Thakkar v. Proctoru, Inc.

• Docket Number: Case No. 2:21-cv-01565-NAD
• Decision Date: 22 November 2022
• Citation: 642 F.Supp.3d 1304
• Parties: Rutvik THAKKAR, et al., Plaintiffs, v. PROCTORU, INC., Defendant.
• Court: U.S. District Court — Northern District of Alabama

642 F.Supp.3d 1304

Rutvik THAKKAR, et al., Plaintiffs, v. PROCTORU, INC., Defendant.

Case No. 2:21-cv-01565-NAD

United States District Court, N.D. Alabama, Southern Division

Signed November 22, 2022

Max Stuart Roberts, Pro Hac Vice, Alec M. Leslie, Pro Hac Vice, Bursor & Fisher PA, New York, NY, Christopher Reid Reilly, Bursor & Fisher PA, Miami, FL, Ike Gulas, The Ike Gulas Law Firm, Birmingham, AL, Carl Vincent Malmstrom, Wolf Haldenstein Adler Freeman & Herz LLC, Chicago, IL, for Plaintiffs.

Thomas Julian Butler, Lee E. Bains, Jr., Caleb Collins Wolanek, Michal Erin Crowder, Starr Turner Drum, Maynard Cooper & Gale PC, Birmingham, AL, for Defendant.

MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT'S MOTION TO DISMISS BASED ON CHOICE OF LAW

NICHOLAS A. DANELLA, UNITED STATES MAGISTRATE JUDGE

For the reasons stated below and on the record in the May 24, 2022 motion hearing, DefendantProctorU, Inc.'s motion to dismiss(Doc. 21), as supplemented on choice-of-law grounds, is GRANTED.

INTRODUCTION

PlaintiffsRutvik Thakkar, William Gonigam, and Andrea Kohlenberg initiated this action against Defendant ProctorU in the United States District Court for the Central District of Illinois, alleging two claims for relief under the Illinois Biometric Information Privacy Act (BIPA).SeeDoc. 18(amended complaint).After the Central District of Illinois transferred the case to this district (based on a contractual forum-selection clause), ProctorU argued that a contractual choice-of-law provision bars Plaintiffs' BIPA claims.

Because Plaintiffs' BIPA claims fall within the scope of that choice-of-law provision, and because that choice-of-law provision is enforceable according to Alabama choice-of-law rules (which do not apply a Restatement§§ 187-188 balancing analysis to a provision such as this), Alabama substantive law applies, and Plaintiffs cannot state an Illinois state-law BIPA claim upon which relief can be granted.

BACKGROUND

A.Procedural background

1.Plaintiffs' BIPA claims

On March 12, 2021, Plaintiffs filed this action in the Central District of Illinois, alleging two BIPA claims against ProctorU. Doc. 1.On May 20, 2021, Plaintiffs filed an amended complaint that also alleges two BIPA claims against ProctorU. Doc. 18.

BIPA is an Illinois state statute that requires a private entity that possesses an individual's biometric information to establish "a retention schedule and guidelines for permanently destroying biometric identifiers and biometric information when the initial purpose for collecting or obtaining such identifiers or information has been satisfied or within 3 years of the individual's last interaction with the private entity, whichever occurs first."740 Ill. Comp. Stat. 14/15(a).BIPA also prohibits a private entity from "collect[ing], captur[ing], purchas[ing], receiv[ing] through trade, or otherwise obtain[ing] a person's or a customer's biometric identifier or biometric information," unless the entity first informs the person "in writing of the specific purpose and length of term for which a biometric identifier or biometric information is being collected, stored, and used."740 Ill. Comp. Stat. 14/15(b)(2).

Plaintiffs allege that ProctorU violated both "§§ 15(a)and15(b) of BIPA," when it "collected, stored and used—without first publishing sufficiently specific data retention and deletion policies—the biometrics of hundreds or thousands of students who used [ProctorU's] software to take online exams."Doc. 18at 2-3.As noted above, Plaintiffs' amended complaint includes two claims for relief under BIPA.First, Plaintiffs allege that ProctorU violated § 15(a) of BIPA when it failed to create, publish, and adhere to a retention schedule providing for permanent deletion of biometric information.Doc. 18at 17-18.In particular, Plaintiffs allege that, "[i]n direct violation of § 15(a) of BIPA, from at least approximately March 2020 through present, [ProctorU] did not have written, publicly available policies identifying its retention schedules or guidelines, and has continued to retain the biometrics beyond the intended purpose for collection."Doc. 18at 10.Second, Plaintiffs allege that ProctorU violated § 15(b)(2) of BIPA when it failed to obtain proper consent from Plaintiffs before capturing, storing, and/or using Plaintiffs' biometric identifiers and biometric information.Doc. 18at 18-21.In this regard, Plaintiffs allege that, "[i]n direct violation of BIPA § 15(b)(2), from at least approximately March 2020 through present, [ProctorU] never informed Illinois students who had their facial geometry collected of the length of time for which their biometric identifiers or information would be collected, stored and used."Doc. 18at 10.

2.ProctorU's motion to dismiss and motion to transfer venue(Central District of Illinois)

On June 3, 2021, ProctorU filed the pending motion to dismiss in the Central District of Illinois.Doc. 21.As filed, ProctorU's motion argued for dismissal pursuant to Federal Rule of Civil Procedure 12(b)(2) because ProctorU is not subject to personal jurisdiction in Illinois, and for dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6) because Plaintiffs' amended complaint failed to state a claim upon which relief can be granted.Doc. 21at 1.

On June 7, 2021, ProctorU also filed a motion to transfer venue.Doc. 23.Both of those motions were fully briefed in the Central District of Illinois.SeeDoc. 22;Doc. 24;Doc. 29;Doc. 30;Doc. 37;Doc. 38.¹Plaintiffs also filed two notices of supplemental authority in opposition to ProctorU's motion to dismiss.SeeDoc. 34;Doc. 35.

On November 23, 2021, the Central District of Illinois granted ProctorU's motion to transfer venue, transferred the case to this district, and reserved ruling on the motion to dismiss for this district.Doc. 36at 1.

In granting ProctorU's motion to transfer venue, the Central District of Illinois ruled that ProctorU's "Terms of Service" contained a valid and enforceable forum-selection clause to which Plaintiffs had agreed.Doc. 36at 23.Consequently, the Central District of Illinois directed the clerk to "transfer this case to the U.S. District Court for the Northern District of Alabama," and ordered that a ruling on ProctorU's motion to dismiss(Doc. 21) was "reserved pending transfer to the Northern District of Alabama."Doc. 36at 23-24.

3.The choice-of-law issues (this court)

After the case was transferred to this district, the case was assigned to the undersigned.Doc. 40.Pursuant to 28 U.S.C. § 636(c)andFederal Rule of Civil Procedure 73, the parties consented to magistrate judge jurisdiction.Doc. 48.

On January 19, 2022, the court held a telephone status conference, during which counsel for ProctorU raised choice-of-law grounds as additional support for the pending motion to dismiss.SeeDoc. 51; Minute Entry (Entered: 01/19/2022).

Consequently, the court ordered supplemental briefing on the choice-of-law issues discussed during that conference.Doc. 52.The choice-of-law issues were fully briefed in this court, including a second round of (optional) supplemental briefing on certain Alabama Supreme Court decisions.Doc. 55;Doc. 58;Doc. 61;Doc. 64;Doc. 65.Plaintiffs also filed two notices of supplemental authority on the choice-of-law issues.Doc. 59;Doc. 60.

On May 24, 2022, the court held a motion hearing on the choice-of-law issues.SeeDoc. 62; Minute Entry (Entered: 05/24/2022).

This court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1332(d) because Plaintiffs have alleged that "there are more than 100 class members and the aggregate amount in controversy exceeds $5,000,000, exclusive of interest, fees, and costs, and at least one Class member is a citizen of a state different from Defendant."Doc. 18at 3.

B.Factual background

1.Plaintiffs and ProctorU

Plaintiffs are students, domiciled in Illinois, who used ProctorU while taking online examinations.Doc. 18at 3, 10-14.

ProctorU is a Delaware corporation with its principal place of business in Birmingham, Alabama.Doc. 1at 5.

ProctorU develops, owns, and operates an online proctoring software that provides remote proctoring services.Doc. 18at 1;Doc. 22at 3-4.ProctorU monitors exams over the internet, and can be accessed and used throughout the United States and internationally.Doc. 22at 2-3."One of the ways in which ProctorU monitors students is by collecting and monitoring their facial geometry."Doc. 18at 6.ProctorU uses the collected biometric information "to create an identity profile for students and to confirm students' identities during testing so as to prevent cheating."Doc. 18at 8.

2.ProctorU's Privacy Policy and Terms of Service, including the forum-selection clause and the choice-of-law provision

Privacy Policy.Plaintiffs allege that ProctorU's Privacy Policy describes its " 'policies and procedures for the collection, receipt, use, storage, sharing, transfer, disclosure, and other processing of personal information through [ProctorU's] websites, browser extensions, platforms, and applications.' "Doc. 18at 10(quoting Privacy Policy);seeDoc. 21-1at 15.Plaintiffs allege that, according to ProctorU's "Privacy Policy, '[d]uring testing . . . [ProctorU][would] obtain IP address information to help troubleshoot issues and verify [users'] testing location.' "Doc. 18at 4(quoting Privacy Policy)(emphasis omitted);seeDoc. 21-1at 16.Plaintiffs also allege that ProctorU's Privacy Policy states as follows: " 'We require you to share your photo ID on camera and we use that ID in conjunction with biometric facial recognition software to authenticate your identity.We also require you to perform a biometric keystroke measurement for some exams.' "Doc. 18at 6(quoting Privacy Policy);seeDoc. 21-1at 15.Plaintiffs allege further that ProctorU's Privacy Policy states that, " '[d]uring testing, we automatically track your keystroke pattern to ensure it...