In early February, the Illinois Supreme Court made the first of two crucial rulings defining the scope of Illinois' Biometric Information Privacy Act ("BIPA"), holding that the law is governed by a five-year statute of limitations. The second issue, to be decided in Cothron v. White Castle Sys., Inc., No. 128004 (Ill.), is claim accrual.
The key issue in Cothron is whether a BIPA claim accrues only once, upon the first non-compliant collection or disclosure of biometric information, or instead accrues repeatedly, with each subsequent collection or disclosure constituting an additional compensable violation under the statute. BIPA claims typically entail activities that occur repeatedly – for example, the use of a thumbprint scanner daily to clock in and out for work. Thus, a determination on claim accrual has the potential to significantly expand litigation risk and available damages. The BIPA statute does not define when a claim accrues, so a ruling by the Illinois Supreme Court will finally determine the correct interpretation.
In December 2021, two developments in the BIPA litigation landscape pushed toward a resolution of the unanswered claim accrual question. First, an Illinois appellate court ruled in Watson v. Legacy Healthcare Fin. Servs., LLC, 2021 IL App (1st) 210279, that BIPA claims accrue each and every time that a defendant collects information in violation of the statute, as opposed to only at the first instance of collection. A few days later, the Seventh Circuit Court of Appeals issued its decision addressing BIPA claim accrual in Cothron v. White Castle Sys., Inc., 20 F.4th 1156 (7th Cir. 2021). In lieu of opining on the BIPA claim accrual question, the Seventh Circuit, at the plaintiff's request, certified the issue to be decided by the Illinois Supreme Court, given that "[w]hether a claim accrues only once or repeatedly is an important and recurring question of Illinois law implicating state accrual principles as applied to this novel state statute. It requires authoritative guidance only the state's highest court can provide." Id. at 1159. In considering the parties' arguments on claim accrual, the Seventh Circuit acknowledged the recent Watson decision and framed the issue as whether BIPA should be treated like a junk-fax statute for which a claim accrues for each unsolicited fax or, instead, like certain privacy and reputational torts that accrue only at the initial publication of defamatory material. Id. at 1162.
Illinois's highest court, which heard oral argument in Cothron in May 2022, is set to provide a conclusive answer to this issue soon. At oral argument, Appellant White Castle System, Inc. ("White Castle"), advocating for a single-accrual rule, stressed prior cases holding that accrual occurs when the privacy right is first invaded because that is when the loss of control occurs. White Castle further argued that the issue of damages is necessarily intertwined with the issue of accrual and encouraged the Illinois Supreme Court to weigh the consequences of holding that accrual occurs at each collection. Appellee Cothron claimed that White Castle's view would allow the defendants to avoid consequences for compounding existing issues. Cothron also maintained that damages are separate from the issue of disclosure but conceded that the Court may spell out how damages should be determined.
The implications of the accrual question are far-reaching. BIPA provides for statutory damages of $1,000 for each negligent violation or $5,000 for each intentional or reckless violation. In the event that the Illinois Supreme Court rules that serial accrual is available under BIPA, the combination of that ruling and the newly established five-year statute of limitations will result in an exponential increase in potential statutory damages under BIPA.
Katten's Biometric Litigation Team is closely following this issue and can help with questions about BIPA, the Cothron case, or biometric data protection issues in other jurisdictions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
