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BIPA’s legacy continues to grow. Arbitration may never be the same

BIPA’s legacy continues to grow. Arbitration may never be the same
 

When legislators in the U.S. state of Illinois wrote their now landmark biometric privacy law in 2008, they intended to make companies more transparent about how they use consumers’ most valuable personal data.

In a twist, that law might also alter how companies protect themselves against sometimes-mountainous judge-ordered payout to plaintiffs. They would do well to try to be less clever.

To wit, Samsung Electronics America was in a federal court in Illinois this week continuing to complain to a U.S. district court judge that an “aggressive threat” is being made against Samsung by holding the firm to a consumer product contract that its own lawyers wrote.

Samsung, which has moved to dismiss being forced into arbitration the way it forces its customers into arbitration, might have to get used to that threat, however.

The arbitration waters are muddied.

The genesis of this disagreement (case 1:22cv05506) is in the Biometric Information Privacy Act. Illinois consumers say Samsung violated provisions of BIPA and seek compensation.

Ordinarily, a lawyer would propose a class action based on the fact that BIPA cases typically draw in thousands of plaintiffs, according to reporting by law trade publication Law 360.

But Samsung, like many companies doing business in the United States have tried to thwart the filing of class actions by writing arbitration clauses into product contracts. Erroneously, they might be thinking that it is too costly for plaintiff attorneys to sew hundreds or thousands of arbitration cases together.

Without getting too deeply into the weeds, plaintiffs and Samsung were each on the hook for large upfront arbitration costs. Lawyers for the 50,000 plaintiffs paid their clients’ share, $2.5 million, but Samsung balked. (Another 20,000 have been notified of their legal options by the plaintiffs’ attorneys, according to the suit.)

Court documents state that the vendor’s attorneys have demanded that the plaintiffs pay the whole bill, a demand that violates Samsung’s own product contract for the products in question.

No less than Amazon’s CEO, Andy Jassy took a look at a future full of class actions, many for alleged biometric privacy violations, and came to a similar conclusion 18 months ago about the attractiveness of arbitration.

Jassy may not be itching to scrap, but he seems openly contemptuous of accusations that his company wrongly takes ownership of its customers’ biometric data – and how to fight them.

Almost simultaneously, Amazon removed arbitration clauses from all digital and printed documents, apparently prepared to just get to court to make its case that BIPA is an unconstitutional hindrance to the free speech rights of Amazon.

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