MDL Court Allows Most Claims Against Macy’s to Proceed in Clearview AI Data Privacy Case

A decision made last Friday upheld most of the fifteen causes of action lodged against retailer Macy’s Inc. over its alleged use of Clearview AI’s biometric database to identify people whose images appeared in retail store surveillance footage. The complaint contends that the retailer purchased then used Clearview’s database more than 6,000 times to search for biometric matches.

At the heart of the multidistrict litigation proceeding in Chicago is the plaintiffs’ Illinois Biometric Information Privacy Act (BIPA) allegations against Clearview. Principally, the plaintiffs argue that the company “covertly scraped billions of photographs of facial images from the internet and then used artificial intelligence algorithms to scan the face geometry of each individual depicted in the photographs to harvest the individuals’ unique biometric identifiers and corresponding biometric information.”

In last week’s 12-page opinion, Judge Sharon Johnson Coleman granted Macy’s motion as to the California Unfair Competition Law (UCL) and the New York common law-based unjust enrichment claims, but allowed the others to proceed.

The court’s analysis first turned to the defendant’s contention that the plaintiffs failed to allege a concrete and particularized injury-in-fact sufficient to confer standing. Judge Coleman ruled that the plaintiffs sufficiently pleaded BIPA allegations causing them concrete harm in the form of violations of their biometric data privacy interests.

“Likewise, plaintiffs have sufficiently stated a concrete injury-in-fact under BIPA 15(c) by alleging that Macy’s profited from using the Clearview database to prevent losses and improve customer experience, and, that as a result of Macy’s use, plaintiffs’ biometric information was compromised,” the opinion said before declining Macy’s Rule 12(b)(6) arguments for similar reasons.

However, the court agreed with the retailer that the plaintiffs failed to allege economic injury with regard to their UCL claim. Relying on Northern District of California cases, Judge Coleman opined that the disclosure of personal information alone does not give rise to monetary or property loss sufficient to establish UCL standing unless the plaintiff provides specific allegations concerning the value of the lost information.

By contrast, the court concluded that the plaintiffs had standing to pursue their California law right to publicity claim for the state subclass. The court found the claim viable because the plaintiffs assert that Macy’s used their photographs and likeness without authorization or compensation for commercial gain in connection with its loss prevention goals.

Interestingly, right to publicity claims have become a hot topic in biometric information cases, such as a lawsuit against over the scraping of photographs from school yearbooks transposed into digital records that correspond to and identify individuals. The Ninth Circuit is set to weigh in on whether the trial court correctly dismissed the case for failure to satisfy the injury-in-fact element of the Article III standing requirement.

Another case proceeding in the District of Nevada has been stayed pending the outcome of that appeal, as an opinion from the appellate tribunal might dictate the case’s future.

In the Clearview MDL, the plaintiffs are represented by lead counsel Loevy & Lovey and also Bursor & Fisher P.A., Hedin Hall LLP, and Neighborhood Legal LLC. Macy’s is represented by Taft Stettinius & Hollister LLP.