Case: 1:20-cv-00512 Document #: 101 Filed: 08/28/20 Page 1 of 9 PageID #:1638
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
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`DAVID MUTNICK, for himself and others
`similarly situated,
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` Plaintiff,
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`v.
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`CLEARVIEW AI, INC.; HOAN TON-THAT;
`and RICHARD SCHWARTZ,
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` Defendants.
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`Case No. 1:20-cv-00512
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`Consolidated Case Nos.
`1:20-cv-00840
`1:20-cv-02989
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`Judge Sharon Johnson Coleman
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`Magistrate Judge Maria Valdez
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`DEFENDANTS’ MEMORANDUM IN OPPOSITION TO
`PLAINTIFF’S MOTION TO RECONSIDER STAY ORDER
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`Defendants Clearview AI, Inc. (“Clearview”), Hoan Ton-That, and Richard Schwartz
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`(together, the “Defendants”) respectfully request that the Court deny Plaintiff’s Motion to
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`Reconsider Stay Order (“Motion to Reconsider”). As discussed below, the Court’s decision to
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`grant a stay was reasonable, practical, and consistent with the overwhelming majority of cases that
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`have addressed this issue.
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`BACKGROUND
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`On August 21, 2020, the Court, “in its discretion,” granted Defendants’ motion to stay
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`(“Motion to Stay”) the above-captioned matter pending a decision from the Judicial Panel on
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`Multidistrict Litigation (“JPML”) on Defendants’ motion to transfer this consolidated action to the
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`Southern District of New York for coordinated or consolidated pretrial proceedings (“MDL
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`Motion”). ECF No. 99. In response to the Court’s reasonable exercise of discretion, Plaintiff filed
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`the Motion to Reconsider, which claims that Defendants’ Motion to Stay did not include two
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`“critical facts.” ECF No. 100 at 3. Plaintiff mischaracterizes both “facts.”
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`First, Plaintiff argues that the Motion to Stay “omits that Defendants’ transfer motion
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`Case: 1:20-cv-00512 Document #: 101 Filed: 08/28/20 Page 2 of 9 PageID #:1639
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`before the JPML is not included on the Panel’s docket for its upcoming September 24, 2020
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`hearing session,” and that the “JPML will not address the motion until December 3, 2020 – at the
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`earliest.” Id. Plaintiff’s prediction that the Panel will not address the MDL Motion until December
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`is speculative and assumes the Panel will elect to hold oral argument. But the Panel may decide
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`the MDL Motion without holding oral argument. See J.P.M.L. Rule 11.1(c) (providing that the
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`Panel “may dispense with oral argument” if the “facts and legal arguments are adequately
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`presented and oral argument would not significantly aid the decisional process”); J.P.M.L. Rule
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`11.1(b)(i) (“The parties affected by a motion to transfer may agree to waive oral argument.”).
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`1
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` The
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`Panel also has the authority either to add the MDL Motion to the September hearing schedule or
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`to set another oral argument date for the MDL Motion before the December hearing. J.P.M.L.
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`Rule 11.1(a) (“The Panel shall schedule sessions for oral argument and consideration of other
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`matters as desirable or necessary. The Chair shall determine the time, place and agenda for each
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`hearing session.”). The rules permit Plaintiff to submit a statement to the Panel concerning these
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`issues. J.P.M.L Rule 11.1(b). Notably, Plaintiff has remained silent. Even if the Panel does not
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`rule until early December—which is entirely guesswork at this point—a stay of a few months in
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`order to avoid potentially inconsistent rulings as well as a waste of party and judicial resources is
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`entirely appropriate in the context of a complex class action that may last for years.
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`Second, Plaintiff argues that “Defendants’ motion omits that they have not sought a parallel
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`stay of the New York Litigation and that they do not intend to do so.” ECF No. 100 at 4. This is
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`false. As the correspondence that Plaintiff attached to his Motion to Reconsider makes clear,
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`1 Defendants recognize that J.P.M.L. Rule 11.1(c) also says that the “Panel shall not consider transfer or
`remand of any action pending in a federal district court when any party timely opposes such transfer or
`remand without first holding a hearing session for the presentation of oral argument.” However, the next
`sentence says that the “Panel may dispense with oral argument” and the prior subpart provides that the
`parties may “waive oral argument.”
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`2
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`Case: 1:20-cv-00512 Document #: 101 Filed: 08/28/20 Page 3 of 9 PageID #:1640
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`Defendants intend to request at an upcoming conference with Chief Judge McMahon that she
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`“continue the stay she had effectively entered until the decision of the JPML.” ECF No. 100-3 at
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`4. As Plaintiff is aware, the parallel cases pending in New York (the “New York Actions”) have
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`effectively been stayed for over three months. Id. On May 14, 2020, Chief Judge McMahon
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`ordered that “Defendants’ time to respond to Complaints in these actions is adjourned sine die.”
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`ECF No. 100-4; see also ECF No. 100-5 (“No one respond to anything until I say so.”). On August
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`18, 2020, the same day Defendants filed their MDL Motion and sent a copy of the MDL Motion
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`to Chief Judge McMahon, she scheduled a telephone conference for September 9, 2020—at which
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`Defendants anticipate discussing the impact of the MDL Motion on the New York Actions. As
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`Defendants explained to Plaintiff, Defendants intend to request at the conference that Chief Judge
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`McMahon continue the stay she has effectively put in place and, “if the [C]ourt so instructs, to file
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`a motion related to the New York cases.” ECF No. 100-3 at 2.
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`ARGUMENT
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`The authorities cited by Plaintiff make clear that motions to reconsider are “rarely” granted
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`because they require unusual circumstances, such as “where the Court has patently misunderstood
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`a party.” See ECF No. 100 at 5 (quoting Bank of Waunakee v. Rochester Cheese Sales, Inc., 906
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`F.2d 1185, 1191 (7th Cir. 1990)); see also id. (quoting Ahmed v. Ashcroft, 388 F.3d 247, 249 (7th
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`Cir. 2004) (“To be within a mile of being granted, a motion for reconsideration has to give the
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`tribunal to which it is addressed a reason for changing its mind.”)). Plaintiff argues that
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`reconsideration is appropriate when a court has “made an error not of reasoning but of
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`apprehension,” id., but here the Court made a fully informed, reasonable, and discretionary
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`decision to grant the Motion to Stay.
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`Instead of addressing the numerous cases cited by Defendants that have granted stays in
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`3
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`Case: 1:20-cv-00512 Document #: 101 Filed: 08/28/20 Page 4 of 9 PageID #:1641
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`these exact circumstances, Plaintiff relies exclusively on a single case, Terkel v. AT&T Inc., Nos.
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`06 C 2837, 06 C 2680, 2006 WL 1663456 (N.D. Ill. June 9, 2006). But Terkel is distinguishable
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`in at least two crucial ways.
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`First, Plaintiff argues that the defendants in Terkel “had not sought a stay of the litigation
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`in the other forum where related cases were pending.” ECF No. 100 at 6. However, in Terkel, the
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`defendants’ motions to dismiss in the related case were “currently being briefed,” and oral
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`argument on those motions was scheduled for “well over a month before the earliest date that
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`defendants say the JPML might consider” the pending MDL motion. 2006 WL 1663456, at *2.
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`As a result, the Terkel court concluded that the defendants “appear to be willing to have more than
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`one judge decide the allegedly common or overlapping issues.” Id. By contrast, here, there is no
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`activity in the New York Actions, no motions are pending or due, and, contrary to the facts in
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`Terkel, Defendants intend to ask Chief Judge McMahon at the upcoming conference to continue
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`the stay that is effectively in place, including by filing a formal motion if necessary.
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`Second, the plaintiffs in Terkel sought a preliminary injunction because the “information
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`in which they have a significant statutory privacy interest has been and is still being disclosed.”
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`Id. at *3 (emphasis added). Here, by contrast, Plaintiff is not subject to any alleged ongoing harm.
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`As a threshold matter, Plaintiff has not and cannot credibly allege that his image is even included
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`in Clearview’s database; Plaintiff’s standing to be before the Court as a class representative will
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`be addressed as appropriate at a future point in these proceedings. But even if Plaintiff’s image
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`is in the database, he suffers no legally cognizable ongoing harm as a result of Clearview’s
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`voluntary changes to its business practices in and around May 2020. Clearview presently operates
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`exclusively as a “contractor, subcontractor, or agent of a State agency or local unit of government.”
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`740 ILCS 14/25(e); ECF No. 56-2 ¶ 16 (Clearview has cancelled the account of every user who is
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`4
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`Case: 1:20-cv-00512 Document #: 101 Filed: 08/28/20 Page 5 of 9 PageID #:1642
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`not a “law enforcement body or other federal, state or local government department, office or
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`agency”). This means Clearview’s current operations are expressly exempt from BIPA (assuming
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`it applies to Clearview)—a fact that Plaintiff does not deny.
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`2
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` Thus, unlike the plaintiffs in Terkel,
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`Plaintiff and the putative class members are not suffering any alleged ongoing harm and are not
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`prejudiced by the stay entered by the Court. In short, the Terkel comparison is a false one.
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`Relatedly, Plaintiff criticizes Defendants for not pursuing a stay in the Thornley case, where
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`a motion to remand is now fully briefed. However, far from being a “strateg[ic]” decision, the
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`case cited by Plaintiff shows precisely why Defendants did not seek a stay in Thornley. ECF No.
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`100 at 9 n.9 (citing Bd. of Trs. of the Teachers’ Ret. Sys. of the State of Ill. v. Worldcom, Inc., 244
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`F. Supp. 2d 900 (N.D. Ill. 2002)). As Worldcom explained, “when remand motions in cases
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`potentially subject to MDL consolidation raise unique issues of law or fact, channeling the
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`decisions to a single court would result in little or no savings of judicial resources.” 244 F. Supp.
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`2d at 903. Such is the circumstance in Thornley, where the remand motion raises a unique Article
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`III standing issue and is the only remand motion that has been filed in any of the actions against
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`Clearview. Accordingly, Defendants did not believe the law supported a stay in that case before
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`the Court decides the threshold issue of subject-matter jurisdiction. As previously explained, if
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`the Court ultimately denies the motion to remand, Thornley should be consolidated with this action
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`and would therefore be subject to any stay entered in this consolidated action. ECF No. 98 at 2
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`n.1.
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`3
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`Also unavailing is Plaintiff’s argument that his supposed prejudice is “particularly acute,
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`2 Clearview’s voluntary steps also include implementing technical solutions to prevent the collection of data
`from Illinois. ECF No. 56 at 6-7.
`3
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` Similarly, Plaintiff argues that “the entry of a stay precludes Plaintiff from relating and consolidating” a
`recent BIPA class action against Macy’s that is pending before Judge Aspen. ECF No. 100 at 9; Carmean
`v. Macy’s Retail Holdings, Inc., No. 20-cv-4589 (N.D. Ill.). But a case involving a different plaintiff, a
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`5
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`Case: 1:20-cv-00512 Document #: 101 Filed: 08/28/20 Page 6 of 9 PageID #:1643
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`here, because the JPML is not likely to address Defendants’ motion until December 2020 – making
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`the stay quite lengthy.” ECF No. 100 at 8. As discussed above, the Panel may decide the MDL
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`Motion before December. And even if it does not, a stay of a few months in the context of a
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`complex class action is short, especially where, as here, a case is still in its infancy and discovery
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`has not yet started. Paul v. Aviva Life & Annuity Co., No. 09-1038, 2009 WL 2244766, at *1 (N.D.
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`Ill. July 27, 2009) (“[T]his case has only been pending for five months and discovery has yet to
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`begin. Accordingly, any potential prejudice appears to be minimal.”).
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`Plaintiff also argues that “Defendants’ contention that the pending preliminary
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`injunction motion creates a burden because it raises complicated issues ignores that the motion
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`had been fully briefed since May 2020.” ECF No. 100 at 9 (internal citations omitted). This
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`argument misses the point: Defendants demonstrated that staying a decision on the preliminary
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`injunction motion would “preserve judicial resources”—not party resources. ECF No. 98 at 5.
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`Indeed, as discussed in Defendants’ Motion to Stay, in similar circumstances, a court granted a
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`stay pending a JPML decision so the court would not “have to invest the time and resources in
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`understanding the technology at issue” to decide a pending motion for preliminary injunction. ECF
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`No. 98 at 5-6 (quoting Hertz Corp. v. Gator Corp., 250 F. Supp. 2d 421, 428 (D.N.J. 2003)).
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`Plaintiff also argues that BIPA “does not violate the First Amendment because it regulates conduct,
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`not content.” ECF No. 100 at 10. However, in Sorrell v. IMS Health, Inc., the Supreme Court
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`rejected the very contention that what was involved in the case was “conduct, not speech” since
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`“the creation and dissemination of information are speech within the meaning of the First
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`Amendment.” 564 U.S. 552, 570 (2011). Moreover, at the very least, Section 15(d) of BIPA
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`different defendant, and a different judge to which Defendants are not parties should not have any impact
`on the stay decision here. Moreover, given that the Carmean case is based on different facts, and raises
`different legal claims and issues of law, it would not be appropriate to designate that case as related and
`consolidate it with this action.
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`6
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`Case: 1:20-cv-00512 Document #: 101 Filed: 08/28/20 Page 7 of 9 PageID #:1644
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`plainly limits speech by providing that “[n]o private entity in possession of a biometric identifier
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`or biometric information may disclose, redisclose, or otherwise disseminate a person’s or a
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`customer’s biometric identifier or biometric information” unless certain conditions are satisfied.
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`740 ILCS 14/15(d). In any event, the parties’ disagreement related to constitutional considerations
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`and the reach of BIPA only highlights that these are complex legal and factual issues, and that a
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`stay pending the Panel’s decision would preserve judicial resources.
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`Finally, Plaintiff alternatively “seeks clarification as to whether the case is stayed in
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`whole or in part.” ECF No. 100 at 11. But the Court’s Order, which granted “defendants’ motion
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`to stay the proceedings,” clearly stays the case in its entirety. ECF No. 99.
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`CONCLUSION
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`For the foregoing reasons, Defendants respectfully request that the Court deny the Motion
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`to Reconsider.
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`7
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`Case: 1:20-cv-00512 Document #: 101 Filed: 08/28/20 Page 8 of 9 PageID #:1645
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`DATED: August 28, 2020
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`JENNER & BLOCK LLP
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`By:
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`/s/ Lee Wolosky
`Lee Wolosky (admitted pro hac vice)
`Andrew J. Lichtman (admitted pro hac vice)
`JENNER & BLOCK LLP
`919 Third Avenue
`New York, New York 10022-3908
`Phone: (212) 891-1600
`lwolosky@jenner.com
`alichtman@jenner.com
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`Howard S. Suskin
`David P. Saunders
`JENNER & BLOCK LLP
`353 North Clark Street
`Chicago, Illinois 60654
`Phone: (312) 222-9350
`hsuskin@jenner.com
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`dsaunders@jenner.com
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`Attorneys for Defendants Clearview AI, Inc.,
`Hoan Ton-That, and Richard Schwartz
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`8
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`Case: 1:20-cv-00512 Document #: 101 Filed: 08/28/20 Page 9 of 9 PageID #:1646
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`CERTIFICATE OF SERVICE
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`I certify that on August 28, 2020 I electronically filed the foregoing with the Clerk of Court
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`using the CM/ECF system, which will then send a Notice of Electronic Filing to all counsel of
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`record.
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`By: /s/ Lee Wolosky
` Lee Wolosky
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`9
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