Chicago, Ill. (August 5, 2024) - Illinois Gov. J.B. Pritzker signed S.B. 2979, the "BIPA Amendment," into law on Friday, August 2, 2024. The long-awaited BIPA Amendment is effective immediately, and should bring welcome relief to those doing business in the State of Illinois.
Unanimously passed by the Illinois Legislature in 2008 to no fanfare, the Illinois Biometric Information Privacy Act ("BIPA") was championed by privacy advocates as a law that ensures individuals control access to their personal biometric data and prohibits private entities - including employers - from collecting it without providing notice and obtaining each individual's consent. Non-compliance means potentially hefty penalties, as the Act permits liquidated damages of up to $1,000 per violation if a plaintiff can prove negligent violations and up to $5,000 if a plaintiff can prove reckless or intentional violations. Because the damages provision of BIPA applies to "each violation" of the Act, some attorneys who filed BIPA litigation argued for the interpretation that a violation occurs for each and every single input or collection of data. For example, if an employee is required by her employer to clock in and out of work every day with a biometric identifier as defined by BIPA, i.e., four clock punches per day, and her employer failed to comply with the notice and consent provisions of BIPA, that employer could be liable for over $5 million in damages per employee per year.
All of that now has changed. Last year, the Illinois Supreme Court invited the Legislature to clarify how damages ought to be calculated in Cothron v. White Castle, where the Court concluded that although damages available in a BIPA action are discretionary, a BIPA claim may accrue with each individual collection of a biometric identifier, cementing the potential for ruinous damages that could bankrupt companies. The White Castle decision caught the attention of the Legislature, as the defendant pointed out in that case it could be liable for damages in excess of $17 billion if such an application of BIPA's damages provision were to stand. In response, both houses of the Illinois Legislature overwhelmingly voted earlier this year to pass S.B. 2979 (the "BIPA Amendment"), which amends BIPA to reduce the potential liability private entities face to a single recovery per individual affected, assuming the same biometric identifier is collected using the same method. Under the amended law, maximum recovery in the example above would be reduced from $5 million per employee per year to $5,000 per employee, assuming a plaintiff could prove the collection of a biometric identifier and reckless or intentional conduct by the employer or $1,000 for a negligent violation. Similar limitations have been placed on damages for disclosure of biometric data under the Act. Finally, the BIPA Amendment codifies that an electronic signature is acceptable under the Act, although under applicable law, this already appeared to be clear.
To any company that has faced a BIPA lawsuit, past or present, this is welcome and common-sense news. But if your business is in the middle of defending against a BIPA lawsuit, you might be asking yourself, will my business retroactively experience relief from the BIPA Amendment? We believe the answer to that question is a hearty YES.
Under Illinois law, when an amended statute is silent on its own retroactive application and does not including a savings clause, as is the case with the BIPA Amendment, courts evaluate whether a given provision of that statute is substantive or procedural. Substantive amended provisions are applied prospectively, while procedural provisions are applied retroactively. People v. Stefanski, 2019 IL App (3d) 160140, ΒΆ13 (citing Perry v. Department of Financial & Professional Regulation, 106 N.E.3d 1016, (Ill. 2018). Statutory amendments that affect remedies are typically interpreted to be procedural and not substantive.
The Illinois Supreme Court has held that a statutory amendment is procedural when "no vested rights are involved," and when that occurs, the application of an amended provision to a pending lawsuit "is proper, irrespective of when the cause of action accrued or the complaint was filed." Dardeen v. Heartland Manor, Inc., 710 N.E.2d 827, 832 (Ill. 1999). In Dardeen, the Illinois Supreme Court concluded that the plaintiff in that case had no vested right to treble damages previously authorized under the relevant statute prior to its amendment, and the Court further held that a plaintiff had "no vested right to exemplary, punitive, vindictive, or aggravated damages." Id. citing Smith v. Hill, 147 N.E.2d 321 (Ill. 1958). As noted by the Dardeen court, it has been well settled for over a century that, prior to judgment, a plaintiff has no vested right to a particular method of procedure or remedy.
Although the law in Illinois is clear, as has been the case since Illinois was slammed with thousands of BIPA filings, we anticipate significant argument over the precise impact of the BIPA Amendment on individual cases throughout the state, which are in all stages of litigation. However, companies today are in a significantly better position than they were before the BIPA Amendment.
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