This consolidated appeal involves three cases where plaintiffs alleged that their employers violated the Illinois Biometric Information Privacy Act (BIPA) by collecting biometric data without proper consent. The core dispute stems from a 2023 Illinois Supreme Court decision, Cothron v. White Castle Sys., Inc., which held that a new claim accrues every time an individual's biometric data is scanned or transmitted. This 'per-scan' theory of claim accrual created the potential for 'annihilative liability,' with some class actions threatening damages in the billions of dollars. In response, the Illinois General Assembly amended Section 20 of BIPA in 2024 to clarify that damages should be calculated on a per-person basis, limiting recovery to one instance per person regardless of how many times the data was collected. The district courts in these cases initially rejected the amendment's retroactive application, but the Seventh Circuit consolidated the appeals to resolve whether the new damages cap applies to cases already pending in court.
The Seventh Circuit applied Illinois's modified version of the federal retroactivity test, which focuses on whether a statute is substantive or procedural. Under Illinois law, substantive amendments that prescribe rights and duties generally do not apply retroactively unless expressly stated. However, procedural or remedial amendments apply retroactively to pending cases. The court analyzed the 2024 amendment to Section 20 and determined it was a remedial change. The amendment did not alter Section 15, which defines the substantive standards for liability and when a violation occurs. Instead, it modified Section 20, which governs the availability of liquidated damages. The court reasoned that the amendment merely 'cabined the recovery available against defendants' rather than changing the rights or duties of the parties. The court rejected the plaintiffs' argument that the amendment was substantive because it altered the scope of liability. It clarified that the term 'violation' in the context of damages refers to the remedy, not the underlying conduct. The court noted that the Illinois Supreme Court in Cothron had already expressed concern about 'annihilative liability' and invited the legislature to clarify the damages assessment. By limiting recovery to 'at most, one recovery' per person, the amendment addressed the remedial aspect of the statute without changing the substantive rules of conduct. Consequently, the court held that the amendment applies retroactively to all pending cases.
The decision mandates that district courts recalculate statutory damages for all pending BIPA cases based on the number of affected individuals rather than the frequency of scans. This significantly reduces potential liability for defendants, transforming cases with billions of dollars in exposure into claims with much lower, per-person caps. The court remanded the cases for district courts to apply this new damages standard. The decision also clarifies that the 2024 amendment did not overturn the Cothron ruling on claim accrual but only modified the damages calculation, leaving the substantive liability standards intact.