JEROME TREADWELL, individually, and on behalf of all others similarly situated, Plaintiff, v. POWER SOLUTIONS INTERNATIONAL, INC., Defendant.
Case No. 18 C 8212
IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION
Hon. Jorge L. Alonso
December 16, 2019
Defendant Power Solutions International, Inc. (“PSI”) moves to dismiss Plaintiff Jerome Treadwell’s Amended Complaint pursuant to
BACKGROUND
Treadwell filed a putative class action against his employer PSI, alleging that PSI’s use of a fingerprint timekeeping system violates the Illinois Biometric Information Privacy Act (“BIPA”). (See generally Am. Cmplt., ECF No. 43.) PSI is a company that manufactures and distributes industrial engines and power systems. (See id. at ¶ 1.) Treadwell was hired by PSI in April 2018 to work as a production assembler and is still employed in that role. (See id. at ¶ 39.) Treadwell alleges that when PSI hires its employees, PSI requires the employees to scan their fingerprints into a database operated by NOVAtime Technology, Inc. (“NOVAtime”), a company that provides equipment to track employees’ work hours.1 (See id. at ¶¶ 2-3.) Treadwell was
BIPA imposes certain restrictions on how private entities like PSI collect, retain, use, disclose, and destroy “biometric identifiers” and “biometric information.” See generally
Treadwell alleges that PSI has violated and continues to violate BIPA by: (1) failing to inform him and other PSI employees in writing of the specific purpose and length of time for which their fingerprints are being collected and used; (2) failing to obtain a written release from him and other PSI employees before collecting their fingerprints; (3) failing to provide a publicly available retention schedule and guidelines for permanently deleting PSI employees’ fingerprints; and (4)
PSI moved to dismiss Treadwell’s amended complaint, and the parties have fully briefed the motion. The Court also permitted Treadwell to submit a steady stream of supplemental authority, and PSI had the opportunity to respond to this supplemental authority. (See ECF Nos. 63, 69, 81, 82, 86, 88, 94, 98, 99, and 100.)
LEGAL STANDARD
“A motion under Rule 12(b)(6) tests whether the complaint states a claim on which relief may be granted.” Richards v. Mitcheff, 696 F.3d 635, 637 (7th Cir. 2012). Under
DISCUSSION
PSI moves to dismiss Treadwell’s Amended Complaint on two grounds. First, PSI argues that Treadwell’s claims for monetary damages under BIPA are preempted by the exclusive remedy provision in the Illinois Workers’ Compensation Act (“IWCA”). (See Memo. in Support of Mot. to Dismiss, ECF No. 50, at 6-11.) Alternatively, PSI argues that Treadwell’s BIPA claims are subject to either a one-year or two-year statute of limitations and that any possible claim outside these time limitations must be barred. (See id. at 11-20.) The Court handles each argument in turn.
Both PSI’s arguments require interpretation and application of Illinois law. The Court notes that, although enacted in 2008, BIPA has only somewhat recently become a source of litigation. The Illinois Supreme Court has only issued one opinion relating to BIPA, and that opinion does not address either issue presented by PSI’s motion. See generally Rosenbach v. Six Flags Entm’t Corp., 129 N.E.3d 1197 (Ill. 2019) (resolving statutory standing issue). Consequently, “[a]s a federal court sitting in diversity jurisdiction, [the Court’s] task is to predict how the Illinois Supreme Court would decide the issues presented here…Where the Illinois Supreme Court has not ruled on an issue, decisions of the Illinois Appellate Court control, unless there are persuasive indications that the Illinois Supreme Court would decide the issue differently.” Nationwide Agribusiness Ins. Co. v. Dugan, 810 F.3d 446, 450 (7th Cir. 2015) (citations omitted).
I. Illinois Workers’ Compensation Act
PSI argues that the IWCA preempts Treadwell’s claims for statutory damages. Preemption is an affirmative defense. Baylay v. Etihad Airways P.J.S.C., 881 F.3d 1032, 1039 (7th Cir. 2018). A plaintiff need not plead around an affirmative defense, so for purposes of a
The IWCA “is designed to provide financial protection to workers for accidental injuries arising out of and in the course of employment.” Meerbrey v. Marshall Field & Co., Inc., 564 N.E.2d 1222, 1226 (Ill. 1990). The IWCA contains an “exclusive remedy provision” in which “the Act imposes liability without fault upon the employer and, in return, prohibits common law suits by employees against the employer.” Id. (explaining provision was intended as an equitable “quid pro quo” between employers and employees). Sections 5(a) and 11 together constitute this exclusive remedy provision. Section 5(a) provides:
[N]o common law or statutory right to recover damages from the employer . . . for injury or death sustained by any employee while engaged in the line of his duty. . . other than the compensation provided herein, is available to any employee who is covered by . . . this Act
[T]he compensation herein provided [in the IWCA] . . . shall be the measure of the responsibility of any employer . . . for accidental injuries sustained by any employee arising out of and in the course of the employment
To escape the exclusive remedy provision’s preemptive effect, an employee must ultimately prove that his/her injury: (1) was not accidental; (2) did not arise from his or her
PSI argues that Treadwell’s amended complaint clearly shows that the IWCA’s exclusive remedy preempts his statutory damages claims and that Treadwell fails to show any of the four exceptions apply. (See ECF No. 50 at 6-11; see also Reply in Support of Mot. to Dismiss, ECF No. 67 at 1-13.) As PSI points out in its reply, Treadwell apparently concedes that the second and third exceptions do not apply, i.e., that Treadwell’s injury did “arise from his employment” and was “received during the course of employment.” (ECF No. 67 at 13.) However, Treadwell argues that the first and fourth exceptions apply, i.e., his injury was not “accidental” and is not “compensable” within the meaning of the IWCA. (ECF No. 57 at 5-9.) PSI replies that applying IWCA’s plain language and relevant Illinois case law leaves no choice but to find the exclusive remedy provision applies here.
A. Accidental Injury
At this stage, the Court finds that Plaintiff pleads facts showing that the injury is not accidental and thus, is not preempted by the IWCA. As PSI points out, the Illinois Supreme Court has held that “the term ‘accident’ is not ‘a technical legal term but encompasses anything that happens without design or an event which is unforeseen by the person to whom it happens.’” Pathfinder Co. v. Indus. Comm’n, 343 N.E.2d 913, 917 (Ill. 1976) (quoting Int’l Harvester Co. v. Indus. Comm’n, 305 N.E.2d 529, 532 (Ill. 1973)). In refining this “accident” inquiry in the context of intentional torts, the Illinois Supreme Court has held that an employee “must allege that the [employer] acted deliberately with specific intent to injure the [employee].” Copass v. Illinois Power Co., 569 N.E.2d 1211, 1216 (Ill. App. 4th Dist. 1991) (rejecting lower standard of intent
PSI first argues that Treadwell fails to allege facts showing PSI’s “specific intent” to produce the harm that Treadwell suffered because Treadwell only alleges a “series of omissions” (i.e., PSI’s failure to obtain employee consent, PSI’s failure to establish a retention schedule, etc.), and omissions “are the antithesis of an intentional act.” The Court disagrees with PSI’s characterization of the pleadings. Treadwell clearly alleges that PSI intended to collect and use its employees’ fingerprints as part of its biometric timekeeping system, and that PSI did not comply with BIPA’s notice requirements. (ECF No. 49 at ¶¶ 29-32, 34-35, 40-45.) This, in and of itself, is an injury, according to Rosenbach. 129 N.E.3d at 1206 (“When a private entity fails to adhere to the [BIPA] statutory procedures . . . the right of the individual to maintain his or her biometric privacy vanishes into this air . . . This is no mere ‘technicality.’ The injury is real and significant.”) (emphasis added).2 So, keeping in mind that PSI “is presumed to know the law,” Treadwell has alleged that PSI intended to collect and use employee biometric information without complying with BIPA’s requirements, i.e., that PSI intended to injure its employees. See Jones v. Bd. of Educ. of City of Chicago, 996 N.E.2d 1093, 1099 (Ill. App. Ct. 2013) (noting “it has long been the law that everyone is presumed to know the law”); see also Ohio Nat’l Life Assurance Corp. v. Davis, No. 10 C 2386, 2014 WL 5420057, at *4 (N.D. Ill. Oct. 24, 2014) (quoting Jerman v. Carlisle, McNellie, Rini, Kramer & Urlich, LPA, 559 U.S. 573, 582-83 (2010) (“Our law is . . . no stranger to the possibility that an act may be ‘intentional’ for purposes of civil liability, even if the actor lacked actual knowledge that her conduct violated the law.”)). As such, this alleged injury is not accidental.
Moreover, in its reply, PSI argues that any injuries here were accidental because they were “unforeseen by the person to whom it happen[ed].” (See ECF No. 67 at 11-12) (quoting Pathfinder, 343 N.E.2d at 917). The Court has found nothing in Illinois case law that suggests a plaintiff is required to prove that he/she foresaw the injury to render it non-accidental. The language quoted by PSI is likely guidance on what might constitute an accident rather than a rigid element to apply. See Pathfinder, 343 N.E.2d at 917 (explaining an accident “encompasses anything that happens without design or an event which is unforeseen by the person to whom it happens”). Indeed, rigidly
B. Compensability
The parties spent considerable time in their briefs on the fourth exception to the IWCA’s exclusive remedy provision, i.e., whether Treadwell can show his alleged injuries are not “compensable” under the Act. Meerbrey, 139 Ill.2d at 463. PSI argues that the plain language of the IWCA and Illinois case law makes clear that an injury is deemed “compensable” if it “arose out of or in the course of employment.” (ECF No. 67 at 6) (quoting Folta v. Ferro Eng‘g, 2015 IL 118070, ¶ 18). As such, PSI essentially argues that this fourth exception is a combination and restatement of the second and third exceptions. Treadwell, on the other hand, interprets the fourth exception to mean that only physical or psychological injuries are compensable under the Act, and Treadwell alleges that his injuries are neither physical nor psychological. (ECF No. 57 at 5-8.)
In Folta, the Illinois Supreme Court noted it had “limited opportunity” to explain the fourth exception and attempted to provide some clarity in determining whether the plaintiff’s
PSI correctly points out that the plain language of the IWCA imposes no explicit requirement that an injury must by physical or psychological to be covered, but decisions like Folta suggest that compensability refers to the type of harm an employee suffers. For example, Section 8 of the Act provides for amounts of compensation an employee can recover for nonfatal injuries, and it appears Treadwell would not be able to recover anything for his alleged injuries. See generally
Based on the foregoing reasons and on the fact that PSI fails to cite a single case where the IWCA preempted injuries like the ones Treadwell allegedly suffered, the Court believes it likely the Illinois Supreme Court would find Treadwell’s injuries are not the “type of injury [that] categorically fits within the purview of the Act” and are thus not “compensable.” Folta, 43 N.E. 3d at 114. If the Illinois Supreme Court were to hold otherwise, such a ruling would be a novel
II. Statute of Limitations
In the alternative, PSI argues that all potential claims by PSI employees that accrued prior to the applicable statute of limitations should be dismissed with prejudice. PSI correctly points out that BIPA does not include an explicit statute of limitations. PSI argues that the one-year statute of limitations for defamation and privacy claims should govern BIPA claims, and if not a one-year period, then the two-year statute of limitations for statutory penalty or negligence claims should apply. See
Despite the time the parties spent briefing these issues, they do not explain why these issues should be decided on a motion to dismiss. Like IWCA preemption, the statute of limitations is an affirmative defense. Again, a plaintiff “need not anticipate and attempt to plead around defenses,” and as such, dismissal here should only be granted where the complaint “plainly reveal[s] that the action is untimely under the governing statute of limitations.” Mongolian House, Inc., 770 F.3d at 613-14 (quotations and citations omitted); see also Collins v. Vill. of Palatine, 875 F.3d 839, 842 (7th Cir. 2017) (noting same in context of class action).
At this stage, the only class member identified is Treadwell. Treadwell began working for PSI in April 2018, and he filed this suit in October 2018. (See ECF No. 43 at ¶ 39; see also ECF No. 1-1.) Thus, no matter what limitations period and accrual date applies here, Treadwell’s claims are clearly timely. Even assuming the Court applies a one-year statute of limitations and finds Treadwell’s claims accrued at the date of his hire, he filed well within the statute of limitations. No other class member has yet been identified, nor is there anything in the pleadings suggesting how long PSI employed its biometric timekeeping system. As such, there is no indication that any potential class member would fall outside PSI’s proposed cutoff of October 30, 2017. Put another way, Treadwell has not “plead[ed] himself out of court by alleging (and thus admitting) the ingredients” of a statute of limitations defense. Mongolian House, Inc., 770 F.3d at 613-14. In light of the circumstances, the Court views these issues as entirely hypothetical and therefore denies PSI’s motion to dismiss claims based on statute of limitations at this time. The parties may raise the issue again, as appropriate, at the class certification or summary judgment stage.
HON. JORGE ALONSO
United States District Judge