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Seventh Circuit Rules BIPA Damages Cap Applies to Pending Cases

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Why it matters

On April 1, 2026, the U.S. Court of Appeals for the Seventh Circuit issued a consolidated decision in Clay v. Union Pacific Railroad Co. holding that Illinois' August 2024 amendment to the Biometric Information Privacy Act applies retroactively to all pending cases. The amendment, enacted as SB 2979, caps statutory damages at one recovery per person per biometric collection method—eliminating the "per-scan" liability model that had exposed defendants to exponentially higher exposure. The court reversed three unanimous district court decisions from the Northern District of Illinois that had ruled the amendment applied only to future claims.

The Seventh Circuit classified the amendment as a remedial procedural change rather than a substantive modification to BIPA's compliance requirements. This distinction proved decisive: under Illinois retroactivity doctrine, procedural changes apply to pending litigation, while substantive ones do not. The district courts had reached the opposite conclusion, treating the damages cap as substantive and therefore prospective only. The amendment left Section 15 (substantive compliance obligations) untouched while modifying only Section 20 (damages calculations).

The decision reshapes the damages landscape for hundreds of pending BIPA cases across Illinois. Prior to the amendment, the White Castle decision had established per-scan liability, allowing plaintiffs to recover statutory damages for each unauthorized biometric scan—a framework that generated what defendants characterized as exorbitant exposure in class actions and individual suits. The retroactive application substantially reduces case valuations and settlement demands for employers facing active litigation. Attorneys defending BIPA claims should reassess damages exposure in pending matters and consider whether the retroactive ruling affects settlement posture or class certification strategy.

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