EAST ST. LOUIS - Hartford Casualty seeks a declaration that it doesn’t have to defend a potential class action alleging that Customized Distribution Services invaded biometric privacy of job applicants at its former location in Edwardsville.
Hartford sued the New Jersey logistics company at U.S. district court on June 20, claiming it didn’t provide timely notice of the claim and its policy excluded coverage.
On the same date Magistrate Judge Reona Daly of Benton dismissed a motion of Customized Distribution Services to dismiss the underlying case.
The plaintiff in that case, Steven Newbern of Belleville, sued Customized Distribution Services at Madison County circuit court on Oct. 26.
His counsel Andrew Heldut and Jordan Frysinger of Chicago moved to certify a class seeking damages under state law on privacy of genetic information.
They claimed Customized Distribution Services solicited information on manifestation of disease or disorder in family members.
On Oct. 27 Chief Circuit Judge Stephen Stobbs assigned Circuit Judge Sarah Smith.
On Nov. 1 she set a class certification hearing for Dec. 1.
Newbern didn’t serve the complaint on Customized Distribution Services until Nov. 7.
On Nov. 28 his counsel moved to continue the hearing to Jan. 18.
On Dec. 7 Customized Distribution Services removed Newbern’s suit to district court.
Its counsel Rebecca Christensen of St. Louis claimed the amount in controversy exceeded a $5 million limit on class actions in state courts.
She claimed possible damages of $15,000 for each of 1,726 employees Customized Distribution Services hired in six years would amount to $25,890,000.
Heldut amended Newbern’s complaint on Jan. 31 to allege violation of biometric privacy rather than genetic privacy.
He claimed Customized Distribution Services collected fingerprints or handprints without explaining their purpose and obtaining releases.
On Feb. 4, after three months of steady action in two courts, Customized Distribution Services tendered the claim to Hartford for defense and indemnity.
That action came too late, Hartford counsel Michael Duffy and Michael O’Malley of Chicago argued in their complaint for declaratory judgment.
They claimed coverage for data breach requires a report within 30 days. They also claimed eight provisions in the policy excluded coverage of Newbern’s action.
They claimed one of the provisions excluded injury arising out of violation of a right of privacy created by any state or federal act.
They claimed the policy’s definition of damages didn’t include fines, penalties or sanctions.
“To the extent the sums sought in the Underlying Action are fines, penalties, or sanctions, coverage is not afforded,” they wrote.
Customized Distribution Services operates out of New Jersey.
Its Edwardsville facility occupied a spot on the flood plain in Gateway Commerce Center.
A map on the corporate website shows no business there and a Google map flags the location as permanently closed.