Days later, on November 22, 2024, a different judge on the same court, in Schwartz v. Viking SupplyNet, held that Public Act 103-0769 did not apply retroactively. Though the Gregg decision made it appear that the retroactivity debate had been settled, the Schwartz decision reopened the door. It remains to be seen what the prevailing approach will be, which leaves BIPA defendants in a state of uncertainty.
In depth
Since its inception, BIPA has wreaked havoc on violators, resulting in excessive damages awards and settlements against those companies stuck on the receiving end of BIPA lawsuits. In 2021, a federal judge approved a USD 650 million settlement against an American multinational social media company for alleged BIPA violations. And in 2022, an American multinational technology company agreed to a USD 100 million settlement arising out of a BIPA class action brought on behalf of Illinois residents. Then, BIPA reached its boiling point in 2023 when White Castle faced an alleged USD 17 billion violation — threatening the company's existence. But BIPA's reign of terror is now at a crossroads where courts must determine the retroactive application of Public Act 103-0769. And whatever direction the law turns is sure to have sweeping consequences for BIPA litigants.
Gregg v. Central Transport LLC
In Gregg v. Central Transport LLC, John Gregg ("Gregg") sued Central Transport LLC ("Central Transport") under BIPA, alleging that Central Transport impermissibly used "fingerprint or other scanners" to track Gregg's work. Central Transport moved to dismiss the case, and the motion was granted, but not before the court grappled with an issue of first impression.
Prior to Gregg, the Illinois Supreme Court confronted a novel BIPA issue in Cothron v. White Castle System, Inc.: "[D]o BIPA claims accrue each time there is a biometric scan and each time that scan is transmitted to a third party, or do those claims only accrue upon the first scan and transmission?" Ultimately, the Cothron court held that based on the then-existing statutory language a separate claim accrued each time. Recognizing the potential for excessive damages awards and a likely ambiguity in the statute's text, the Illinois Supreme Court "respectfully suggest[ed] that the legislature review" BIPA.
In response to Cothron, on August 2, 2024, Public Act 103-0769 was signed into law, amending the damages provision of BIPA and making it so BIPA plaintiffs could only recover once for a single BIPA violation. But, for plaintiffs like Gregg, the issue became whether past, repeated violations could still be remedied by multiple recoveries, or whether Public Act 103-0769 applied retroactively to limit Gregg's recovery on claims for conduct that occurred before its enactment.
The Gregg court held that Public Act 103-0769 applied retroactively from the date of BIPA's original enactment. Thus, Gregg could not recover for multiple instances of the same BIPA violation.
"In Illinois," the court explained, "there is a presumption that statutory amendments are 'intended to change existing law.'" But the Gregg court also wrote that the presumption does not apply where the circumstances indicate "the legislature intended merely to interpret or clarify the original act." Because the Illinois Supreme Court expressly suggested the legislature make its intent clear, and since limiting damages was consistent with BIPA's original intent, the court held that Public Act 103-0769 was "merely a clarification rather than a substantive change in the law." Accordingly, the Gregg court treated BIPA "as if the amendment ha[d] been in place all along," thus prohibiting Gregg from pursuing damages for the same, repeated BIPA violation.
The court rejected Gregg's argument that the General Assembly passed Public Act 103-0769 to prospectively change Cothron's construction of BIPA. In Cothron, the court merely held that BIPA claims accrue "with each scan or transmission of biometric identifiers or information," not "that plaintiffs are entitled to liquidated damages for every one of those violations." Thus, the Illinois legislature only clarified that plaintiffs could recover once for the same violation of BIPA.
Schwartz v. Viking SupplyNet
The court in Schwartz v. Viking SupplyNet saw the consequences of Public Act 103-0769's amendment differently. In Schwartz, Jeffrey Schwartz ("Schwartz"), an employee of Viking SupplyNet ("Viking"), sued Viking alleging it violated BIPA by scanning his fingerprints as part of the company's time clock system. Viking cited the Gregg decision as evidence that Public Act 103-0769 was a mere clarification of BIPA, attempting to avoid the presumption that amendments change "the law as it previously existed." But the court was unpersuaded, holding instead that the amendment changed (rather than clarified) BIPA.
According to the Schwartz court, "[n]othing in the text of the amendment indicates that it is merely clarifying" BIPA. Although "the legislature can expressly indicate its intent to clarify in the statutory text," Viking pointed to no authoritative source to support the legislature's intent to clarify BIPA. Though the Schwartz court acknowledged that the existence of an ambiguity prior to a legislative amendment may indicate that an amendment is meant as a clarification, it also made clear that "Cothron at several points notes that 'the [2008] statutory language clearly supports' its per-scan interpretation." Thus, the court determined that the prior version of the statute analyzed in Cothron was not ambiguous; its text merely supported a different interpretation. Finally, the court recognized that, as the Gregg court noted, Public Act 103-0769 was arguably consistent with BIPA's original intent, but unlike in Gregg, it held that the amendment was a form of "legislature course-correcting" — in response to BIPA's unintended consequences — which was meant to produce a more reasonable interpretation of BIPA.
Because the Schwartz court held that Public Act 103-0769 was a change to BIPA, the court next turned to the retroactivity analysis set out by the United States Supreme Court in Landgraf v. USI Film Products, which determines the temporal reach of an amended statute by asking whether the change was procedural or substantive.
Substantive changes to the law do not apply retroactively, while procedural changes do. The court had no trouble concluding Public Act 103-0769 was a substantive change to the law, stating: "For Schwartz, the amendment changes the number of statutory violations — and thus injuries that he has suffered — from more than a thousand to just one." As such, because the amendment defines the rights of individuals by clarifying the scope of what could be a statutory violation, the court concluded that the change was substantive. Accordingly, the court held that the law did not apply retroactively to protect Viking from potentially excessive fines for repeated instances of the same BIPA violation.
Takeaways
Despite the Illinois legislature's amendment of BIPA to limit a putative plaintiff's damages award, courts are in disagreement about whether said amendment applies to pending litigation and to BIPA violations that predated the statutory change. As such, the scope of a defendant's potential financial exposure could differ vastly depending on the court overseeing the litigation, as well as the arguments presented by the defendant's counsel.
Under Gregg's interpretation of Public Act 103-0769, BIPA plaintiffs are now limited to recovering damages a single time for the same, repeated BIPA violation. Thus, for defendants litigating before courts who see the issue like the Gregg court, a plaintiff's ability to recover for each violation is limited to one event of each type (e.g., fingerprint or voiceprint). This approach is a powerful blow to the plaintiffs' bar and would create less of a financial incentive to litigate BIPA claims.
The Schwartz decision, on the other hand, supports the status quo of events and permits the exorbitant damages awards or settlements to persist. Until this clear conflict is settled by the Seventh Circuit, defendants who violated BIPA or were named as defendants in lawsuits prior to Public Act 103-0769's enactment remain susceptible to excessive damages.
