In a 4-3 split, the Illinois Supreme Court ruled earlier this month that claims under Sections 15(b) and 15(d) of the Illinois Biometric Information Privacy Act (“BIPA”) accrue each time a private entity scans a person’s biometric identifier and/or submits such scan to a third party—rather than only upon first collection. Cothron v. White Castle System, Inc., 2023 IL 128004 (Feb. 17, 2023). This decision—which dramatically expands the scope of potential liability for BIPA defendants—comes just weeks after the Illinois Supreme Court held a five-year statute of limitations applies to all BIPA causes of action in Tims v. Blackhorse Carriers, Inc., 2023 IL 127801 (Feb. 2, 2023).
The impact of Cothron on claim accrual, coupled with Tims’ resolution of the statute of limitations, will have an immense and immediate impact on BIPA class-action lawsuits—many of which had been stayed pending these decisions.
For many businesses that implement biometric time clocks, which scan biometric identifiers to track employee time/attendance, this means each time an employee scans in-and-out of work, a new BIPA violation accrues. Together with the five-year statute of limitations period, BIPA defendants may now be facing hundreds—if not thousands—of independent BIPA violations for a single complainant.
Taken in context with the significant statutory damages under BIPA—i.e., $1,000 per negligent violation of the statute, $5,000 per intentional or reckless violation—it is easy to see how the scope of potential damages available to a BIPA class has exploded. Many in the defense bar have expressed concern with the potential for cost-prohibitive and business-ending damages awards. But the Illinois Supreme Court largely left this issue up to Illinois lawmakers, noting “policy-based concerns about potentially excessive damages awards … are best addressed by the legislature.” The Court did, however, acknowledge the General Assembly chose to make BIPA statutory damages awards discretionary—rather than mandatory—and agreed a trial court could fashion a BIPA award that compensated class members without destroying a defendant’s business.
For businesses implementing biometric technology, compliance remains critical to avoid class action litigation and the associated financial exposure. Equally important is instituting other procedural protections against BIPA class claims, such as binding arbitration provisions and class action waivers, which at the very least will diminish the impact of such claims.