A federal appeals panel has determined investment giant Blackstone can’t be sued under an Illinois genetic information law over allegations of improperly accessing data without consent solely because it acquired Ancestry.com.
Blackstone reportedly spent $4.7 billion to purchase the popular genealogy website in December 2020. The following July, plaintiffs Carolyn Bridges and Raymond Cunningham filed a class action complaint, alleging Blackstone violated the Genetic Information Privacy Act. Blackstone removed the complaint to federal court the Southern District of Illinois, where U.S. District Judge David Dugan dismissed the complaint for failure to state a claim.
The U.S. Seventh Circuit Court of Appeals issued an opinion on the matter May 1. Judge David Hamilton wrote the opinion; Judges Michael Scudder and Doris Pryor concurred.
Gregory L. Shevlin
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According to the panel, Illinois lawmakers enacted GIPA in 1998 to regulate genetic testing data in commercial and medical settings. It said the operative clause for purposes of the class action is a provision that no person or company “may disclose or be compelled to disclose the identity of any person upon whom a genetic test is performed or the results of a genetic test in a manner that permits identification of the subject of the test.”
The plaintiffs based their allegations on the saliva sample genetic sequencing kits purchased from Ancestry before the Blackstone acquisition. They said Ancestry paired their tests with personal information, like email and home addresses, and alleged Blackstone’s control acquisition purchase compelled Ancestry to disclose that protected information.
Hamilton said Judge Dugan’s dismissal stemmed from a determination the complaint lacked adequate allegations of compulsory disclosure and, even if he had decided there was such a disclosure, the complaint didn’t overcome the company’s position the data in question was anonymized.
Noting a “dearth of Illinois precedent examining GIPA,” Hamilton explained the panel didn’t need to consider Blackstone’s legal obligation as a recipient of protected information because, as with Judge Dugan, “we cannot plausibly infer that a run-of-the-mill corporate acquisition, without more alleged about that transaction, results in a compulsory disclosure within the meaning” of the GIPA clause the plaintiffs invoked.
“The fact that the acquisition took the form of an all-stock purchase further cuts against the plaintiffs’ theory of liability,” Hamilton wrote. “All we can say with certainty about Blackstone’s all-stock acquisition of Ancestry is that a change in ownership occurred — nothing more.”
The panel further said the complaint — which the plaintiffs declined to amend before appealing the dismissal — “was bare bones” in that it essentially wanted a court to infer the $4.7 billion purchase price “forced or pressured” the data disclosure they say violated GIPA protections.
“Nor does it matter that Blackstone may have pursued the deal, at least in part, to obtain Ancestry’s genetic information,” Hamilton continued. “True, the plaintiffs’ complaint identified a Bloomberg news article reporting that Blackstone, as part of the firm’s broader investment strategy, planned to sell data from unnamed portfolio companies to unaffiliated third parties. And the plaintiffs’ complaint also fairly pointed to Ancestry’s old privacy policy to support the allegation that the company would share data in the event of an acquisition. But that does not salvage the pleading’s deficiency.”
The panel focused on the word “compelled” and said the complaint didn’t allege how Blackstone forced Ancestry to disclose anything. It also said the plaintiffs’ reliance on the phrase “requests for” certain protected information from an earlier section of GIPA was merely an “introductory provision on legislative intent” that doesn’t “graft new language into” the section under which they sued.
Plaintiffs were represented in the case by attorneys Gregory L. Shevlin, of Cook Bartholomew Shevlin Cook & Jones, of Belleville; Jonathan M. Jagher, of Freed Kanner London & Millen, of Conshohocken, Pennsylvania; and Katrina Carroll, of Lynch Carpenter, of Chicago.
Blackrock has been represented by attorneys Martin L. Roth and Alyssa C. Kalisky, of Kirkland & Ellis, of Chicago.