US biometric data privacy lawsuit against Clearview concludes after 5 years

The biometric data privacy lawsuit against Clearview AI has finally been officially settled.

The lawsuit has been crawling along since January 22, 2020. Since then, it has ben through two consolidation orders and multiple rounds of mediation.

The reasons for the ruling are laid out in an extensive Memorandum Opinion and Order (hosted by Courthouse News) by Judge Sharon Johnson Coleman.

The Illinois, Virginia, California, New York subclasses and nationwide class

Clearview’s status as a startup with a value proposition based in large part on scale presented challenges to the negotiation. Not only does the class include “virtually any individual whose face had been posted on the internet prior to and during the period of Clearview’s operation,” the memo says, “But as a start-up, Clearview was financially dependent on capital from investors and government contracts that had dried up during the litigation.”

The 2022 settlement with the ACLU, which closed off sales of Clearview’s biometric database to private sector organizations, also “significantly impacted the relief possible.”

Part of the reason for an equity settlement was in recognition of Clearview’s financial straits. Another was the related chances of the company going bankrupt, which would compensate “several security interests” before the settlement class.

The eventual agreement on a 23 percent stake in Clearview was arrived at in an attempt to balance an award “commensurate with the injuries” alleged, but also to not hamper the company in a way that would undermine the value of the award. Incentive payments to plaintiffs take the form of 50 pro rata shares of the settlement fund , capped at $1,500.

The award, which comes with an estimated value of $51.75 million, will be triggered by an IPO or a liquidation event. Alternatively, Clearview can pay 17 percent of GAAP revenue from the final settlement approval to September 30, 2027, or the settlement class could sell its right to the stake.

Objections overruled

Objectors took issue with the attorneys’ fees (39.1 percent), the notifications to class members and a host of other issues. Nearly half of the state attorneys general in the country filed an Amicus brief arguing that

But they did not cite a clear violation currently being committed by Clearview, Coleman writes.

“This is not an omission, but a practical result of the over five years of litigation in state and federal court seeking to ensure Clearview’s compliance with the law. Absent any such violations, it would be a dereliction of the Court’s duty to act as a fiduciary for the Settlement Class to reject a settlement, hard-fought and negotiated in good faith, and the relief it provides to address concerns not at issue in the present case.”

The attorneys fees are not unusual, and nearly 373 million “impressions” were delivered through major online platforms.

Article Topics

biometric data  |  Biometric Information Privacy Act (BIPA)  |  biometrics  |  Clearview AI  |  facial recognition  |  lawsuits