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Biometric privacy lawsuit involving car rental can proceed

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Mitex

An arbitration agreement that a car rental customer signed does not apply to a company that collected his biometric data, a federal district court ruled.

The ruling in Johsua Johnson et al. v. Mitek Systems Inc. involved a putative class action charging violation of the Illinois Biometric Information Privacy Act.

Joshua Johnson registered with car rental company HyreCar Inc., a client of biometric verification services company Mitek Systems Inc., according to Wednesday’s ruling by the U.S. District Court in Chicago.

After signing up on HyreCar’s app using his email address, Mr. Johnson was redirected to a page where he was required to upload his driver’s license and photograph, according to the ruling. San Diego-based Mitek used its facial-recognition technology to verify his age and identity.

Mr. Johnson signed an arbitration agreement with Los Angeles-based HyreCar when he rented his car under which he agreed to arbitrate all disagreements with the car rental company.

After Mr. Johnson filed a putative class action in district court charging HyreCar with violating BIPA, which restricts the gathering of biometric information, Mitek filed a motion to compel arbitration based on the arbitration agreement.

The court refused the motion. According to Mitek, it is a beneficiary of the arbitration agreement because it “receives money from HyreCar for performing services that are necessary to the contractual relationship” between HyreCar and its customers, the ruling said.

“The Court is unpersuaded,” the decision said.  If HyreCar “intended Mitek to be included in the parties to whom the arbitration provision applies, it could easily have stated so expressly. It did not,” the court said in denying Mitek’s motion.

Attorneys in the case had no comment or did not respond to a request for comment.

Last week, another U.S. District Court in Chicago ruled that a plaintiff can proceed with his putative class-action litigation against another facial recognition software company that he alleged violated BIPA.