Seventh Circuit Applies BIPA Amendment Retroactively

Last week in Clay v. Union Pacific Railroad Co., the Seventh Circuit Court of Appeals ruled that an amendment to Illinois' Biometric Information Privacy Act that limited the damages available to some plaintiffs was procedural in nature and therefore applied retroactively to cases pending when the change went into effect in August 2024.

BIPA regulates how private entities can collect, store and disseminate biometric information by creating disclosure, consent and retention standards.  If an entity collects or disseminates a person's biometric information without first complying with these standards the person can collect statutory damages for “each violation.”  The statute, however, did not define “violation.”

In Cothron v. White Castle, the Illinois Supreme Court decided that each time an entity collected biometric information from a person constituted a separate violation.  Therefore, workers who scanned their thumbs on time clocks multiple times each workday could accrue hundreds or thousands of separate violations, each of which may result in its own damage award.

To address the potentially astronomical damage awards that could flow from the Cothron decision, the Illinois Legislature amended the statute to provide that if an entity used the same method to collect biometric information from the same person multiple times, it would result in a single violation and at most one claim for statutory damages.  The amendment took effect August 2, 2024, but it was silent as to whether it would apply retroactively.

Three District Court decisions concluded the amendment was substantive and therefore refused to apply it to those cases that were pending when the amendment took effect but also certified the retroactivity question for interlocutory appeal.  The Seventh Circuit concluded Illinois' law on when to apply a statute retroactively was clear - procedural changes apply retroactively while substantive amendments do not - and therefore addressed the issue rather than certifying it to the Illinois Supreme Court (as it did in Cothron).

The Seventh Circuit concluded that the text and structure of the amendment - which focused on the remedy available and did not alter the obligations between the parties and was contained in the section of BIPA that provides for liquidated damages and not the sections creating rights and obligations - reflected a procedural change:  

In tandem, these points highlight that the amendment did not alter when “a cause of action … has arisen,” nor did it change “the rights, duties, and obligations of persons to one another”—the hallmarks of substantive changes. Perry, 106 N.E.3d at 1034. It simply cabined the recovery available against defendants who violate the Act

The Court distinguished the plaintiffs' reading of Cothron and dismissed policy arguments, including alleged concerns under the Illinois Constitution, to conclude “the amendment to Section 20 of BIPA constitutes a remedial change, Illinois courts would have us apply it to cases pending when it was enacted.”

The decision will prompt additional questions - such as whether BIPA class actions can meet the $5 million jurisdictional limit for removal under the Class Action Fairness Act - but for now resolves an important issue and should allow parties to better assess the value of pending cases. Although not as authoritative as a decision by the Illinois Supreme Court might be, Clay should prove persuasive as it relied on the application of well-established Illinois law.

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