USA – ILLINOIS Trends and Developments Contributed by: Paul Yovanic, Jason Priebe, Ada Dolph and Michael Jacobsen, Seyfarth Shaw LLP
case touched on whether the exemption should turn on a functional nexus between the biometric activity and the governmental work, the appellate panel also explored the practicality and predictability of a more straightforward temporal framework – an approach that trial courts have already found to be more work - able in its application. A written opinion has not yet been issued, but any guidance from the Third District will likely shape how courts state-wide evaluate the exemption and could help bring greater clarity to an area where a consistent, temporally focused analysis would provide both courts and litigants with a clearer path forward. Alternatively, should the Third District hold contrary to the First District, there is little doubt that the trial courts will continue to take inconsistent approaches themselves, and BIPA litigants will look to the Illinois Supreme Court for clarification. At the same time, the state-contractor exemption is also drawing increased scrutiny in federal court. In late 2025, a Northern District of Illinois judge granted a motion for interlocutory appeal under 28 USC Section 1292 (b) after denying a defendant’s attempt to invoke the exemption at the pleadings stage. Specifically, the question for interlocutory appeal is whether the state- contractor exemption imposes a purely temporal test or whether the BIPA violation must occur within the scope of a government contract. The court conclud - ed that the question presents a controlling, unset - tled issue of law appropriate for immediate appellate review. The matter was accepted by the Seventh Cir - cuit for review, fully briefed, and oral arguments were heard in mid-February 2026. Together, the pending Third District and Seventh Circuit decisions make 2026 a year to watch for the state‑contractor exemption under BIPA. Until clearer guidance emerges, entities performing gov - ernment‑related work should continue to document their contractual roles and the nature of the work performed, as courts remain divided on whether the exemption turns on timing, function or some combi - nation of both. Retroactivity of statutory damages amendment The question of whether the 2024 amendment to BIPA’s damages provision applies retroactively remains one of the most unsettled – and consequen -
tial – issues in this space. The amendment, enacted in response to the Illinois Supreme Court’s warning in Cothron v White Castle System, Inc that a per scan accrual theory could yield “potentially excessive dam - age awards”, limits an individual to a single recov - ery for the same method of collection. Whether that limitation governs only post amendment lawsuits or also applies to cases based on conduct that occurred before the amendment went into effect has sharply divided courts. When the authors last wrote about this, the fed - eral courts were already split. That divide has since deepened and in some respects shifted. One nota - ble development is the court’s reversal of its previ - ous position in Gregg v Central Transport LLC . In late 2024, this court had been one of the few to deem the amendment a mere clarification of existing statutory language, meaning that it should apply retroactively under Illinois precedent governing the issue. However, in March 2025, the same judge revisited the issue and reached the opposite conclusion. After examining the statutory text and its conflict with Cothron’s interpreta - tion of what constitutes a “violation”, the court deter - mined that the amendment substantively changed the statute and therefore could not be applied to con - duct or lawsuits predating its enactment under Illinois law. This reversal both underscores the difficulty that courts face in distinguishing “statutory clarification” from “substantive change” and highlights how rapidly views on retroactivity have evolved. At the same time, another federal court confronted the same question and concluded – consistent with much of the emerging authority – that the amendment is not retroactive. In that case, the court emphasised that determining whether an individual was injured once or hundreds of times goes to the substance of the right itself, squarely placing the amendment on the sub - stantive side of Illinois’ retroactivity framework. The court denied the defendant’s attempt to limit damages to a single recovery and, recognising the significance of the issue, certified its order for interlocutory appeal. In late 2025, the Seventh Circuit agreed to review this matter and accepted the request for interlocutory appeal. In doing so, the Seventh Circuit further con - solidated this issue with the state contractor exemp - tion above, in an attempt to determine both issues at
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