By: Rosa M. Tumialán, Alyssa Vranak and Henry Rodriguez
On August 2, 2024, Governor J.B. Pritzker signed Illinois Senate Bill 2979 (“SB 2979”) into law. This amendment modifies the Biometric Information Privacy Act (“BIPA”), 740 ILCS 14, to limit the amount a plaintiff can recover when a private entity collects, stores and/or discloses his or her biometric information. The amendment also expands the definition of “written release” to include an electronic signature. The significant impact of SB 2979 is the limit to “at most, one recovery” of $1,000 or $5,000 in statutory damages under section 20 for negligent or reckless violations, respectively. This amendment is in response to a recent Illinois Supreme Court opinion construing BIPA as allowing a new cause of action for each and every “swipe.” See Cothron v. White Castle System, Inc., 2023 IL 128004.
The reach and scope of BIPA has been the subject of many appellate and Illinois Supreme Court rulings subjecting private entities to seemingly boundless liability and ruinous damages. The first decision—Rosenbach—established a gossamer threshold to establish standing which all but opened the floodgates. The lack of a statute of limitations prompted another round of litigation which at one time resulted in two limitations periods depending on the nature of the violation. But the Supreme Court issued Tims, applying the more generous five-year statute of limitations ensuring the largest possible putative classes. Cothron rounds out the trifecta—the Illinois Supreme Court holding that a private entity violates BIPA with each swipe or scan. This construction led the court to conclude that an individual could recover separate damages for each individual violation of BIPA, most commonly including each time an individual employee clocks in and out of work. For private entities that take their employees’ biometric information daily, the Cothron decision had the potential to result in astronomical judgments against private entities. To its credit, the Cothron court observed this impact but also noted that it could not rewrite the statute and “respectfully suggest[ed] that the legislature review these policy concerns and make clear its intent regarding the assessment of damages under the Act.”
Having amended BIPA to express a legislative intent to allow for a single recovery if a plaintiff proves a violation, the next question becomes whether the legislature intended the amendment to apply retroactively. This question (which will also need to be adjudicated as the amendment is silent on retroactive application) should result in more favorable news for BIPA defendants. The retroactive dispute turns on whether an amendment is procedural or substantive. Procedural amendments are applied retroactively, while substantive ones are not. See Allegis Realty Investors v. Novak, 223 Ill. 2d 318, 331 (2006). SB 2979 should be considered procedural in nature because it pertains to the calculation of damages.
The BIPA Amendment qualifies as a small win for private entities and is a welcome change that for the first time reigns in what up to now has been a statute construed in the most not business-friendly manner possible. The amendment is but a first step—there is still no prohibition to class actions but capping damages to the first swipe or scan should allow defendants an additional quiver in their bow. Private entities should continue to ensure their methods of biometric collection, storage, and disclosure are up to date and in compliance with the standards and procedures set forth under BIPA to avoid liability.
About the Authors
Rosa is Co-Chair of Tressler’s Insurance Services Practice Group and Chair of Tressler’s Appellate team and focuses her practice on insurance coverage and bad faith litigation. She is an accomplished defense attorney with nearly twenty years of insurance coverage experience. Rosa’s insurer-related services include coverage opinion analysis and representing insurers in complex coverage disputes relating to personal and commercial lines, third party claims, surplus lines as well as claims handling practices and extracontractual liability. Rosa also assists with drafting coverage documents for insurance pools and counsels clients in the administration of same. Her practice also includes serving as national coordinating coverage counsel for insurance clients who rely on her to develop and implement strategies nationwide in response to pattern litigation. Rosa is an accomplished class action defense lawyer and appellate practitioner, having appeared and argued in both state and federal courts nationwide.
Alyssa Vranak is an associate attorney in the Insurance Services Practice Group. She focuses her practice on insurance coverage analysis and litigation. Alyssa provides comprehensive coverage analysis and defense in matters involving a wide range of policies, including commercial general liability coverage and professional liability coverage.
Henry Rodriguez
Henry is a law clerk at Tressler and a recent graduate from the University of Illinois Chicago School of Law. He has worked as a law clerk for Tressler for two years, gaining exposure to a wide range of areas of law. Henry recently took the July 2024 Illinois Bar Exam and looks forward to continuing his legal career as an associate in Tressler’s Insurance Services and Litigation Practice Groups upon passage. Henry is originally from Evanston, Illinois, and earned an undergraduate degree from the University of Illinois Urbana-Champaign in 2020.