Appeals Court Rejects Clearview's Attempt To Dodge A State Lawsuit By Trying To Make It A Federal Case
from the yeah...-it's-a-little-weird dept
Clearview’s attempt to dodge a potential class-action lawsuit filed against it in Illinois has just been booted back to the Illinois court system by the Seventh Circuit Court of Appeals.
The plaintiffs claimed Clearview’s scraping of publicly available photos, location data, and other information from a variety of websites and social media platforms violated the state’s law, which requires companies to obtain permission from people before harvesting and selling access to this data.
This same law netted a $550 million settlement from Facebook for its preemptive tagging of people in photos, something a court found to be a violation the law passed by the state in 2008. This settlement appeared to rattle Clearview, which filed documents with the court stating it would no longer do business in Illinois or knowingly collect biometric information from Illinois residents.
This lawsuit continues, however, thanks to the Seventh Circuit. In a somewhat novel move, the plaintiffs argued they do not have standing to pursue this lawsuit in federal court. Clearview argued otherwise, hoping to establish enough standing to take the lawsuit federal, at which point it would agree the plaintiffs did not have enough standing to move the case forward.
It’s not often plaintiffs argue against their own standing, but the plaintiffs want this case in a state court, where they can pursue Clearview for violation of state laws. The only federal hook is Clearview’s existence as a Delaware corporation headquartered in New York. State courts will normally allow lawsuits like these to be moved to federal court because the plaintiffs and defendant aren’t located in the same state.
The district court, however, agreed with the plaintiffs: they did not allege any federal harms or anything else that would make the case better served at the federal level. The opening of the Seventh Circuit’s opinion [PDF] highlights the bizarre nature of this appeal:
Oddly, [plaintiff Melissa] Thornley insists that she lacks standing, and it is the defendant, Clearview AI, Inc., that is championing her right to sue in federal court. That peculiar line-up exists for reasons that only a civil procedure buff could love: the case started out in an Illinois state court, but Clearview removed it to federal court. Thornley wants to return to state court to litigate the BIPA claims, but Clearview prefers a federal forum. The case may stay in federal court, however, only if the more stringent federal standards for standing can be satisfied; Illinois (as is its right) has a more liberal attitude toward the kinds of cases its courts are authorized to entertain. The district court held that Thornley has alleged only a bare statutory violation, not the kind of concrete and particularized harm that would support standing, and thus ordered the action remanded to the state court.
The court notes this reversal of roles has led to an equally unusual appeal. Normally, plaintiffs argue in favor of their standing to sue. In this case, the plaintiffs are arguing against this because it runs contrary to their interests and in favor of Clearview’s. After examining far more precedent than one would imagine would be on hand, the Appeals Court says the case must exit the federal court system and return to Illinois.
The Appeals Court says the plaintiffs are free to craft their allegations as narrowly as they’d like. And as much as Clearview would like to be accused of even greater violations to (briefly) take the case federal for an easier dismissal, it’s not up to the courts to tell plaintiffs how to craft their arguments or shuffle things from state to federal just because something a federal court could handle could plausibly be alleged.
[Thornley] does not contest either the existence of minimal diversity (she is a citizen of Illinois, and Clearview is a citizen of Delaware and New York) or the fact that more than $5,000,000 is at stake. Instead, she has simply offered a class definition that is narrower than it might have been. We have no reason to believe that the district court, acting on its own initiative, would certify a different and broader class; to that extent, the rule that the plaintiff controls her own case applies. And unlike the situation in Standard Fire, people who fall outside Thornley’s class definition are totally unaffected by this litigation. If they wish to sue Clearview, either alone or under a class definition that includes an allegation of injury, they are free to do so. Indeed, as we noted earlier, there are a number of class actions pending against Clearview, many of which appear to be broader than this one. We know of nothing that would prevent a putative class representative from taking a conservative approach to class definition. And if the plaintiffs change their tune in the state court, Clearview will be able to attempt to remove again to federal court, though we do not predict the outcome of such an effort.
Clearview’s counterintuitive attempt to make a federal mountain out of the plaintiff’s state molehill fails. The case remains in the state court system and limited to a specific violation of state law. Clearview will still have to defend itself against these claims.