BNSF Deal Suggests More Privacy Cases Going to Trial in Illinois

A landmark federal settlement resolving an Illinois Biometric Information Privacy Act case could lead to more companies taking their cases to trial, lawyers said.

The settlement cut the initial penalty in the Northern District of Illinois case, Rogers v. BNSF Railway Co., by two-thirds. Lawyers also said a proposed bill in the Illinois legislature lowering the ceiling on plaintiffs’ awards could steer defendants away from settlement offers and toward the courtroom. And the possibility courts could begin assessing unsuccessful plaintiffs with defense costs could have the same effect, they said.

“I think in the right instances the defense bar is going to take these cases to trial,” said Mary Smigielski, co-chair of Lewis Brisbois Bisgaard & Smith LLP’s biometric information privacy practice. “I have some cases right now where the clients are on board and insurance carriers are on board” with rejecting settlement offers and preparing to try cases, she said.

Defendants “who truly have a good story to tell about trying to comply with the statute, they had some small problem with their consent process or missed something about the technology and they were truly trying to do the right thing and missed something small, I think in that kind of situation that might be a good test case,” Shook Hardy & Bacon LLP partner Matthew Wolfe said.

“It’s just going to depend on the facts: what the allegations are, what the company did in terms of its BIPA compliance. But I think there are cases where the compliance is at a level where there are additional legal defenses and it does make sense to go to trial,” Ogletree, Deakins, Nash, Smoak & Stewart PC shareholder and BIPA specialist Anne Larson said.

Calculating Damages

In Rogers v. BNSF Railway Co., a class of more than 40,000 members claimed the railway violated BIPA by illegally collecting biometric data. After a trial found the company liable, a federal judge imposed a $228 million penalty on BNSF. The judge then consented to a BNSF request to allow a jury set damages, but both sides agreed to settle the matter for $75 million before the damages trial began.

How courts will interpret the BIPA statute’s language in the future will take more than just analyzing the BNSF case, the lawyers said. But that settlement and a related Illinois Supreme Court ruling, Cothron v. White Castle System Inc., which held judges may use discretion when setting BIPA damages—including setting monetary damages at zero—have provided insight into how courts could interpret the statute and compel defense lawyers to consider a more aggressive stance when disposing of the privacy cases.

“Depending on how much insurance you have and how much reserves a client has, the more quantifiable the alleged violation is—you know exactly how many scans were taken and the functionality of the technology—I can see defendants rolling the dice” and proceeding to trial, Winston & Strawn LLP partner Sean Wieber said.

Some lawyers cautioned about a defense bar shift that may be too cavalier about betting their client’s business on a trial. The BNSF verdict decided the railway recklessly violated the law, making clear juries are willing to impose BIPA sanctions.

“The liability is very clear now. The law isn’t going away,” said plaintiffs’ bar attorney David Fish, a founding partner at Fish Potter Bolaños PC.

Smigielski was more upbeat. "[I]f you have good facts on your side and you think you have good arguments, and because the Illinois Supreme Court said these damages are discretionary, you could actually win,” she said. “And the defense can win these cases.”

The defense bar could also argue before juries that claims seeking astronomical damages aren’t realistic, Neal, Gerber & Eisenberg partner Jonathan Ksiazek said. King & Spalding LLP partner Tom Ahlering agreed. "[A] defendant facing potential significant damages and/or an inflated or unrealistic settlement demand may be more willing to take its chances at trial—particularly if there are potentially favorable facts, evidence, or defenses to present,” Ahlering said in a statement.

In such cases defendants could argue that much lower penalties, or no penalties at all, are justified if a case is taken to trial, the lawyers said.

Attorneys’ Fees, Damages Cap

Two other developments may steer defendants toward seeking trials in BIPA cases.

First, the statute allows the “prevailing party” to recover defense costs, which could impose large fees on plaintiffs losing BIPA cases. In another Northern District of Illinois case, Judge Elaine Bucklo ruled recoveries by defendants may be secured only when the plaintiffs act in “bad faith.” But Wieber said Bucklo’s ruling is only one interpretation of the “prevailing party” language and case law could shift more in favor of the defense in the future.

Secondly, the Illinois legislature is considering a bill (SB 2979) easing the process of gaining consent to collect biometric information and capping damages to one violation per person, not one violation for every time individuals provide companies with biometric information. The bill, approved 6-3 by the state Senate Judiciary Committee March 13, is sponsored by a Democrat and supported by the Democratic Senate president.

Illinois Chamber of Commerce President and CEO Lou Sandoval said the bill will likely be enacted but that it doesn’t go far enough. The law should be expanded to capture cases currently being litigated and also exempt technologies intended to provide security to employees and the places they work, he said.