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Saturday, May 4, 2024

Club Fitness employees who settled BIPA action for $750K can’t also recover damages from time keeper, Paycor argues

Federal Court

EAST ST. LOUIS – Kellin Johns, who led a successful class action against Club Fitness for invading the privacy of fingerprints, proposes to lead one against the maker of the club’s timekeeping device. 

Device maker Paycor has moved to dismiss the action, arguing that Johns can’t recover damages from different defendants for the same conduct. 

Johns argues that Club Fitness and Paycor committed distinct violations of Illinois biometric privacy law. 

The dispute remains open before U.S. District Judge David Dugan. 

Johns sued Club Fitness in Madison County circuit court in 2018, claiming it disseminated data without consent or written releases. 

He alleged Club Fitness failed to inform employees in writing of the purpose or the length of time for its collection and storage of data. He also claimed it failed to develop a publicly available retention schedule or guidelines for permanent destruction. 

Chief Judge Dave Hylla assigned Dugan, a circuit judge at the time. 

Johns moved for substitution and Dugan granted it. 

Any party in an Illinois court can substitute a judge once without cause if the judge hasn’t made a substantive decision. 

Hylla assigned circuit judge William Mudge, who later replaced Hylla as chief and assigned circuit judge Sarah Smith. 

Last January, with that action pending, Johns sued Paycor in Madison County. 

Paycor removed the action to district court in March, claiming the amount in controversy exceeded a $5 million limit on class actions in state courts.

In May, Johns and Club Fitness advised Smith that they settled. 

Smith granted preliminary approval of a $750,000 settlement in July and granted final approval on Oct. 14. 

It provided $249,750 for five lawyers, $10,000 for Johns, $9,663 for settlement administrator Rust Consulting, and $1,872.36 in costs. 

That left $478,714.64 for distribution among 592 class members. 

On Oct. 29, in district court, Johns added Juan Barron as second plaintiff in an amended complaint. 

Paycor counsel Matthew Wolfe of Chicago moved to dismiss it on Nov. 12, writing that it “never suggests why Paycor, who neither employed plaintiffs nor operated the devices, should be liable for what was done with them after they were sold.” 

He wrote that the claims were at odds with those in the Club Fitness action, “in which plaintiffs both recovered for the identical claims they raise here.” 

He wrote that Johns pleaded in the Club Fitness action that Paycor didn’t possess his data and that Club Fitness enrolled employees in a Club Fitness database. 

“Plaintiffs cannot have it both ways,” Wolfe wrote.

 “They cannot claim that their employers collected and possessed their biometric data by requiring them to scan their fingers as a condition of employment, but at the same time claim that the exact same action, the scan by their employers, magically transforms Paycor into a collector and possessor of their data in a different lawsuit. 

“Plaintiffs here claim that Paycor improperly discloses plaintiffs’ data to Paycor’s clients, plaintiffs’ employers.” 

He wrote that Johns alleged in the Club Fitness action that employers directly collected and possessed the data.  

He wrote that John and Barron failed to explain why Paycor would disclose data to the employers when the employers already collected it. 

In response on Dec. 17, plaintiff attorney Ryan Stephan of Chicago wrote that Paycor actively collects and manages data through hardware and software. 

He wrote that other courts have ruled that plaintiffs can maintain privacy cases against third party vendors. 

He wrote that nothing prevents Paycor from obtaining consent and that it could place a notice on devices to indicate consent by clicking a button. 

He wrote that allegations in the Club Fitness action reveal why Johns has claims against both Paycor and Club Fitness.

Stephan represents Johns and Barron in association with Catherine Mitchell, James Zouras, and Megan Shannon of Chicago. Brandon Wise of St. Louis acts as local counsel. 

In reply on Dec. 31, Wolfe wrote that the allegations against Paycor “directly conflict with previous claims for which plaintiffs have already recovered.” 

“Plaintiffs should not be permitted to allege such contradictory factual positions across different actions and the court should prevent them from doing so,” he wrote. 

Dugan has set bench trial in July. 

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