Seventh Circuit Ruling on BIPA Could Slash Business Liabilities
The Seventh Circuit ruled BIPA's damages cap amendment retroactive, affecting compliance strategies.
Why it matters: Industries using biometric data, like retail and healthcare, must reassess risks and liability management.
- The ruling makes the BIPA amendment retroactive, capping damages per person retroactively.
- Seventh Circuit resolves district court splits, impacting ongoing BIPA-related litigations.
- Judge Brennan affirms the amendment as procedural, thus retroactive.
- Rulings affect cases like Union Pacific, potentially reducing $7.5M in liabilities.
On April 1, 2026, the Seventh Circuit ruled in Clay et al. v. Union Pacific Railroad Co. that the amendment to Illinois' Biometric Information Privacy Act (BIPA), enacted on August 2, 2024, applies retroactively. This amendment changes damage calculations from per-violation to per-person, which can substantially decrease financial liabilities for businesses handling biometric data.
Previously, district courts were divided: Judge Bucklo in the Gregg case supported retroactivity, while Judge Alexakis in Schwartz did not. The Seventh Circuit's decision now creates clarity and uniformity across federal courts.
Chief Judge Michael Brennan noted that the amendment regards procedures, not new liabilities, thus it is retroactive under Illinois law. This ruling notably impacts cases like Union Pacific, where retroactivity could reduce a $7.5 million exposure due to 1,500 biometric claims by Plaintiffs.
Businesses from retail to healthcare, which utilize biometric systems, need to update their compliance strategies in light of these legal clarifications, potentially reducing their exposure in ongoing and future BIPA litigations.
By the numbers:
- $7.5 million — Potential liability reduction for Union Pacific under the amended BIPA.
- 1,500 — Number of claims involved in the Union Pacific case.
Yes, but: The ruling relies on future confirmation of the amendment's validity under state law.
What's next: Ongoing BIPA cases may have settlements renegotiated based on this retroactive ruling.