Illinois Federal Court Rejects Efforts to Dismiss BIPA Claims Involving Virtual Trial Technology – Privacy Shield

Duane Morris Takeout – In a landmark decision for retailers, Judge Manish Shah of the United States District Court for the Northern District of Illinois recently denied in part defendant Estée Lauder’s motion to dismiss proposed class action claims alleging that its consumer “fitting on” technology violated Illinois biometric privacy. Law (“BIPA”). The Court rejected the defendant’s personal jurisdiction argument, as well as allegations that the terms and conditions of its website required the plaintiff to arbitrate its dispute and that the plaintiff lacked standing to sue on behalf of the persons who used websites that the plaintiff herself did not visit. In a decision entitled Kukovec v. L’Estee
Lauder Companies, Inc., Case No. 22-CV-1988 (ND Ill.), the Court determined, however, that the plaintiff did not sufficiently plead that the cosmetics giant intentionally or recklessly violated consumers’ biometric privacy rights, and thus rejected these allegations. The judgment in Kukovec illustrates the ongoing legal risks to retailers using “trial” technology to improve customer service.

Background to the case

Too Faced Cosmetics, a cosmetics brand owned by the accused Estée Lauder, operates a website with a trial function allowing shoppers to virtually try out its products. When a buyer clicks on a “Try Out” button, a pop-up appears containing a disclaimer informing the buyer that their “image will be used to provide you with the virtual try-on experience” and a link to a policy confidentiality. ID. to 4. If the buyer selects the “Live Camera” option, the user’s computer camera is activated and the product is superimposed on all or part of the user’s face. ID.

Plaintiff, an Illinois resident, alleged that Defendant’s test tool violated BIPA Section 15(b) by capturing users’ facial geometry without informing them how that data is collected, used or retained. ID. at 6. Plaintiff also alleged that Respondent did not have a publicly available written policy setting out how long such data is retained and when it is destroyed, in violation of BIPA Section 15(a). ID. Plaintiff filed a putative class action lawsuit against Defendant, seeking to represent a class of individuals who used the virtual try-on tool not only on Too Faced’s website, but also on four other websites for others defendant’s marks. ID. The defendant remanded the case to federal court based on the diversity jurisdiction and the Class Action Fairness Act, then moved to dismiss the suit.

The Court’s Decision on the Respondent’s Motion to Dismiss

The Respondent sought to dismiss the Plaintiffs’ claims on four grounds, three of which the Court rejected entirely.

First, the defendant argued that the Court lacked personal jurisdiction over him since his “Try On” tool was “geographically neutral”, did not target Illinois consumers, and the tool’s mere accessibility to Illinois consumers had no substantial connection with the defendant’s sale of cosmetics. and employees in Illinois. ID. at 8. The Court rejected this “too narrow” interpretation of personal jurisdiction. He noted that “[t]The fitting tool is part of [Defendant’s]marketing and sales strategy for cosmetics”, since those who use the tool are also presented with buttons to add the products to their basket or send them as gifts. ID. at 9 o’clock.

Second, the defendant argued that the venue was inappropriate because the plaintiff’s claims were subject to arbitration pursuant to a provision of its website terms and conditions. ID. at 11. At the heart of the issue of whether the claimant had implied knowledge of the arbitration agreement was whether the terms and conditions were presented in the form of a “clickwrap”, where a client must affirmatively tick a box to give assent (because courts usually uphold such assent), or “browsewrap” form, where a customer’s continued use of a website is considered passive consent (and which requires further analysis). The defendant’s website contained both click-through and navigation forms, but the plaintiff only visited pages with navigation forms.
ID. at 12. Users of the virtual try-on tool received a pop-up notification containing Too Faced’s privacy policy, not its terms and conditions, although the privacy policy contains a link to the terms and conditions. ID. On other pages, the terms and conditions were presented at the bottom of the web pages “among fifteen links to other pages on the site and six links to social media platforms…”. ID. The Court held that such a website design was insufficient to provide constructive advice, as a customer “could easily try out the tool without having to confront the terms and conditions link once”.
ID. at 14. Additionally, the Court rejected defendant’s argument that plaintiff received implied notice because she recently filed two other BIPA-related lawsuits against TikTok and L’Oréal, noting that a Website user “is not automatically notified that any website she visits may have terms and conditions simply because she has visited other websites that have them.” ID. at 15. Accordingly, the Court held that the plaintiff lacked constructive knowledge and that the arbitration clause could not be enforced against her.

Third, the defendant also sought to dismiss the complaint on the grounds that it provided only “conclusive legal statements” and lacked sufficient facts establishing that the defendant had captured users’ facial geometry, collected biometric data, or acted negligently. , recklessly or intentionally under the BIPA.
ID. at 16. The Court disagreed. It concluded that the Complaint “allegates enough to infer” that the Defendant captured the Plaintiff’s biometric information and “no intermediary separated the Defendant from the collection of the Plaintiff’s facial geometry.” ID. at 17. However, since recklessness and intentionality require a specific state of mind which the plaintiff did not allege, the Court dismissed the plaintiff’s claims for reckless or intentional conduct, but gave the plaintiff the possibility of modifying his complaint.
ID. at 18 years old.

Finally, the defendant argued that since the plaintiff did not use the websites of its four other brands that use the virtual try-on tool, it did not have standing to sue on their behalf. The Court noted that because no group had been certified, the defendant’s argument was nonetheless premature. The Court held that the plaintiff “alleged harm caused by technology deployed on multiple websites” and that standing exists because the plaintiff’s harm “can be remedied by an award in its favour.”
ID. at 20.

Implications for companies using biometric equipment

By allowing consumers to “try on” products in a virtual environment, retailers are increasingly relying on biometric data to deliver hyper-personalized services and recreate the real-world shopping experience for the world. virtual. But as the popularity of testing technology grows, so does the legal risk of biometric data privacy lawsuits. Since 2019, many retailers have been sued for violating BIPA and other national biometric privacy laws for their use of testing technology and other digital tools to personalize consumer recommendations. The Kukovec The decision highlights how new technologies expose companies to costly litigation, even when they take steps to inform consumers or force arbitration. Companies need to think about how they inform customers about trial technology, ensure their privacy policies stay up-to-date with changing legislation and competing definitions of “biometric data”, and implement appropriate safeguards and consent processes.

Disclaimer: This alert has been prepared and posted for informational purposes only and is not offered and should not be construed as legal advice. For more information, please see the full disclaimer.

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