Jennifer Miller v. Southwest Airlines Company ( 2019 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 18-3476
JENNIFER MILLER, SCOTT POOLE, and KEVIN ENGLUND,
Plaintiffs-Appellants,
v.
SOUTHWEST AIRLINES CO.,
Defendant-Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 18 C 86 — Marvin E. Aspen, Judge.
____________________
No. 19-1785
DAVID JOHNSON, individually and on behalf of a class,
Plaintiff-Appellee,
v.
UNITED AIRLINES, INC., and UNITED CONTINENTAL HOLDINGS,
INC.,
Defendants-Appellants.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 17 C 08858 — Virginia M. Kendall, Judge.
2 Nos. 18-3476 & 19-1785
____________________
ARGUED MAY 28, 2019 — DECIDED JUNE 13, 2019
____________________
Before WOOD, Chief Judge, and BAUER and EASTERBROOK,
Circuit Judges.
EASTERBROOK, Circuit Judge. We have consolidated two
appeals that pose a common question: whether persons who
contend that air carriers have violated state law by using bi-
ometric identification in the workplace must present these
contentions to an adjustment board under the Railway Labor
Act (RLA), 45 U.S.C. §§ 151–88, which applies to air carriers
as well as railroads. 45 U.S.C. §181. The answer is yes if the
contentions amount to a “minor dispute”—that is, a dispute
about the interpretation or application of a collective bar-
gaining agreement. 45 U.S.C. §§ 151a, 184; Hawaiian Airlines,
Inc. v. Norris, 512 U.S. 246, 252–53 (1994). Plaintiffs insist that
a judge should resolve their contentions, while defendants
contend that resolution belongs to an adjustment board.
The claims in each suit arise under the Biometric Infor-
mation Privacy Act (BIPA), 740 ILCS 14/5 to 14/25, which Il-
linois adopted in 2008. This law applies to all biometric iden-
tifiers, which the statute defines to include fingerprints. 740
ILCS 14/10. Before obtaining any fingerprint, a “private enti-
ty” must inform the subject or “the subject’s legally author-
ized representative” in writing about several things, such as
the purpose of collecting the data and how long they will be
kept, and obtain the consent of the subject or authorized rep-
resentative. 740 ILCS 14/15(b). The private entity also must
establish and make available to the public a protocol for re-
Nos. 18-3476 & 19-1785 3
taining and handling biometric data, which must be de-
stroyed “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 en-
tity, whichever occurs first.” 740 ILCS 14/15(a). Sales of bio-
metric information are forbidden, 740 ILCS 14/15(c), and
transfers are limited, 740 ILCS 14/15(d). Private entities must
protect biometric information from disclosure. 740 ILCS
14/15(e).
Both Southwest Airlines and United Airlines maintain
timekeeping systems that require workers to clock in and
out with their fingerprints. Plaintiffs contend that the air car-
riers implemented these systems without their consent,
failed to publish protocols, and use third-party vendors to
implement the systems, which plaintiffs call a forbidden dis-
closure. Southwest and United contend that the plaintiffs’
unions have consented—either expressly or through the col-
lective bargaining agreements’ management-rights clauses—
and that any required notice has been provided to the un-
ions. The air carriers insist that, to the extent these maoers
are disputed, an adjustment board rather than a judge must
resolve the difference—and that if state law gives workers
rights beyond those provided by federal law and collective
bargaining agreements, it is preempted by the Railway La-
bor Act.
The suits were assigned to different district judges.
Judge Aspen found that the plaintiffs have standing un-
der Article III but dismissed the suit against Southwest Air-
lines for improper venue. Fed. R. Civ. P. 12(b)(3). 2018 U.S.
Dist. LEXIS 143369 (N.D. Ill. Aug. 23, 2018). He made clear,
however, that the suit did not belong in state court or some
4 Nos. 18-3476 & 19-1785
other federal district court; he held, rather, that it belongs to
an adjustment board under the Railway Labor Act and that
any aoempt by Illinois to give workers rights to bypass their
union (Transportation Workers Union Local 555) and deal
directly with an air carrier is preempted by federal law. Thus
dismissal has nothing to do with venue. See 28 U.S.C. §1391.
Dismissal should have been labeled either as a judgment
on the pleadings, Fed. R. Civ. P. 12(c), or a dismissal for lack
of subject-maoer jurisdiction, as this circuit’s decisions sug-
gest. See, e.g., Carlson v. CSX Transportation, Inc., 758 F.3d
819, 824–25 (7th Cir. 2014); Brotherhood of Maintenance of Way
Employees v. Norfolk Southern Ry., 745 F.3d 808 (7th Cir. 2014);
Brown v. Illinois Central R.R., 254 F.3d 654 (7th Cir. 2001). But
see, e.g., Oakey v. U.S. Airways Pilots Disability Plan, 723 F.3d
227 (D.C. Cir. 2013) (need to resolve a dispute under the
Railway Labor Act’s procedures does not imply lack of sub-
ject-maoer jurisdiction); Emswiler v. CSX Transportation, Inc.,
691 F.3d 782 (6th Cir. 2012) (same). None of this circuit’s de-
cisions considers the effect of the Supreme Court’s modern
understanding of the difference between “jurisdiction” and
other kinds of rules. See Fort Bend County v. Davis, No. 18–
525 (U.S. June 3, 2019) (discussing the difference); Carlson,
758 F.3d at 831 (recognizing that this court has yet to consid-
er how the distinction applies to the Railway Labor Act). It is
unnecessary to do so here, for either a substantive or a juris-
dictional label ends the litigation between these parties and
forecloses its continuation in any other judicial forum.
The suit against United Airlines was filed in state court
and removed to federal court on two theories: federal-
question jurisdiction under the Railway Labor Act plus re-
moval jurisdiction under 28 U.S.C. §1453, part of the Class
Nos. 18-3476 & 19-1785 5
Action Fairness Act (CAFA). Judge Kendall concluded that
the subject is in the bailiwick of plaintiffs’ union (Interna-
tional Association of Machinists and Aerospace Workers)
and an adjustment board; this aspect of her decision reaches
the same conclusion as Judge Aspen. But Judge Kendall
added that the complaint did not present a case or contro-
versy, because the class asserted only a bare procedural
right. This led her to dismiss for lack of jurisdiction. 2018
U.S. Dist. LEXIS 127959 (N.D. Ill. July 31, 2018).
The class, which wants to litigate in state court, protested,
observing that if there is no federal jurisdiction then the suit
must be remanded. 28 U.S.C. §1447(c). Judge Kendall
agreed. United also complained about the initial decision.
Observing that the jurisdictional question had not been
raised or briefed by the parties, United maintained that
plaintiffs have standing because they allege (or at least im-
ply) that biometric data had been transmioed outside United
and may have reached inappropriate hands. Judge Kendall
refused to revisit that subject, however, and entered an order
returning the case to state court. 2019 U.S. Dist. LEXIS 43484
(N.D. Ill. Mar. 18, 2019).
The remand of a suit removed under the Class Action
Fairness Act is appealable with judicial permission, 28 U.S.C.
§1453(c)(1), and United asked us to accept its appeal. The
statute makes appellate authority turn on removal under the
Class Action Fairness Act, not on whether the appeal pre-
sents an issue about the interpretation of that statute. This,
plus the disparate outcomes of the two suits, led us to accept
the appeal even on the assumption that the only issues con-
cern the interaction between Illinois law and the Railway
Labor Act. (That assumption may be incorrect. We’ll return
6 Nos. 18-3476 & 19-1785
to the question how the Class Action Fairness Act applies to
the removal of the suit against United.)
Subject-maoer jurisdiction is the first issue in any case,
and as far as we can see the two suits are identical in this re-
spect. Judge Aspen found that fingerprinted workers have
standing, but Judge Kendall thought that a violation of the
state statute does not cause concrete injury to anyone, so that
the workers lack standing. See, e.g., Spokeo, Inc. v. Robins, 136
S. Ct. 1540 (2016); Groshek v. Time Warner Cable, Inc., 865 F.3d
884 (7th Cir. 2017); Casillas v. Madison Avenue Associates, Inc.,
No. 17-3162 (7th Cir. June 4, 2019). We disagree with Judge
Kendall’s conclusion, for two principal reasons.
First, the stakes in both suits include whether the air car-
riers can use fingerprint identification. If the unions have not
consented, or if the carriers have not provided unions with
required information, a court or adjustment board may or-
der a change in how workers clock in and out. The prospect
of a material change in workers’ terms and conditions of
employment gives these suits a concrete dimension that
Spokeo, Groshek, and Casillas lacked. Either the discontinua-
tion of the practice, or the need for the air carriers to agree to
higher wages to induce unions to consent, presents more
than a bare procedural dispute. See Robertson v. Allied Solu-
tions, LLC, 902 F.3d 690, 697 (7th Cir. 2018) (“Article III’s
strictures are met not only when a plaintiff complains of be-
ing deprived of some benefit, but also when a plaintiff com-
plains that she was deprived of a chance to obtain a bene-
fit.”).
Second, plaintiffs assert that the air carriers are not fol-
lowing the statutory data-retention limit and may have used
outside parties to administer their timekeeping systems. The
Nos. 18-3476 & 19-1785 7
longer data are retained, and the more people have access,
the greater the risk of disclosure (including by dissatisfied
employees who misuse their access or by criminals who
hack into a computer system). This was Judge Aspen’s ra-
tionale for finding standing. 2018 U.S. Dist. LEXIS 143369 at
*5–10. Some employees devote time and money to safe-
guards against identity theft. That’s why we held in Remijas
v. Neiman Marcus Group, LLC, 794 F.3d 688 (7th Cir. 2015),
that a suit contending that hackers obtained personal details
presents a case or controversy, even though the plaintiffs did
not contend that their credit ratings had suffered. See also,
e.g., Lewert v. P.F. Chang’s China Bistro, Inc., 819 F.3d 963 (7th
Cir. 2016); Dieffenbach v. Barnes & Noble, Inc., 887 F.3d 826
(7th Cir. 2018). Because these complaints do not allege that
biometric data are in the hands of malefactors, their position
is weaker than that of the plaintiffs in Remijas and its succes-
sors. We need not decide whether the risk of disclosure itself
suffices for standing—or whether it would be necessary to
take discovery into the question whether biometric data
have been released—because the first ground of standing is
independently sufficient.
We begin with the suit against Southwest, for in that suit
the plaintiffs are content to litigate in federal court. We post-
pone the question whether the suit against United was
properly removed.
A dispute about the interpretation or administration of a
collective bargaining agreement must be resolved by an ad-
justment board under the Railway Labor Act. There is no
doubt that Southwest has a collective bargaining agreement
with the union that represents the three plaintiffs. Southwest
asserts that the union assented to the use of fingerprints, ei-
8 Nos. 18-3476 & 19-1785
ther expressly on being notified before the practice was insti-
tuted or through a management-rights clause. And there can
be no doubt that how workers clock in and out is a proper
subject of negotiation between unions and employers—is,
indeed, a mandatory subject of bargaining. 45 U.S.C. §152
First. (That phrase usually is associated with negotiations
under the National Labor Relations Act, but the Supreme
Court has held that the principle applies under the Railway
Labor Act too, with provisos that do not affect this case. See
PiTsburgh & Lake Erie R.R. v. Railway Labor Executives’ Associa-
tion, 491 U.S. 490, 508 n.17 (1989); Norfolk & Western Ry. v.
American Train Dispatchers’ Association, 499 U.S. 117, 122
(1991). See also Brotherhood of Locomotive Engineers v. Union
Pacific R.R., 879 F.3d 754, 756 (7th Cir. 2017).)
As a maoer of federal law, unions in the air transporta-
tion business are the workers’ exclusive bargaining agents.
45 U.S.C. §152 Second; International Association of Machinists
v. Street, 367 U.S. 740, 760 (1961). A state cannot remove a
topic from the union’s purview and require direct bargain-
ing between individual workers and management. And Illi-
nois did not try. Its statute provides that a worker or an au-
thorized agent may receive necessary notices and consent to
the collection of biometric information. 740 ILCS 14/15(b).
We reject plaintiffs’ contention that a union is not a “legally
authorized representative” for this purpose. Neither the
statutory text nor any decision by a state court suggests that
Illinois wants to exclude a collective-bargaining representa-
tive from the category of authorized agents.
Whether Southwest’s or United’s unions did consent to
the collection and use of biometric data, or perhaps grant au-
thority through a management-rights clause, is a question
Nos. 18-3476 & 19-1785 9
for an adjustment board. Similarly, the retention and de-
struction schedules for biometric data, and whether air car-
riers may use third parties to implement timekeeping and
identification systems, are topics for bargaining between un-
ions and management. States cannot bypass the mechanisms
of the Railway Labor Act and authorize direct negotiation or
litigation between workers and management. (Whether there
would be a role for litigation if a union violated its duty of
fair representation is a subject we need not confront; plain-
tiffs have not named a union as a defendant or contended
that a union has violated its duty of fair representation.) That
biometric information concerns workers’ privacy does not
distinguish it from many other subjects, such as drug testing,
that are routinely covered by collective bargaining and on
which unions give consent on behalf of the whole bargaining
unit.
When a subject independent of collective bargaining aris-
es, and concerns different treatment of different workers, lit-
igation may proceed outside the scope of the Railway Labor
Act. The Supreme Court held in Lingle v. Norge Division of
Magic Chef, Inc., 486 U.S. 399 (1988) (discussing the Labor
Management Relations Act), that a retaliatory-discharge
claim may be pursued under state law. Such a claim can be
resolved without interpreting a collective bargaining agree-
ment; it is person-specific and does not concern the terms
and conditions of employment. See also Hughes v. United Air
Lines, Inc., 634 F.3d 391 (7th Cir. 2011) (Lingle’s approach ap-
plies to the Railway Labor Act as well). But our plaintiffs as-
sert a right in common with all other employees, dealing
with a mandatory subject of collective bargaining. It is not
possible even in principle to litigate a dispute about how an
air carrier acquires and uses fingerprint information for its
10 Nos. 18-3476 & 19-1785
whole workforce without asking whether the union has con-
sented on the employees’ collective behalf. That’s why this
dispute must go to an adjustment board. Lingle, Hawaiian
Airlines, and Hughes all recognize that, if a dispute necessari-
ly entails the interpretation or administration of a collective
bargaining agreement, there’s no room for individual em-
ployees to sue under state law—in other words, state law is
preempted to the extent that a state has tried to overrule the
union’s choices on behalf of the workers.
Plaintiffs stress that Southwest began using workers’ fin-
gerprints in 2006, two years before Illinois enacted its law.
This shows that the union cannot have consented to South-
west’s practices, plaintiffs conclude. That’s not necessarily
so. Southwest and the union may have discussed and re-
solved this maoer in 2005, or 2006, or 2008, or in the decade
since. Perhaps in 2006 Southwest supplied all of the infor-
mation, and the union gave all of the consents, that the state
later required. Perhaps the statute led to a new round of bar-
gaining. What Southwest told the union, whether it fur-
nished that information in writing, when these things hap-
pened, and what the union said or did in response, are
maoers not in this record. They are properly not in this rec-
ord, as they are topics for resolution by an adjustment board
rather than a judge. Perhaps a board will conclude that the
union did not consent or did not receive essential infor-
mation before consenting, just as plaintiffs assert. But the
board must make that decision and supply any appropriate
remedy.
What we have said about the suit against Southwest ap-
plies equally to the suit against United—and the conclusion
that it is impossible to litigate under the state statute without
Nos. 18-3476 & 19-1785 11
examining what the union knew and agreed to also means
that United was entitled to remove the suit to federal court
under the federal-question jurisdiction. 28 U.S.C. §§ 1331,
1441. Although the class aoempted to frame a complaint re-
lying entirely on state law, the complaint concerns collective
bargaining regulated by federal law. That brings into play a
doctrine misleadingly called “complete preemption,” but
perhaps beoer labeled as a rule that when federal law com-
pletely occupies a field any claim within that scope rests on
federal law, no maoer how a plaintiff tries to frame the com-
plaint. See Franchise Tax Board v. Construction Laborers Vaca-
tion Trust, 463 U.S. 1, 23–24 (1983); Lehmann v. Brown, 230
F.3d 916, 919–20 (7th Cir. 2000); Hughes, 634 F.3d at 393.
If we are wrong about how the Railway Labor Act affects
collective bargaining over fingerprinting in the workplace,
then the doctrine of complete preemption would not author-
ize removal of the suit against United. So, just in case, we
add that the Class Action Fairness Act probably authorized
the removal—probably, but not certainly.
A “class action” as defined in 28 U.S.C. §1332(d)(1) may
be removed from state to federal court. 28 U.S.C. §1453(b).
Section 1332(d) creates federal jurisdiction if a class suit has
an amount in controversy exceeding $5 million and at least
one member of the class has a citizenship different from that
of the defendants. Given the size of the class (more than
4,000 workers in Illinois alone use fingerprints to clock in
and out) and the penalties provided by state law, the contro-
versy exceeds $5 million. 740 ILCS 14/20. United is a Dela-
ware corporation with its principal place of business in Illi-
nois, so if even one person who works for United in Illinois,
uses fingerprints to clock in and out, and is a citizen of any
12 Nos. 18-3476 & 19-1785
state other than Delaware or Illinois, the requirement of min-
imal diversity is met. It seems likely to us that at least one
person domiciled in southern Wisconsin or northwest Indi-
ana works for United at O’Hare Airport, which is in com-
muting distance from both states. But, for reasons that Unit-
ed has not explained, its notice of removal does not assert
this. Surely United knows where its workers live, and it may
even know their domicile (which is not always the state of
residence), but it did not put that information in its notice of
removal, which is therefore deficient.
The class representative tells us that he wants the class
limited to citizens of Illinois. It is far from clear that this is
appropriate. The state law applies to private entities that col-
lect biometric data in Illinois; the statute does not purport to
exclude people who work in Illinois, provide biometric data
in Illinois, but are domiciled in other states. Nor is it clear
that the class was so limited on the date of removal—and
post-removal amendments to a complaint or other papers do
not eliminate jurisdiction proper at the time of removal. See
Rockwell International Corp. v. United States, 549 U.S. 457, 473–
74 & n.6 (2007). Still, the shortcoming in United’s allegations
of citizenship remains as a potential obstacle.
After these problems were pointed out at oral argument,
United filed a jurisdictional supplement, invoking 28 U.S.C.
§1653. In addition to wrongly supposing that the suit chal-
lenges its employment practices nationwide—which is not
possible, as the state statute is limited to Illinois—the sup-
plemental filing continues to refer to the “residence” rather
than the “citizenship” of United’s Illinois workforce.
Given our conclusion that the federal-question jurisdic-
tion supports removal, we need not remand for the district
Nos. 18-3476 & 19-1785 13
court to explore the question whether, on the date the case
was removed, one class member was a citizen of Wisconsin
or Indiana, or conceivably some third state other than Illinois
or Delaware—say, a citizen of California temporarily de-
tailed to work at O’Hare.
In Miller v. Southwest Airlines, No. 18-3476, the judg-
ment of the district court is affirmed. In Johnson v. United Air-
lines, No. 19-1785, the judgment is vacated, and the case is
remanded with instructions to refer the parties’ dispute to an
adjustment board.