot conclude at this point that IIT qualifies as a financial institution. Wood said the question could be "better addressed at a later stage in the proceedings."
In one of the similar BIPA lawsuits against colleges and universities over online test proctoring, Northwestern University in Evanston also claimed schools are financial institutions, which exempts them from BIPA actions. District Judge Joan Lefkow agreed, dismissing the suit against Northwestern in February 2022.
That ruling, however, did not end lawsuits against other schools, including IIT.
Fee has been represented by Raina Borrelli, of Turke & Strauss, of Madison, Wisconsin, and by Brian Kevin Murphy, of Murray Murphy Moul Basil, of Columbus, Ohio. These firms are also pressing similar university-biometric suits against other schools.
Illinois Institute of Technology has been defended by Andrew Bollinger, Elizabeth Anne Thompson, William T. Eveland and Christopher S. Naveja, of Saul Ewing Arnstein & Lehr, of Chicago.