USA – ILLINOIS Trends and Developments Contributed by: Paul Yovanic, Jason Priebe, Ada Dolph and Michael Jacobsen, Seyfarth Shaw LLP
payment for healthcare in compliance with fed - eral, state, and local regulations. As a result, the split is all but certain to lead to further guidance by Illinois reviewing courts on the breadth and limits of the BIPA healthcare exemption. State contractor exemption BIPA also provides that “[n]othing in this Act shall be construed to apply to a contractor, sub - contractor, or agent of a State agency or local unit of government when working for that State agency or local unit of government.” To date, only one Illinois appellate court has addressed this exemption. In Enriquez v Navy Pier, Inc., the defendant was a not-for-profit corporation that operated exclusively for the purpose of “sup - porting, sustaining, investing its funds in and for, and lessening the burdens of government relat - ed to the operation of Navy Pier” in Chicago. In affirming the dismissal of the plaintiff’s complaint based on the state contractor exemption, the First District Illinois Appellate Court articulated the following test. An entity falls within the exemption if it: • is a contractor; • is of a unit of government; and • was working for that unit of government at the time it collected or disseminated the alleged biometric information. The court reasoned that the defendant fell under this exemption because it was a “contractor” under the ordinary meaning set forth in Black’s Law Dictionary and it “worked for” the govern - ment entity that owned Navy Pier because it performed services for it under their contract. Despite this broad interpretation of the state contractor exemption in Enriquez, Illinois trial courts have been inconsistent in their applica -
tion of the exemption. For example, the Circuit Court of Cook County in Miranda v Pexco, LLC ruled that “when working for” means during the same period of time that the plaintiff was working for the defendant rather than while the defendant was actively working on fulfilling the government contract or while the plaintiff was working on the contract. The Court framed the issue as a “temporal question” that asks simply whether the plaintiff was working for the defend - ant during the same time that the defendant had a government contract and was a state contrac - tor or subcontractor, and such question could be decided on a motion to dismiss. On the other hand, other Illinois trial courts have ruled that discovery and an inquiry into the type of contract at issue or the amount of revenue that the entity derives from the contract may be necessary to determine the applicability of the BIPA state con - tractor exemption – such that any ruling on the exemption would have to be reserved for sum - mary judgment. Retroactivity of statutory damages amendment In the seminal case of Cothron v White Castle System, Inc. in 2023, the Illinois Supreme Court ruled that a BIPA claim accrues each time that biometric identifiers or information are collected or disseminated, and not only on the first scan and first transmission. While the defendant and others cautioned that this interpretation of the statute could potentially result in “annihilative liability” – ie, to the extent it was read as endors - ing a separate damages award for each scan or dissemination of biometric information – the Illinois Supreme Court emphasised that there is no language in the Act suggesting a legislative intent to authorise an award that would result in the financial destruction of a business. None - theless, in light of these policy concerns, the Illinois Supreme Court urged the Illinois legis - lature to clarify its intent regarding the assess -
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