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An AI company harvested publicly available photographs from social media sites across the internet and then used those photographs to derive a biometric facial scan of each individual in the photograph. The company sold this database to law enforcement agencies to use in identifying persons of interest or unknown individuals. A woman sued in a class action, arguing that the harvesting of biometric data violated Illinois’ Biometric Information Privacy Act. The company removed the case to federal court, and the federal court ruled that the plaintiffs’ claims lacked standing under Article III. The appellate court agreed with the district court and affirmed, ordering that the case be remanded to state court.

Clearview AI is in the business of facial recognition tools. Users may download an application that gives them access to Clearview’s database. The database is built from a proprietary algorithm that scrapes pictures from social media sites such as Facebook, Twitter, Instagram, LinkedIn, and Venmo. The materials that it uses are all publicly available. Clearview’s software harvests from each scraped photograph the biometric facial scan and associated metadata, which it stores in its database. The database currently contains billions of entries.

Many of Clearview’s clients are law enforcement agencies. The clients primarily use the database to find out more about a person in a photograph, such as to identify an unknown person or confirm the identity of a person of interest. Users upload photographs to Clearview’s app, and Clearview creates a digital facial scan of the person in the photograph and then compares the new facial scan to those in its database. If the program finds a match, it returns a geotagged photograph to the user and informs the user of the source social-media site for the photograph.

In the wake of a New York Times article profiling Clearview, Melissa Thornley filed suit in Illinois state court under the Illinois Biometric Information Privacy Act (BIPA). BIPA provides robust protections for the biometric information of Illinois residents. Thornley’s complaint, filed on behalf of herself and a class, asserted violations of three subsections of BIPA. Clearview removed the case to federal court. Shortly after removal, Thornley voluntarily dismissed the action. Thornley then returned to the Circuit Court of Cook County in May 2020 with a new, significantly narrowed, action against Clearview. The new action alleged only a single violation of BIPA and defined a more modest class. Continue reading ›

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Pinterest is far from the first tech company to face allegations of gender discrimination, but it is the first to publicly announce that it will be paying more than $20 million to settle those allegations in a recent lawsuit involving a single plaintiff.

Françoise Brougher, the company’s former chief operations officer, sued the company in San Francisco Superior Court back in August, claiming she was paid less than her male peers, received feedback that was gender-biased, and was left out of meetings – all this despite the fact that she played a key role in driving revenue for the company.

Pinterest has reached a settlement agreement with Brougher and her attorneys in which Pinterest will pay them $20 million, and Pinterest and Brougher together will donate a total of $2.5 million to organizations that work to advance women and other minorities in tech. According to reports, the money is to be paid before the end of 2020.

The settlement did not include Pinterest admitting to having done anything wrong, and in fact, the company continues to insist it values diversity, equity, and inclusion in its workplace. Brougher even released a joint statement with Pinterest to that effect, claiming she’s encouraged by the company’s commitment to building a workplace culture that includes and supports all its employees. Continue reading ›

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A plastics company purchased ingredients from a producer of rubber products for many years under a series of short-term agreements. A few years after signing a long-term agreement, the rubber producer attempted to unilaterally raise the price of the products it was selling to the plastics company. When the plastics company protested that this was not allowed under the agreement, the rubber producer failed to make scheduled deliveries on time. The plastics company then sought an alternate source of rubber and sued the producer for the difference in cost it paid. The district court determined that the rubber company failed to adequately assure the plastics manufacturer of its ability to perform under the contract, and the plastics company was therefore entitled to seek supplies elsewhere and recoup damages. The appellate panel affirmed, finding that the plastic company’s actions were reasonable under the Uniform Commercial Code.

BRC Rubber & Plastics, Inc. designs and manufactures rubber and plastic products, primarily for the automotive industry. Continental Carbon Company manufactures carbon black, an ingredient in many rubber products. Before 2010, BRC bought all the carbon black it needed from Continental, though the two companies did not have a long term supply contract.

In 2009, BRC solicited bids from several suppliers of carbon black, seeking a long-term contract to ensure continuity of supply. Continental won the bidding, and in late 2009 the two companies signed a five-year contract to run to Dec. 31, 2014. Continental agreed to supply BRC with approximately 1.8 million pounds of prime furnace black annually in equal monthly quantities. The contract listed baseline prices for three types of carbon black which were to remain firm throughout the agreement. The contract also included instructions for calculating the feedstock price adjustment to account for fluctuations in the price of oil and gas. Continue reading ›

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Amazon claims it fired Chris Smalls, a management associate, in March for violating safety procedures by continuing to come to work after having been exposed to COVID-19, despite the fact that the company says it offered to pay him to stay home for 14 days after the exposure. Smalls, who is suing his former employer in the Eastern District of New York for discrimination and retaliation, tells a different story.

According to Smalls, Amazon failed to take several safety precautions related to the pandemic, including taking employees’ temperatures before allowing them on the premises; providing hand sanitizer or personal protective equipment, such as masks and gloves; enforcing social distancing; or making sure the facility was properly cleaned and sanitized between shifts.

In the complaint, Smalls said he felt a responsibility to bring his concerns to management. He alleges management did not care about the health or welfare of the employees working under him because they were largely Black, Latino, and/or immigrants whose recent entry into the country made them unlikely to speak up on their own behalf. When Smalls again met with Amazon management, this time with a group of workers that included white employees, he alleges management was significantly more receptive to their complaints. Continue reading ›

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Everyone knows who Sherlock Holmes is. Even if you haven’t read one of Sir Arthur Conan Doyle’s short stories featuring the famous detective, you’ve no doubt seen, or at least heard of, one of the many adaptations of Holmes and his adventures into other works of fiction, from other books and short stories, to movies and TV shows. He is known as the cold, calculating detective who sees clues everywhere, but is either incapable of taking into consideration the feelings of the people around him, or just lacks the patience to do so.

That is the Sherlock Holmes of the public domain, but later stories written by Doyle show a softer side – someone who has become more considerate in general, and more respectful towards women in particular. That version of the detective is not yet in the public domain, which forms the basis of a copyright lawsuit against Netflix, Nancy Springer, and Random House, among others.

The copyright lawsuit focused on Enola Holmes, a series of young adult books written by Springer, published by Random House, and adapted into a film starring Millie Bobby Brown that was released on Netflix in 2020. Enola is Sherlock’s younger sister and proves equally capable of solving mysteries. Both the books and the film portray a Sherlock (played by Henry Cavill in the film) who starts out dismissive of his younger sister, but gradually grows warmer towards her as she grows on him, and it is those latter characteristics that prompted the estate of Sir Arthur Conan Doyle to file their copyright lawsuit. Continue reading ›

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If you think you’d be better off leaving your job to start your own company that does the same thing as your employer, you’d better check the terms of your employment contract first. A swimming coach based in New Jersey, John Alaimo, worked for NYS Aquatics Inc. of Goshen, which has run the “New York Sharks” swim team since 2003. Although Alaimo renewed his contract with NYSA in the fall of 2019, less than a year later, in the summer of 2020, he started his own swimming company that likewise had a shark-themed name: Shark Swimming, LLC.

NYSA responded by suing Alaimo and two other swim coaches for breach of contract, citing both non-compete and non-solicitation clauses in their employment contracts.

A non-compete agreement states you cannot work for a competitor of your employer, usually within a certain geographic distance and a certain timeframe after your employment with them has ended. A non-solicitation agreement states you cannot solicit clients, vendors, or other employees of your employer to do business with your new employer. It’s also common to have a time limit on that requirement.

It’s unclear whether Alaimo’s non-compete and/or non-solicitation agreements were limited by time, but it doesn’t matter because Alaimo was still under contract with NYSA at the time that he founded his competing company. Continue reading ›

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An Illinois Appellate Court breathed new life into a petition by Chicago Bears legend Richard Dent to learn the identities of the anonymous individuals who he claims published defamatory statements about him. According to Dent’s Illinois Supreme Court Rule 224 petition, these defamatory statements ultimately cost Dent and his business a marketing contract with the energy supplier Constellation NewEnergy.

Dent played as a defensive end in the NFL from 1983-1997, including 12 seasons with the Chicago Bears. He was the MVP in the Bears’ 1985 Super Bowl victory, and was elected to the Pro Football Hall of Fame in 2011. Also named as a petitioner in the case was Dent’s company, RLD Resources, which Dent founded after his football career ended.

According to the petition, three unidentified people allegedly defamed Dent by accusing him of groping a woman and engaging in drunken behavior. These allegedly defamatory comments prompted an investigation by Constellation that ultimately caused the company to terminate its contractual arrangements with Dent.

The case dates back to September 2018 when two attorneys representing the energy supplier visited Dent’s office and told him that certain allegations had been made against him. Specifically, they allegedly told Dent, a female Constellation employee had accused Dent of making inappropriate sexual comments to her and groping her at two separate Constellation-sponsored events.

The attorneys also informed Dent that a man complained to Constellation that he had observed Dent at a hotel in Chicago collecting materials for a Constellation-sponsored event and that Dent was drunk and disorderly at that time. The attorneys refused to reveal the identities of these individuals but informed Dent that they would be reviewing the energy supplier’s contracts with Dent based on these allegations. In October 2018, Constellation sent Dent and his company a notice that it was terminating all contracts with them. Continue reading ›

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When a class action settles, class members generally have three options: (1) remain a part of the class, (2) opt-out of the settlement, or (3) object to the settlement. Many courts have bemoaned a perceived rise in the abuse of the third option by class members using a technique commonly referred to as “objector blackmail.” Objector blackmail involves class members filing frivolous objections to a class settlement, appealing decisions approving the settlement over such objections, and then seeking to obtain a side payment from the defendant in exchange for dismissal of their appeals. A recent Seventh Circuit opinion may spell the beginning of the end of this practice.

The issue of objector blackmail was front and center in the case of Pearson v. Target Corp. The plaintiffs in Pearson filed a putative class action alleging that the retailer Target, among others, made false claims about dietary supplements they manufactured and distributed. In March of 2013, the parties reached a settlement and asked the district court to approve it. After the first settlement was thrown out on appeal, the parties then reached a second settlement. Following the district court’s preliminary approval of the second settlement, three class members objected to the settlement. The objections ran the gamut from the number of class counsel’s fees to the failure of the defendants to admit liability under a statute they had not been accused of violating in the case. Continue reading ›

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After a non-profit discovered some alleged invoicing irregularities it sued its founders and former directors and the companies that submitted the allegedly fraudulent invoices. The trial court dismissed the complaint. An Illinois appellate court reversed the trial court’s dismissal with regard to several of the fraud claims but affirmed the lower court’s dismissal of the remaining claims.

In 2002, Nancy Morgan and Donna Sardina formed and incorporated the National Alliance of Wound Care (NAWCO), a non-profit corporation that provides education and credentials for medical personnel in wound injuries. At its founding, Morgan and Sardina were NAWCO’s sole directors but were not on NAWCO’s board of directors as of 2016 or anytime thereafter.

Soon after incorporating NAWCO, Morgan and Sardina established for-profit corporations, Wound Care Education Institute, Inc. (WCEI) and Wild about Wounds (WOW). WCEI is in the business of providing training and education to medical professionals regarding skin, wound and ostomy care and management. WCEI provides courses to assist healthcare workers in preparing for the national certification exams developed by NAWCO. WOW provides a national conference and trade show for health care professionals in the wound care field.

In 2016, Morgan sent NAWCO an invoice totaling $243,500 on behalf of WCEI for meeting room rentals. In 2017, Morgan sent NAWCO a series of invoices totaling $654,000 on behalf of WCEI for various services. NAWCO paid each invoice upon receipt.

In November 2018, NAWCO filed suit against Morgan, Sardina, WCI and WOW alleging breach of contract, breach of fiduciary duty, fraud, conversion, and conspiracy. In the complaint, NAWCO alleged that these invoices Morgan submitted on behalf of WCEI were fraudulent because they contained charges for work never performed by WCEI and/or work for which NAWCO had already paid WCEI. NAWCO also alleged that WOW submitted charges totaling $583,744.34 to NAWCO from 2006 to 2015, for expenses that were “not legitimate” because of “the utter lack of supporting documentation for these significant charges.” After various amendments and motions to dismiss, the court dismissed NAWCO’s claims for failure to state a claim.

On appeal the Court found that the complaint had stated a claim for fraud against the defendants and reversed the trial court’s dismissal of those claims. The court affirmed dismissal of the remaining claims. Continue reading ›

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After discussions about going public, Promega Corp., a privately-held biotech company based in Wisconsin, decided instead to remain a privately held company back in 2014 and tried to buy back the stock owned by its minority shareholders and regain a controlling interest in the company. Those minority shareholders claimed the price at which Promega wanted to buy back their shares was deeply discounted, and when they tried to negotiate for a higher price point, Promega allegedly refused, which ultimately led to the massive lawsuit between the company and its minority shareholders that dragged on for about five years.

The team of attorneys arguing the case for the minority shareholders was headed by James Southwick and Alex Kaplan, two partners of the Susman Godfrey law firm in Houston, Texas. They recently announced that the lawsuit settled for $300 million, a victory to which they attribute their months of research and preparation leading up to the trial, as well as their decision to stick to one main allegation: shareholder oppression.

Other attorneys might have argued that the defendants had breached their fiduciary duty to their shareholders, or they would have alternated between making the case for shareholder oppression, arguing breach of fiduciary duty, and making the case for other allegations throughout the course of the trial. Instead, Southwick and Kaplan decided their best bet was to argue that Promega had tried to oppress its shareholders and to continue to make that case throughout the month-long bench trial. It was an unusual strategy, but one that ultimately paid off. Continue reading ›

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