Earlier this week, U.S. District Judge Jorge Alonso granted preliminary approval of Corner Bakery Café’s $3.2 million biometric privacy settlement in Jones v. CBC Restaurant Corp., No. 1:19-cv-06736 (N.D. Ill. June 12, 2020). The court’s preliminary approval brings the parties one step closer to final resolution of the proposed class action filed by plaintiff Ebony Jones in August 2019.
As highlighted in prior blog posts, the Corner Bakery class action is one of the hundreds of BIPA lawsuits that have been filed since the Illinois Supreme Court’s ruling last year that individuals can sue based on a statutory violation alone. BIPA – which restricts how companies can collect, store, use and destroy biometric data – provides statutory damages for negligent or reckless violations, and also provides for recovery of attorneys’ fees, costs and injunctive relief.
In the case at hand, plaintiff — a former employee of Corner Bakery — claimed Corner Bakery illegally collected, possessed and disclosed its Illinois employees’ biometric data through a finger-scan timekeeping system without following BIPA’s written disclosure or consent requirements. Plaintiff alleged that Corner Bakery violated BIPA in three ways: (1) collecting biometric identifiers and information without following BIPA’s informed written consent procedures; (2) possessing biometric identifiers and information without establishing a publicly available data retention schedule and destruction policy; and (3) transferring the biometric identifiers and information to Corner Bakery’s timekeeping vendor without consent.
Soon after the lawsuit was initiated, Corner Bakery moved to dismiss the claims by attacking the constitutionality of BIPA. Corner Bakery asserted that BIPA’s minimum liquidated damages scheme violated the Separation of Powers provision of the Illinois Constitution by usurping the judiciary’s authority to determine the proper amount of damages. It also argued that the statute violates the Equal Protection and Due Process clauses of the U.S. Constitution by arbitrarily excluding financial institutions and government contractors from coverage and by imposing minimum liquidated damages with no rational relation to any legitimate state interest. It also argued that BIPA violated the Special Legislation provision of the Illinois Constitution by arbitrarily excluding financial institutions and government contractors from coverage.
In January 2020, the parties moved for a stay of the action to pursue settlement discussions. The court granted the stay and denied with the motion to dismiss without prejudice and with leave to refile.
Under the deal, Corner Bakery agrees to pay a little more than $3.2 million to settle the proposed class action. Each of the proposed 4,000 class members will be paid approximately $800. Corner Bakery also represented that it stopped using all systems relying on biometric data in Illinois on January 21, 2020 and agreed to delete all biometric data in its possession. Plaintiff is requesting a service award of $7,500 and the proposed class attorneys can seek one-third of the settlement as fees and up to $8,000 in expenses.
This is the parties’ second attempt at securing preliminary court approval of the settlement. Preliminary approval was initially denied on May 22, 2020 because the proposed settlement limited the ability of class members to object to the deal, speak at the final fairness hearing, or appeal. With those issues fixed, the court found the settlement “fair, reasonable, and adequate.”
The settlement – reached at a fairly early stage in litigation – demonstrates just how costly BIPA class actions can be for companies. Notably, the settlement amount was still less than the potential recovery at trial of statutory damages. Assuming a negligence standard, each class member may have recovered $1,000 per violation had they prevailed on the claims at trial. With the ability to seek one-third of the settlement as fees, the proposed class attorneys are primed to gain the biggest piece of the settlement pie.