In the News The National Law Journal

Calling Lawsuit ‘Bare Bones, ’7th Circuit Rejects Genetic Privacy Claims Over Acquisition

In this article for the The National Law Journal, partners Martin Roth, Alyssa Kalisky and Amelia Bailey were recognized for their recent appellate win for Blackstone Inc. against over whether Blackstone was in violation of the Illinois Genetic Information Privacy Act

The U.S. Court of Appeals for the Seventh Circuit upheld the dismissal of a “bare bones” class action against the asset management company Blackstone Inc. over its acquisition of in what appears to be a first-of-its-kind federal appellate decision interpreting when claims can be brought under an Illinois genetic privacy law. 
A three-judge panel found Monday that individuals who provided their DNA to failed to state a claim in their complaint alleging that Blackstone violated the Genetic Information Privacy Act when it bought the genealogy company. 
A section of the law states that no person or company “may disclose or be compelled to disclose” the identity of anyone who took a genetic test or their results in a way that identifies the person. Plaintiffs alleged that Blackstone compelled the disclosure of their genetic identities when it purchased in 2020. But the appeals court said the lawsuit’s facts didn’t back up that allegation. 
“The plaintiffs’ complaint was bare bones,” Judge Michael Scudder Jr. wrote for the Seventh Circuit. 
“All that the complaint alleged is that Blackstone, with its deep pockets, purchased Ancestry in a deal worth $4.7 billion,” Scudder added. “The plaintiffs focus on Blackstone’s wealth and invite us to infer that the firm somehow forced or pressured Ancestry to disclose protected information by virtue of its market power. But that inference is far too attenuated for us to credit based on the few facts alleged in the complaint.” 
While the law was enacted in 1998, the court said that there was a “dearth of Illinois precedent” examining its boundaries. 
U.S. District Judge David W. Dugan of the Southern District of Illinois dismissed the complaint last year, and the appeals court agreed that the fact an acquisition took place isn’t, by itself, enough to allege a violation of GIPA. 
“We cannot plausibly infer that a run-of-the-mill corporate acquisition, without more alleged about that transaction, results in a compulsory disclosure within the meaning of Section 30,” Scudder wrote. “The fact that the acquisition took the form of an all-stock purchase further cuts against the plaintiffs’ theory of liability. All we can say with certainty about Blackstone’s all-stock acquisition of Ancestry is that a change in ownership occurred—nothing more.” 
Representing Blackstone was a Kirkland & Ellis team comprised of partners Martin Roth, Alyssa Kalisky and Amelia Bailey. 
Kyle Shamberg, of Lynch Carpenter, argued for the plaintiffs. He declined to comment on the ruling. 
In a blog post Monday, Kristin Bryan of Squire Patton Boggs said the decision limits the circumstances under which claims could be brought under GIPA in the context of a corporate transaction, and is a win for defendants in future lawsuits alleging GIPA violations. 
“This case is a welcome win for the defense bar and sets forth clear limits for GIPA claims going forward,” Bryan wrote. “The decision is notable, as a contrary ruling adopting Plaintiff’s interpretation of the statute could have significantly expanded the scope of GIPA to include circumstances common to many corporate transactions.”
At least two other class actions were filed earlier this year alleging GIPA violations in Illinois. In one, job seekers who applied to Ford Motor Co. accused the automaker of illegally asking questions about family medical histories in applications. Amazon is facing a similar lawsuit. 
While GIPA claims aren’t too common, plaintiffs have been increasingly citing another landmark Illinois privacy law enacted in 2008: the Biometric Information Privacy Act, which requires consent from anyone whose biometric information is collected. The law permits private litigation from plaintiffs alleging violations of the statute. 
An Illinois Supreme Court ruling this year found that companies violate the law each time they misuse a person’s private information. The ruling could cost fast-food chain White Castle, which allegedly scanned employees’ fingerprints without their consent, billions of dollars. 
Scudder was joined in the opinion by Judges David Hamilton and Doris Pryor. 
The Seventh Circuit rendered its decision in Bridges and Cunningham v. Blackstone, No. 22-2486.