Today the Seventh Circuit issued a ruling which affirmed the dismissal of claims filed under Illinois’s Genetic Information Privacy Act. Bridges, et al. v. Blackstone, Inc., No. 22-2486 (7th Circ. 2023). Because this decision limits in most instances the circumstances under which claims could be brought under the statute in the context of a corporate transaction, it is a win for defendants in future filed cases. Read on to learn more.
Although many courts are familiar with Illinois’ Biometric Information Privacy Act (“BIPA”), the Illinois General Assembly has also enacted a law to protect the privacy of residents’ genetic information. Illinois’s Genetic Information Privacy Act (“GIPA”) went into effect in 1998. To generalize, GIPA regulates the use of genetic testing information in both the medical and commercial settings. Section 30 of the Act provides that no person or company “may disclose or be compelled to disclose the identity of any person upon whom a genetic test is performed or the results of a genetic test in a manner that permits identification of the subject of the test.” 410 ILCS 513/30(a). Like BIPA, GIPA is enforceable through a private right of action as Section 40 provides “[a]ny person aggrieved by a violation of this Act shall have a right of action” in an Illinois court.
Two years ago, in July 2021, Plaintiffs filed a putative class action in Illinois state court alleging that Defendant had violated Section 30 of GIPA. Plaintiffs alleged that they had purchased DNA testing products from Ancestry.com and submitted saliva samples for genetic sequencing. Prior to Plaintiffs commencing litigation, Defendant had purchased Ancestry in an all-stock “control acquisition”. Because Ancestry had allegedly paired Plaintiffs’ genetic tests with personally identifiable information—including names, emails, and home addresses—Plaintiffs asserted that Defendant, as part of acquiring Ancestry, had compelled the disclosure of Plaintiffs’ genetic identities in violation of Section 30. Notably, Plaintiffs did not assert that their genetic information had otherwise been specifically misused or disclosed in violation of GIPA outside the context of the corporate transaction at issue.
In addressing Blackstone’s arguments for dismissal of Plaintiff’s complaint, both the Illinois District Court and the Seventh Circuit Court of Appeals found it necessary to resolve a fundamental question concerning GIPA’s scope: whether under Section 30 GIPA liability can attach to a company like Blackstone that allegedly receives protected information, rather than discloses that information.
On this issue, the Seventh Circuit sided with Defendant. The Court held that it could not “plausibly infer that a run-of-the-mill corporate acquisition, without more alleged about that transaction, results in a compulsory disclosure within the meaning of Section 30.” This was because, the Seventh Circuit reasoned, “[a]ll we can say with certainty about Blackstone’s all-stock acquisition of Ancestry is that a change in ownership occurred—nothing more. Put simply, we cannot infer from an acquisition alone—at least one structured as a stock transaction—that Blackstone compelled Ancestry to disclose genetic information.” (emphasis supplied).
Moreover, the Seventh Circuit also held it was of no consequence “that Blackstone may have pursued the deal, at least in part, to obtain Ancestry’s genetic information” or that “Blackstone, as part of the firm’s broader investment strategy, planned to sell data from unnamed portfolio companies to unaffiliated third parties.” This was because, the Seventh Circuit explained, “[t]he complaint still lacks a plausible allegation that Blackstone compelled Ancestry to disclose protected information [under GIPA.”) (emphasis in original).
This case is a welcome win for the defense bar and sets forth clear limits for GIPA claims going forward. The decision is notable as a contrary ruling adopting Plaintiff’s interpretation of the statute could have significantly expanded the scope of GIPA to include circumstances common to many corporate transactions. For more, stay tuned. Privacy World will be there to keep you in the loop.