In this legal analysis piece for National Law Review, Darrow's Nitzan Halperin and Jordan Grimmer-Tufik examine a landmark settlement in biometric privacy litigation — one that marks a genuine first in how BIPA cases are being resolved and signals where this category of litigation may be heading.
On March 20, 2025, U.S. District Judge Sharon Johnson Coleman approved a nationwide class-action settlement granting class members a 23% equity stake in Clearview AI. The settlement is the first of its kind in BIPA litigation, and one of the most unconventional class action resolutions in recent memory. Rather than distributing cash, the agreement ties class members' recovery to Clearview's future value — meaning any financial return depends on the company achieving a sale, IPO, or liquidation. The total estimated value of the settlement was placed at approximately $51.75 million.
The underlying case centered on Clearview AI's business model itself. The company built a facial recognition database of more than 60 billion facial images by scraping photographs from social media platforms, news websites, Venmo, and other publicly accessible sources — without the knowledge or consent of the individuals pictured. That database powers software used primarily by law enforcement to identify individuals by matching uploaded photos against the scraped collection. Plaintiffs alleged this practice violated Illinois' Biometric Information Privacy Act, which imposes strict requirements on any entity that collects, stores, or uses biometric identifiers, including the obligation to obtain affirmative consent before collection.
The case attracted significant attention well before settlement. A 2020 New York Times exposé first brought Clearview's practices to public awareness, triggering a wave of lawsuits that were eventually consolidated into a multidistrict litigation in the Northern District of Illinois. The suit named violations under BIPA as well as privacy statutes in Virginia, California, and New York. A bipartisan group of attorneys general from 22 states and the District of Columbia filed an amicus brief opposing the settlement, arguing that the equity-based structure provided speculative rather than meaningful relief and failed to include adequate injunctive protections. The court disagreed, finding the settlement fair, reasonable, and adequate under Rule 23.
The piece places this settlement in the broader context of BIPA's evolution. After the Illinois Supreme Court allowed damages for each individual instance of biometric data collection in 2023 — dramatically multiplying exposure for defendants — BIPA filings accelerated sharply, reaching 427 suits in 2024 alone. Illinois subsequently amended BIPA to limit plaintiffs to one recovery per person rather than per scan. The Clearview settlement represents a creative response to a company that could not simply write a check: an equity stake preserves the business while providing class members with a claim on its future value.
For practitioners, the piece serves as a signal that courts are increasingly receptive to novel structures in privacy litigation — and that BIPA, even as it is amended, continues to generate significant legal exposure for companies operating at the intersection of AI and personal data.
