It used to be that many of Michigan's college graduates left the state to go to Chicago.  Plentiful jobs, a vibrant downtown, and reasonable costs for living.  But that has changed.  Although the city is vibrant, Chicago is expensive, and businesses are leaving.  Illinois’ reputation has taken a hit in past years. Since 2000 two out of four governors were convicted and sentenced.   Moreover, Illinois’ constitution has been read by the Illinois Supreme Court as a literal protection of all things pension-related, so any reform will require a constitutional amendment.  No wonder why Illinois has the 3^rd largest loss of population. 

Now comes a new Illinois Supreme Court decision that will accelerate that movement out of state. The Biometric Information Privacy Act (BIPA) was passed by the Illinois General Assembly on October 3, 2008. Although other states like Texas and Washington state passed similar laws, the BIPA remains the only law that allows private individuals to file a lawsuit for damages stemming from a violation. The Act prescribes $1,000 per violation and $5,000 per violation if the violation is intentional or reckless. As a result, there has been a flurry of class action lawsuits because of this provision.

The question under the statute was whether a plaintiff has to prove actual harm with a violation of BIPA.  In 2017 the Illinois Appellate Court for the Second District issued the first ruling in this area, holding that a Plaintiff must allege an “actual injury” to be “aggrieved” under the Act in order to seek statutory damages and injunctive relief (Rosenbach v. Six Flags, 2017 IL App (2d) 170317 (Ill. App. Ct., December 21, 2017)).  This case was brought by Rosenbach, a mother for her minor son and all others similarly-situated, alleging that Six Flags Entertainment Corp. and Great America LLC violated the BIPA when her son purchased a season pass for Great America theme park and Six Flags fingerprinted him using a biometric scanner without obtaining written consent or disclosing their plan for the collection, storage, use, or destruction of his biometric identifiers or information.

The questions before the appellate court were, “was the alleged injury due to a technical violation such as not providing him or her the disclosures and obtaining written consent?” And if so, is the individual an aggrieved person under section 20 of the BIPA? 

The appellate court ruled that the answer was no to both questions. An actual harm had to be shown.  A technical violation is not enough for a private plaintiff to gain damages.  At the time, this was considered a significant victory for employers because any other ruling would be opening the floodgates of litigation. The case was appealed.

The victory was short-lived in the appellate courts.  In September 2018, the Illinois Appellate Court for the First District ruled otherwise; that a technical violation alone will allow a private plaintiff to gain damages (Sekura v. Krishna Schaumburg Tan, Inc. 2018 IL App (1st) 180175 (Ill. App. Ct., September 28, 2018).  Now there a split in the Illinois appellate courts.

On January 25, 2019, the Illinois Supreme Court overturned the Rosenbach case.  The Illinois Supreme Court held that “an individual need not allege some actual injury or adverse effect, beyond violation of his or her rights under the Act, in order to qualify as an ‘aggrieved’ person.”  Given this interpretation of this law, even with vigilance, Illinois employers could be hit will millions of dollars of lawsuits for a simple technical violation of the law, for example, criminal background checks, timekeeping using biometrics, wellness programs, etc.  Therefore, this ruling could lead to the next wave of employers leaving the “progressive” state. 

It is hoped that the State of Michigan will jump on the Indiana bandwagon to push advertising that compares business opportunities and environments between Illinois and Michigan.  Indiana has been doing that for some time and has experienced growth in the state.  Given that Illinois is shooting itself in the foot, Michigan needs to tout our economic environment and the vibrancy of, at minimum, Detroit and Grand Rapids areas to keep our graduates and talent in the state.

Source:  Seyfarth Shaw 1/31/19, 1/22/17, Winston & Strawn LLP 1/30/19