A federal judge has ruled Subaru can’t insist on arbitration for a class action lawsuit from a woman who claims the company’s DriverFocus system violates a state biometrics privacy law in the way the system scans the faces of drivers.
About a year ago, attorneys Daniel O. Herrera and Nickolas J. Hagman, of the firm of Cafferty Clobes Meriwether & Sprengel, of Chicago, filed suit in Cook County Circuit Court in Chicago against Subaru on behalf of named plaintiff Renee Giron, identified as a resident of Chicago. Subaru removed the complaint to federal court.
The complaint focuses on the distracted driving crash prevention system in certain Subaru vehicles — the 2019-2022 Forester, 2020-2022 Outback and 2020-2022 Legacy — which allegedly violates the Illinois Biometric Privacy Information Act by scanning drivers’ faces and eyes, and collecting and transmitting that information without first securing written permission from the drivers or without supplying written notices concerning why the data is being collected and how it will be used, stored, shared and ultimately destroyed.
Daniel Herrera
| Cafferty Clobes Meriwether & Sprengel
According to the lawsuit, DriverFocus uses a near-infrared camera to monitor the driver’s face and eyes to ensure the driver is paying attention to the road. The system will then “alert the driver with either a visual warning on the vehicle’s display system or audible warnings, or both,” should it determine the driver is distracted or drowsy. The system can recognize the faces of up to five registered drivers, according to the complaint, allowing it to adjust various settings in the car to automatically suit the driver’s preset preferences.
In an order filed Nov. 21, U.S. District Judge Jorge Alonso denied Subaru’s motion to effectively end Giron's class action by forcing the case into arbitration.
Noting Giron took out a to purchase her 2020 Outback, Subaru argued its financing agreement contains an arbitration provision giving either party the right to choose that venue for a dispute — including even the question of whether a dispute is ripe for arbitration.
The company is trying to avoid a potentially hefty payout, likely worth at least millions of dollars. Under the Illinois BIPA law, plaintiffs can demand companies pay as much as $5,000 per violation. While the question of how to define a "violation" remains open, attorneys have said the law could be interpeted to define an individual violation as each time a person's biometric data is scanned. Multipled across potentially thousands of drivers in Illinois, Subaru's potential risk could quickly mount.
For instance, other businesses targeted by class actions under the BIPA law have routinely paid millions to settle the cases.
Facebook and Google each agreed to pay $650 million and $100 million, respectively, to settle claims against them. And a jury recently ordered freight railroad operator BNSF to pay $228 million in a class action over fingerprint scans the company required of truck drivers entering its rail yards in Illinois. Plaintiffs' attorneys in that case, however, say they believe damages should have actually been far higher, as much as $800 million.
In the case against Subaru, Judge Alonso stopped Subaru's attempt to sidestep the class action.
The judge noted Giron signed a financing agreement with Grand Subaru, a dealership in suburban Bensenville, but sued Subaru of America, the carmaker. And while he found clear evidence regarding the question of arbitrability with the dealer, “there is no evidence (let alone clear and unmistakable evidence) that plaintiff has agreed to refer to an arbitrator the question of arbitrability between plaintiff and Subaru of America.”
The automaker, Alonso continued, is a third party to the contract between Giron and the dealer, and thus the question of its ability to enforce the arbitration clause in the finance agreement is suitable for his court. Although that question had been open earlier in proceedings, Alonso pointed to a U.S. Seventh Circuit Court of Appeals opinion from earlier this year, CCC Intelligent Solutions v. Tractable, in which it held a third party couldn’t demand arbitration and that making such a decision was the purview of a court, not an arbitrator.
“Subaru of America, Inc., has put forth no evidence, let alone clear and convincing evidence, that plaintiff made any representation to induce Subaru of America, Inc., to rely, to its detriment, on the arbitration clause,” Alonso wrote. “Nor has Subaru of America, Inc., put forth any evidence of detrimental reliance.”
The automaker argued its choice to provide buyers like Giron an added security maintenance plan, through a retail contract worksheet, makes those buyers reliant on the company despite executing the finance agreement with the dealer directly. But Alonso said the document in question “says nothing about arbitrating claims” and offers “no evidence that suggests the document is a representation” on the part of buyers.
Alonso said the document specifically states “retailer use only,” meaning it can’t impose any legal duty on the buyer to accept an agreement from the manufacturer. He set a status hearing for Dec. 8.
Subaru has been represented in the case by attorneys Livia M. Kiser, Thomas E. Ahlering and Jennifer R. Virostko, of the firm of King & Spalding, of Chicago.
Jonathan Bilyk contributed to this report.