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Update:
- Amazon and two stockholders who recently filed separate lawsuits against certain company leaders have asked a Washington federal judge to consolidate their cases.
- Both lawsuits allege Amazon executives mishandled biometric data under Illinois privacy law and misled investors about it.
- In a motion filed July 7, the two plaintiffs, Stephen Nelson and Francis Gimbel, Jr, said their cases should be consolidated because they are both shareholder derivative actions brought on behalf of Amazon against the same executives, and they involve common questions of law.
- In Nelson’s case, it is alleged that Amazon’s top executives misled investors about the company’s compliance with the Illinois Biometric Information Privacy Act and subsequent litigation risks.
- In Gimbel Jr.’s case, it is alleged that the Amazon executives harmed investors by mishandling biometric data collection, securing contracts with third-party sellers and misleading compliance filings with the Securities Exchange Commission.
Amazon BIPA compliance derivative lawsuit overview:
- Who: Stephen G. Nelson, derivatively on behalf of Amazon, filed a class action lawsuit against the company and its top executives.
- Why: Nelson claims Amazon’s top executives misled investors about its compliance with the Illinois Biometric Information Privacy Act and its subsequent litigation risks.
- Where: The class action lawsuit was filed in Washington federal court.
(April 28, 2022)
Amazon’s top executives have misled investors about the company’s compliance with the Illinois Biometric Information Privacy Act (BIPA) and subsequent litigation risks, a new derivative lawsuit alleges.
Plaintiff Stephen G. Nelson, derivatively on behalf of Amazon, claims the company is facing 14 proposed class action lawsuits due to allegations of BIPA violations.
“These violations have exposed Amazon to substantial harm,” the Amazon class action states.
Nelson names Amazon Founder and Executive Chair Jeff Bezos, CEO Andrew R. Jassy and Senior Vice President and Chief Financial Officer Brian Olsavsky as defendants in the class action lawsuit, among other board members and executives.
“Due to the Amazon Board of Directors’ knowledge of illegal conduct and involvement in the wrongdoing, its blatant failure to act (including to stop or correct viola”ons of the law), its members’ lack of independence and the substantial likelihood of liability its members face, any demand upon the board to rectify this wrongdoing would be a wasteful, useless and futile act,” the Amazon derivative complaint states.
To be in compliance with BIPA, a company must be given written consent before it is able to collect and store biometric identifiers such as fingerprints or facial scans, according to the class action lawsuit.
Nelson says Amazon must also make other disclosures, such as how it plans to eventually get rid of any biometric identifiers it collects.
Amazon disregarded ‘Red Flags’ that indicated privacy violation, class action says
Amazon disregarded “red flags” that indicated privacy violations, directly participated in “improper schemes” and failed to maintain an “adequate system of oversight,” among other things, the Amazon class action alleges.
Nelson argues Amazon also failed to correct “improper statements” made in filings to the U.S. Securities and Exchange Commission in regard to the company’s “operations, internal controls, legal proceedings and risks (including financial, operational, legal, regulatory and enforcement risks), and privacy compliance.”
Amazon’s senior executives, meanwhile, were awarded “lavish compensation packages, despite their knowledge of and responsibility for the Company’s willful misconduct,” the class action alleges.
Nelson claims Amazon’s officers and directors have breached their fiduciary duties and that the company and its executives are guilty of unjust enrichment and committing a waste of corporate assets.
Plaintiff is demanding a jury trial and requesting injunctive relief along with unspecified damages.
A class action lawsuit lobbied against Amazon was thrown out by a federal judge in New York earlier this month after he determined the company did not violate the law by rescinding employment offers to applicants who tested positive for cannabis.
Do you believe Amazon executives misled investors about its BIPA compliance ? Let us know in the comments!
The plaintiff is represented by Gregory F. Wesner and John C. Herman of Herman Jones LLP.
The Amazon BIPA Compliance Derivative Lawsuit is Nelson v. Bezos, et al., Case No. 2:22-cv-00559, in the U.S. District Court for the Western District of Washington.
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