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March 11, 2021
By Alison Frankel | Reuters (March 10, 2021) -- If you want to know why defendants would rather litigate class actions in federal court than state court, look no further than the Senate Judiciary Committee's 2005 report on the Class Action Fairness Act.
CAFA, as you know, allows defendants to remove class actions filed in state court to federal court, as long as the cases involve at least 100 plaintiffs, one of whom must be from outside of the defendant’s home state, and potential liability of at least $5 million.
Why not just allow those class actions to be litigated in state court? Because – at least according to the Senate Judiciary Committee at the time – state courts can’t be trusted to apply class action rules consistently. State judges all too often exercise “inadequate supervision” over class action litigation and proposed settlements, effectively ceding control to plaintiffs lawyers.
I have a less jaundiced view of class action lawyers and state court judges than the Judiciary Committee did in 2005. But I also don't doubt that for some causes of action, plaintiffs lawyers will fight to keep class actions in state court. Surely, for instance, it's not a coincidence that more than 80% of the class actions asserting claims under the Illinois Biometric Information Privacy Act are originally filed in state court, according to a 2019 Seyfarth Shaw study.
Cook County Circuit Court, in particular, is a magnet for BIPA class actions, said study co-author Gerald Maatman, thanks to judges who allow wide-ranging discovery, a plaintiffs-friendly jury pool, and relaxed standards of class certification. “The preference for state court is a reflection of (those) dynamics,” Maatman said in an email.
I’m offering this background as context for a decision on Tuesday by the 7th U.S. Circuit Court of Appeals that promises to make it easier for plaintiffs in BIPA class actions to litigate in state court, which is where the vast majority of them want to be.
The appeals court denied a request by the facial recognition software company Clearview AI to stay the issuance of its mandate in Thornley v. Clearview AI, a BIPA class action. In the Jan. 14 decision Clearview AI sought to stay, the 7th Circuit affirmed the remand of the class action to Cook County state court, ruling that plaintiffs lawyers at Silver Golub & Teitell had carefully crafted the complaint to allege only a generalized regulatory violation of the state privacy statute – not a concrete injury that would establish constitutional standing to sue in federal court. Tuesday's one-word denial of Clearview AI's motion means the case will move ahead in state court.
I emailed a Clearview AI spokeswoman and Clearview AI counsel Lee Wolosky of Jenner & Block about the stay denial but didn’t hear back.
As I've previously reported, the company told the 7th Circuit that it intended to seek U.S. Supreme Court review of the remand decision. Clearview AI argued that its case provided an opportunity for the Supreme Court to clarify constitutional standing requirements after 2016's Spokeo Inc v. Robins. Plaintiffs lawyer David Golub told the 7th Circuit in his brief opposing the stay that Clearview AI's motion appeared to be simply a delay tactic, since it would be "bizarre" for a class action defendant actually to ask the Supreme Court to expand its rules on standing to sue for mere statutory violations.
Golub told me there's a particular reason why he and his clients wanted to keep the Clearview AI class action in state court. The company is facing a plethora of federal lawsuits that were consolidated in a multidistrict litigation last December. The MDL includes cases asserted under the privacy laws of many different states, Golub said. So if Clearview had succeeded in keeping his clients' class action in federal court it would have been swallowed up in a complex MDL. In state court, Golub said, the case can move much more quickly.
Golub said BIPA plaintiffs can plead their way out of federal court because of the idiosyncrasy of Illinois standing law and state-law precedent on BIPA claims. As the 7th Circuit has acknowledged in other BIPA rulings, Illinois has more lenient standing requirements than federal courts when it comes to alleging an injury. And in 2019’s Rosenbach v. Six Flags, the Illinois Supreme Court specifically held that plaintiffs can bring BIPA cases based only on bare statutory violations, without alleging an actual injury.
That’s how Golub very deliberately pled the Thornley class action, which claims only that Clearview AI violated BIPA’s statutory prohibition on profiting from the unauthorized sale of biometric data. As the 7th Circuit said in its January decision affirming the remand to state court, “allegations matter.”
By refusing to delay the remand, the appeals court underlined that conclusion. Not every class action plaintiff who would prefer state court will be able to tailor pleadings to get around CAFA. But BIPA plaintiff who heed the 7th Circuit’s ruling in Thornley can.
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