Court Splits McDonald's AI Drive-Thru Litigation, Some Claims Kicked Back To State Court

A federal court this week in the McDonald's AI litigation found that Plaintiff lacks Article III standing to pursue BIPA Section 15(a) and 15(c) claims. Consequently, it remanded these claims back to state court while letting other BIPA claims remain in federal court. Carpenter v. McDonald's Corporation, Case No. 1:21-cv-02906 (N.D. Ill.). This highlights an interesting divide in how BIPA claims are handled by federal district courts in wake of opinions recently issued by the Seventh Circuit regarding BIPA and standing.

Recall that the Carpenter complaint, which was initially filed in Illinois state court, alleges that "[i]n an effort to reduce costs and staff, beginning sometime in 2020 McDonald's implemented an artificial intelligence (AI) voice assistant in the drive through of various McDonald's restaurants across the nation, including in Illinois." Compl. ¶ 6. The crux of Plaintiff's claim is that "McDonald's AI voice assistant's voice recognition technology collects customers' voiceprint biometrics in order to be able to correctly interpret customer orders and to identify repeat customers to provide a tailored experience." However, "McDonald's has failed to comply with BIPA's regulations and does not notify its customers that when they interact with McDonald's AI voice assistant their voiceprint biometric information is used and collected, nor does McDonald's obtain their consent to do so." Compl. ¶¶ 8-9.

Plaintiff alleged that McDonald's violation BIPA Sections 15(a), 15(b), 15(c) and 15(d). After McDonald's removed the case to federal court, Plaintiff moved to remand claims brought under BIPA Section 15(a) and 15(c).

In granting Plaintiff's motion, the Court compared the allegations in the Complaint to two decisions recently issued from the Seventh Circuit in the context of BIPA Section 15(a) and Article III standing: Bryant v. Compass Grp. USA, Inc., 958 F.3d 617 (7th Cir. 2020) and Fox v. Dakkota Integrated Sys., 980 F.3d 1146 (7th Cir. 2020). Assessing the allegations in their totality, the Court held "[g]iven the lack of any allegation regarding Defendant's failure to comply with a policy, rather than merely the duty to disclose, the Court rules in favor of Plaintiff on this issue." And although the Court was technically bound by the allegations in the Complaint in reaching this decision, it also noted that "[t]he Court's holding is further bolstered, though not controlled, by Plaintiff's insistence in his motion and reply that he only alleges a violation of Section 15(a)'s public disclosure provision."

McDonald's is now faced with the challenging position of litigating BIPA claims from the same Plaintiff, involving the same key issues, on two different fronts. For more on this, stay tuned. CPW will be there to keep you in the loop.

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