throbber
Case: 20-3249 Document: 47 Filed: 02/22/2021 Pages: 12
`
`No. 20-3249
`____________________________________________________________________________________________________________________
`
`IN THE UNITED STATES COURT OF APPEALS
`
`FOR THE SEVENTH CIRCUIT
`____________________________________________________________________________________________________________________
`
`
`
`MELISSA THORNLEY ET AL.,
`
`
`
`
`v.
`
`CLEARVIEW AI, INC.,
`
`
`
`Plaintiffs-Appellees,
`
`Defendant-Appellant.
`____________________________________________________________________________________________________________________
`
`On Appeal From The
`United States District Court For The
`Northern District Of Illinois, Eastern Division
`Case No. 20-cv-3843 – Hon. Sharon Johnson Coleman
`____________________________________________________________________________________________________________________
`
`CLEARVIEW AI, INC.’S MOTION TO STAY THE MANDATE
`PENDING THE FILING AND RESOLUTION OF A PETITION FOR A WRIT OF
`CERTIORARI
`____________________________________________________________________________________________________________________
`
`
`Clifford W. Berlow
` Counsel of Record
`David P. Saunders
`Howard S. Suskin
`JENNER & BLOCK LLP
`353 North Clark Street
`Chicago, Illinois 60654
`(312) 222-9350
`cberlow@jenner.com
`
`
`
`
`Lee Wolosky
`Andrew J. Lichtman
`JENNER & BLOCK LLP
`919 Third Avenue
`New York, New York 10022
`(212) 891-1600
`
`
`Floyd Abrams
`Joel Kurtzberg
`CAHILL GORDON & REINDEL LLP
`32 Old Slip
`New York, New York 10005
`(212) 701-3000
`
`Counsel for Defendant-Appellant
`
`

`

`Case: 20-3249 Document: 47 Filed: 02/22/2021 Pages: 12
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`
`
`Pursuant to Federal Rule of Appellate Procedure 41(d)(1), Defendant-
`
`Appellant Clearview AI, Inc. (“Clearview”) respectfully moves this Court to stay
`
`issuance of its mandate in this appeal pending the filing of a petition for a writ of
`
`certiorari in the Supreme Court and the petition’s ultimate resolution. The petition
`
`for certiorari will present substantial questions worthy of a grant of certiorari, and
`
`the balance of the equities favors a stay.
`
`This appeal is about whether a plaintiff who alleges that access to her
`
`biometric information was sold in violation of the Illinois Biometric Information
`
`Privacy Act (“BIPA”) necessarily alleges an injury-in-fact for purposes of Article III
`
`standing. This implicates an open, unsettled question under Spokeo, Inc. v. Robins,
`
`136 S. Ct. 1540 (2016), meriting Supreme Court review. As Judge Hamilton noted in
`
`his concurring opinion, the criteria for determining when an alleged statutory
`
`violation necessarily alleges a concrete, particularized harm sufficient for purposes of
`
`establishing Article III standing is in need of clarification from the Supreme Court,
`
`as lower courts have struggled to identify consistent rules or standards. Further,
`
`staying the mandate will prevent potentially wasteful state court litigation should
`
`certiorari be granted.
`
`BACKGROUND
`
`Plaintiffs’ Allegations. Plaintiffs filed a putative class action complaint in
`
`Illinois state court alleging that Clearview had engaged in the “unlawful collection,
`
`capture, use, and storage of Plaintiffs’ biometric data” in violation of Sections 15(a),
`
`15(b), and 15(c) of BIPA. Class Action Complaint, Thornley v. Clearview AI, Inc., No.
`
`20-cv-02916 (N.D. Ill.), ECF No. 1-1. Shortly before Clearview sought to remove that
`
`
`
`1
`
`

`

`Case: 20-3249 Document: 47 Filed: 02/22/2021 Pages: 12
`
`
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`complaint to federal court, this Court held in Bryant v. Compass Group USA, Inc.,
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`958 F.3d 617 (7th Cir. 2020), that removal of a complaint alleging violations of Section
`
`15(b) was appropriate because claims under Section 15(b) necessarily allege an
`
`injury-in-fact. Six days after removal, Plaintiffs voluntarily dismissed their
`
`complaint. Notice of Voluntary Dismissal, Thornley, No. 20-cv-02916, ECF No. 13.
`
`Days later, Plaintiffs filed a second putative class action complaint, again in Illinois
`
`state court. Dkt. 17 at SA9–22 (“Compl.”). The new complaint was largely identical
`
`to the first one, but now pleaded only one claim under Section 15(c). Id. ¶ 34. Plaintiffs
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`also went from seeking to certify a class of all Illinois residents in Clearview’s
`
`database to a class composed of those “who suffered no injury from Defendant’s
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`violation of Section 15(c).” Id. ¶ 25.
`
`Proceedings Below. Clearview again removed to federal court. Dkt. 17 at SA1–
`
`7. Plaintiffs then moved to remand. Motion to Remand, Thornley v. Clearview AI,
`
`Inc., No. 20-cv-3843 (N.D. Ill.), ECF No. 27. Plaintiffs conceded the requirements for
`
`removal under the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d)(2), were
`
`satisfied, but argued they did not “satisfy the injury-in-fact requirement of Article
`
`III.” Mot. to Remand at 1. The district court granted the motion to remand, agreeing
`
`that the complaint did not allege an injury-in-fact because Plaintiffs had “purposely
`
`narrowed their claim by … specifically stating … that the class members did not
`
`suffer any injury under § 15(c) ‘other than statutory aggrievement.’” Dkt. 16 at A3.
`
`The Panel’s Ruling. This Court granted Clearview permission to appeal
`
`pursuant to CAFA, 28 U.S.C. § 1453(c)(1). The Panel went on to affirm the district
`
`
`
`2
`
`

`

`Case: 20-3249 Document: 47 Filed: 02/22/2021 Pages: 12
`
`
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`court’s remand order for two reasons. First, emphasizing that “allegations matter,”
`
`the Panel highlighted that Plaintiffs had not expressly alleged they would suffer a
`
`concrete and particularized harm from the alleged statutory violation. See Slip Op.
`
`9, 12 (identifying allegations potentially demonstrating a concrete and particularized
`
`injury). Second, the Panel held that violations of Section 15(c) do not necessarily
`
`cause concrete and particularized harms sufficient to give rise to Article III standing.
`
`In the Panel’s view, Section 15(c) “addresses only the regulated entity—the collector
`
`or holder of the biometric data—and flatly prohibits for-profit transactions,” and thus
`
`is “the same kind of general regulation as the duty to create and publish a retention
`
`and destruction schedule found in section 15(a).” Id. 12–13.
`
`In a concurring opinion, Judge Hamilton noted that this case was part of a
`
`slate of “recent decisions by this court,” which do not yield “a consistently predictable
`
`rule or standard.” Id. 18 (Hamilton, J., concurring). After noting that the only
`
`example Spokeo provided of an alleged statutory violation that did not satisfy Article
`
`III “was utterly trivial: an incorrect zip code in the information about a debtor under
`
`the Fair Credit Reporting Act,” Judge Hamilton asserted that “several of our recent
`
`opinions take Spokeo too far,” including by being “too quick[] [to] invoke[] Spokeo to
`
`deny concrete injury even in cases alleging core substantive violations.” Id. 19–20.
`
`Petition for Rehearing or Rehearing En Banc. On January 27, 2021, Clearview
`
`filed a petition for rehearing and rehearing en banc. Dkt. 44. On February 16, 2021,
`
`the Court denied the petition. Dkt. 46. Barring a stay, the mandate will issue on
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`February 23, 2021.
`
`
`
`3
`
`

`

`Case: 20-3249 Document: 47 Filed: 02/22/2021 Pages: 12
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`
`
`DISCUSSION
`
`Where appropriate, this Court is empowered to stay the issuance of its
`
`mandate pending the disposition of a petition for a writ of certiorari. 28 U.S.C.
`
`§ 2101(f). A motion for a stay pending the disposition of a petition for a writ of
`
`certiorari should be granted when “the petition would present a substantial question
`
`and … there is good cause for a stay.” Fed. R. App. P. 41(d)(1). Both criteria are
`
`satisfied here.
`
`I.
`
`This Case Raises a Substantial Question Warranting Supreme Court Review.
`
`As Federal Rule of Appellate Procedure 41(d)(1) requires, the certiorari
`
`petition in this case “would present a substantial question.” Id. The petition will raise
`
`the question of when, under Spokeo, a statutory violation necessarily gives rise to a
`
`concrete and particularized injury-in-fact to establish Article III standing. This is a
`
`substantial, open question worthy of Supreme Court review. Indeed, the Court has
`
`noted that Spokeo is far from clear on this point. See Slip Op. 18–19 (Hamilton, J.,
`
`concurring).
`
`The Supreme Court in Spokeo resolved that the violation of some rights
`
`“granted by statute can be sufficient … to constitute injury in fact,” such that a
`
`plaintiff “need not allege any additional harm beyond the one [the legislature] has
`
`identified.” Spokeo, 136 S. Ct. at 1549. But the Court provided few clues as to how to
`
`distinguish between statutory violations that necessarily give rise to concrete and
`
`particularized injuries and those that do not. As a result, lower courts have taken
`
`varying approaches to this inquiry since Spokeo.
`
`
`
`4
`
`

`

`Case: 20-3249 Document: 47 Filed: 02/22/2021 Pages: 12
`
`
`
`Indeed, Judge Hamilton expressed his “hope” that “the Supreme Court will
`
`revisit the problem of standing in private actions based on intangible injuries under
`
`a host of federal consumer-protection statutes.” Slip. Op. 20. Judge Hamilton’s
`
`concurrence raises the specter that the Seventh Circuit’s recent opinions “take
`
`Spokeo too far” in that they “do not give sufficient weight to Spokeo’s endorsement of
`
`standing where Congress has chosen to provide procedural and informational rights
`
`to reduce the risk of more substantive harm for consumers and others, and has
`
`created private rights of action to enforce them.” Id. 19–20. This is an issue that the
`
`Supreme Court must address, and ultimately could address if it grants Clearview’s
`
`petition.
`
`The confusion over how to interpret Spokeo is not limited to the Seventh
`
`Circuit. The analysis courts apply in determining whether a statutory violation
`
`necessarily gives rise to a concrete and particularized injury-in-fact varies across
`
`different circuits. For example, the Ninth Circuit has held that where there are
`
`“procedural violations of [a statute] that would not invariably injure a concrete
`
`interest,” a plaintiff must “plead additional harm to obtain standing.” Eichenberger
`
`v. ESPN, Inc., 876 F.3d 979, 982–83 (9th Cir. 2017). But a plaintiff “need not allege
`
`any further harm to have standing” where the plaintiff has alleged violation of a
`
`statute that “identifies a substantive right to privacy that suffers any time” it is
`
`violated. Id. at 983–84; accord Campbell v. Facebook, Inc., 951 F.3d 1106, 1119 (9th
`
`Cir. 2020); Ramirez v. TransUnion LLC, 951 F.3d 1008, 1027 (9th Cir. 2020). This
`
`conflicts with Seventh Circuit precedent explicitly rejecting a distinction between
`
`
`
`5
`
`

`

`Case: 20-3249 Document: 47 Filed: 02/22/2021 Pages: 12
`
`
`
`substantive and procedural violations. Larkin v. Fin. Sys. of Green Bay, Inc., 982 F.3d
`
`1060, 1066 (7th Cir. 2020).
`
`There are still other approaches. Some courts have given weight to the
`
`legislature’s decision to create a statutory protection with a private right of action.
`
`E.g. In re Horizon Healthcare Servs. Inc. Data Breach Litig., 846 F.3d 625, 639 (3d
`
`Cir. 2017) (holding that in the Fair Credit Reporting Act, “Congress established that
`
`the unauthorized dissemination of personal information by a credit reporting agency
`
`causes an injury in and of itself—whether or not the disclosure of that information
`
`increased the risk of identity theft or some other future harm.”). Other courts have
`
`emphasized history, relying on Spokeo’s admonition to “consider whether an alleged
`
`intangible harm has a close relationship to a harm that has traditionally been
`
`regarded as providing a basis for a lawsuit in English or American courts.” 136 S. Ct.
`
`at 1549; e.g. Krakauer v. Dish Network, L.L.C., 925 F.3d 643, 654 (4th Cir. 2019)
`
`(holding that telephone calls made in violation of the Telephone Consumer Protection
`
`Act necessarily gave rise to an injury-in-fact because “[o]ur legal traditions … have
`
`long protected privacy interests in the home,” and “[i]ntrusions upon personal privacy
`
`were recognized in tort law and redressable through private litigation,” including
`
`“intrusions made via phone calls.”).
`
`The variety of approaches to applying Spokeo demonstrates that Supreme
`
`Court review of the issue to be raised in Clearview’s petition would be appropriate.
`
`What is more, the Supreme Court already has recognized that this area of law is in
`
`need of clarification. Currently pending before the Supreme Court is Trans Union
`
`
`
`6
`
`

`

`Case: 20-3249 Document: 47 Filed: 02/22/2021 Pages: 12
`
`
`
`LLC v. Ramirez (No. 20-297) (set for argument Mar. 30, 2021), where the question
`
`presented is “[w]hether either Article III or Rule 23 permits a damages class action
`
`where the vast majority of the class suffered no actual injury, let alone an injury
`
`anything like what the class representative suffered.” The Supreme Court’s decision
`
`in Trans Union may well bear on the questions raised in Clearview’s petition—
`
`indeed, it is not at all hard to imagine that the Court’s decision in Trans Union may
`
`include language that would lead the Court to grant, vacate, and remand this matter
`
`on certiorari review.
`
`Given the unsettled state of the law, as well as the potential significance of the
`
`pending Trans Union decision, it is plain that a petition from Clearview would
`
`present a “substantial question” worthy of Supreme Court review. See Fed. R. App.
`
`P. 41(d)(1).
`
`II.
`
`Good Cause Exists for a Stay.
`
`Here, a stay is necessary to prevent undue hardship and wasted resources.
`
`Without a stay, this case will be remanded to state court, and the parties will spend
`
`months litigating the matter in that forum. But if the Supreme Court grants
`
`Clearview’s petition and reverses the remand order, then this case will proceed in
`
`federal court, and Clearview will have been subject to proceedings before and rulings
`
`by a judge who ultimately does not have jurisdiction over either Clearview or the
`
`claims presented in this case. Under those circumstances, the time the parties would
`
`have spent litigating in state court will have been a waste. It would be a waste of both
`
`party and judicial resources to force Clearview to proceed in a court that may not
`
`have jurisdiction when those proceedings may well prove to be unnecessary. The costs
`
`
`
`7
`
`

`

`Case: 20-3249 Document: 47 Filed: 02/22/2021 Pages: 12
`
`
`
`and time Clearview will be forced to spend on a potentially unnecessary litigation
`
`represent irreparable harm warranting a stay. See U.S. ex rel. Chandler v. Cook
`
`Cnty., 282 F.3d 448, 451 (7th Cir. 2002) (granting a stay due to the injury movant
`
`“could suffer if it is required to prepare for trial before the Supreme Court takes
`
`action”).
`
`In contrast, there is no significant prejudice to Plaintiffs if this case is stayed
`
`pending a Supreme Court decision. As the Court well knows, Plaintiffs have carefully
`
`crafted their complaint to allege that they are not suffering any ongoing harm as a
`
`result of Clearview’s conduct. Slip. Op. 10–11, 15. That leaves only the possibility
`
`that Plaintiffs could argue that they will be prejudiced if they are forced to wait to
`
`commence litigation in state court. But this Court has resolved that “the prejudice
`
`that comes with any delay in a judicial proceeding” alone does not warrant denial of
`
`a stay. Chandler, 282 F.3d at 451; cf. Cabinetree of Wis., Inc. v. Kraftmaid Cabinetry,
`
`Inc., 50 F.3d 388, 391 (7th Cir. 1995) (“Nor is delay automatically a source of
`
`prejudice.”). Accordingly, there is good cause for a stay.
`
`CONCLUSION
`
`For the foregoing reasons, Clearview AI, Inc. respectfully asks this Court to
`
`stay issuance of its mandate pending the resolution of Clearview’s petition for a writ
`
`of certiorari to the Supreme Court of the United States in this case.
`
`
`
`
`
`8
`
`

`

`Case: 20-3249 Document: 47 Filed: 02/22/2021 Pages: 12
`
`
`
`Dated: February 22, 2021
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Lee Wolosky
`Andrew J. Lichtman
`JENNER & BLOCK LLP
`919 Third Avenue
`New York, New York 10022
`(212) 891-1600
`lwolosky@jenner.com
`alichtman@jenner.com
`
`
`
`
`
`
`
`Respectfully submitted,
`
`/s/ Clifford W. Berlow_____________
`
`Clifford W. Berlow
` Counsel of Record
`David P. Saunders
`Howard S. Suskin
`JENNER & BLOCK LLP
`353 North Clark Street
`Chicago, Illinois 60654
`(312) 222-9350
`cberlow@jenner.com
`dsaunders@jenner.com
`hsuskin@jenner.com
`
`
`Floyd Abrams
`Joel Kurtzberg
`CAHILL GORDON & REINDEL LLP
`32 Old Slip
`New York, New York 10005
`(212) 701-3000
`fabrams@cahill.com
`jkurtzberg@cahill.com
`
`Counsel for Defendant-Appellant
`Clearview AI, Inc.
`
`
`
`
`9
`
`

`

`Case: 20-3249 Document: 47 Filed: 02/22/2021 Pages: 12
`
`
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`CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME LIMITATION
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`1.
`
`This motion complies with the word limitation of Rule 27(d)(2) of the
`
`Federal Rules of Appellate Procedure because, according to the word count function
`
`of Microsoft Word 2016, this motion contains 2140 words.
`
`2.
`
`This motion complies with the typeface requirements of Fed. R. App. P.
`
`32(a)(5) and Circuit Rule 32 and the typestyle requirements of Fed. R. App. P. 32(a)(6)
`
`because this brief has been prepared in a proportionally spaced typeface using
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`Microsoft Office Word 2016 in 12 point Century Expanded LT Std font for the main
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`text and footnotes.
`
`Dated: February 22, 2021
`
`
`
`/s/ Clifford W. Berlow
`Clifford W. Berlow
`
`
`
`
`
`
`
`
`
`
`
`

`

`Case: 20-3249 Document: 47 Filed: 02/22/2021 Pages: 12
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`
`
`CERTIFICATE OF SERVICE
`
`I, Clifford W. Berlow, an attorney, hereby certify that on February 22, 2021, I
`
`caused the foregoing motion to be electronically filed with the Clerk of the Court for
`
`the United States Court of Appeals for the Seventh Circuit by using the CM/ECF
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`system. I certify that all participants in this case are registered CM/ECF users and
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`that service will be accomplished by the CM/ECF system.
`
`/s/ Clifford W. Berlow
` Clifford W. Berlow
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`

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