Seventh Circuit Delivers Major Win for Employers in BIPA Litigation

05.18.26

On April 1, 2026, the Seventh Circuit Court of Appeals ruled in Clay v. Union Pacific Railroad Company that the 2024 amendments to Illinois’s Biometric Information Privacy Act (BIPA) apply retroactively to all pending lawsuits.

In 2024, the Illinois General Assembly amended Section 20 of BIPA to clarify that damages should be evaluated on a per-person basis. The amendment limits recovery to one instance in cases involving multiple information collections where a private entity “obtains the same biometric identifier or biometric information from the same person using the same method of collection…” The amendment was the legislative response to the Illinois Supreme Court decision in Cothron v. White Castle Sys., Inc.

The Cothron Decision

In Corthron, the Illinois Supreme Court held that "a separate claim accrues under the Act each time a private entity scans or transmits an individual’s biometric identifier or information in violation of section 15(b) or 15(d).”

Notably, the Supreme Court acknowledged that allowing myltiple or repeated accruals of claims by one individual could result in "astronomical" damages awards and potentially "annihilative liabiity" for employers that was possibly unconstitutional. For example, White Castle estimates that if the plaintiff was successful and allowed to bring her claims on behalf of as many as 9,500 current and former White Castle employees, class-wide damages in her action may exceed $17 billion. 

While the 2024 amendment ostensibly addressed cases filed after its effective date, it was silent on the question of retroactive application to the estimated hundreds of cases pending as of the effective date of the amendment.

The Seventh Circuit's Retroactivity Analysis

As the Seventh Circuit recognized, the financial stakes in Clay were significant. The court noted that one plaintiff alleged approximately 1,500 fingerprint scans, which could have resulted in $7.5 million in statutory damages for that plaintiff alone if intentional violations were estabilished.

Crucial to the Seventh Circuit’s decision was its application of the Illinois law of retroactivity, which, as noted by the court, is “…well established allowing us to predict how the Supreme Court of Illinois would rule with a high degree of confidence.” To determine whether a statute applies retroactively, the Seventh Circuit found that Illinois courts apply a modified version of the federal test as established in Landgraf v. USI Film Products.

Under Illinois law, courts consider only whether the General Assembly expressly indicated the temporal reach of the amendment. If the amendment expressly states whether it applies retroactively or not, the plain text controls. If the amendment is silent on its temporal reach, the courts look to Section 4 of the Illinois Statute on Statutes for guidance, which contains an express savings clause: “proceedings … shall conform, so far as practicable, to the laws in force at the time of such proceeding.” 

Section 4 requires an inquiry as to whether the amendments constitute substantive or procedural changes in the law. A substantive amendment under Illinois law prescribes the rights, duties and obligations of parties, while a procedural amendment concerns the rules governing how rights and duties are enforced.

The Seventh Circuit concluded that because the amendment to BIPA Section 20 was remedial, it was therefore “procedural” under Illinois law — and courts should apply the amendment to cases pending at the time the statute was enacted.

Practical Impact for Employers

The Seventh Circuit's decision has significant practical implications for employers currently defending BIPA claims.

First, employers with cases filed before the August 2024 amendment may now invoke the per-person damages cap. This ruling eliminates the argument that the amendment only governs new cases filed after its effective date.

Second, the decision may dramatically reduce exposure in BIPA class actions by limiting damages that previously could have been calculated on a per-scan basis.

Finally, subject matter jurisdiction for cases filed in federal courts needs to be reviewed given the decision, as lower damages could affect whether cases meet the threshold jurisdictional amount for federal court.

Michael Lee Tignalia is a Member of Aronberg Goldgehn's Appellate Litigation, Banking and Finance, Business Litigation, and Employment Law practice groups. He has more than three decades of experience counseling clients on evolving legislation regulatory developments and complex litigation matters, helping businesses navigate operational risks, pending disputes and preventive strategies.