Legal Roundup: Wineries Sue Over Smoke, Volvo Faces Cultural Blind Spot and More

The latest court decisions impacting risk management and the insurance industry.
By: | February 5, 2020

Facebook Settles Facial Recognition Suit for $550 Million 

The Case: Can Facebook legally use biometric data to help users tag each other in photos? That was the central question in a lawsuit between the social network and a group of its users.

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The New York Times explains: “The case stemmed from Facebook’s photo-labeling service, Tag Suggestions, which uses face-matching software to suggest the names of people in users’ photos. The suit said the Silicon Valley company violated an Illinois biometric privacy law by harvesting facial data for Tag Suggestions from the photos of millions of users in the state without their permission and without telling them how long the data would be kept.”

Scorecard: Facebook has settled the case for $550 million. The money will go to eligible Facebook users and pay for their legal fees. The company admitted no wrongdoing.

Takeaway: It’s a victory for privacy advocates in a world that’s increasingly using biometric data in more sophisticated ways.

Police in London are using real-time facial recognition to find potential criminals.

Amazon has face-matching technology that law enforcement can use to identify unknown suspects.

“The American Civil Liberties Union and other groups have warned that the spread of such services could end people’s ability to remain anonymous in public,” according to the New York Times. But state laws, like the ones in Illinois, certainly may impede the growth of such technology if it violates privacy.

For Facebook, it’s another blemish on their already spotty privacy record. But despite the seemingly high price tag, it won’t make too much of a dent on the company’s bottom line. “The sum amounted to a rounding error for Facebook,” according to the New York Times, “which reported that revenue rose 25 percent to $21 billion in the fourth quarter, compared with a year earlier, while profit increased 7 percent to $7.3 billion.”

More Wineries Sue Insurers for Failing to Cover ‘Smoke Taint’ from Wildfires

The Case: Two more California wineries are suing their insurers for failure to pay claims associated with “smoke taint” from 2017 wildfires.

Kunde Family Winery is seeking more than $7 million from National Surety Corporation, while Vintage Wine Estates wants more than $12 million from Certain Underwriters at Lloyd’s of London, Royal & Sun Alliance Insurance and four others. It comes on the heels of a $1.14 million case against Nationwide Agribusiness Insurance in May 2019. 

Smoke taint can rob a wine of its typical taste and aroma, leaving it with an ashy flavor.

Kunde Family Winery and Vintage Wine Estates say it “destroyed the marketability of some of their wines, resulting in substantial losses that should be covered under their respective insurance policies,” according to Wine Spectator.

The insurance companies, meanwhile, say they don’t cover damage to grapes still hanging on the vine.

Scorecard: The case has just recently been filed and is still in the early stages.

Takeaway: Are insurers liable for damage to the grapes even though the wine is still technically drinkable? At what point in the wine-making process does insurance coverage kick in?

These cases could provide some answers. Wine Spectator says these lawsuits “could set a precedent for future cases, as climate change and years of drought make wildfires a growing threat to wine regions.”

Lawsuit: Volvo Fired Man for Not Being Swedish 

The Case: Luke Diventi claims he was turned down for a promotion and eventually fired for by Volvo for not being Swedish.

The Romanian spent seven years working with Volvo Group in Greensboro, N.C. and claims that Volvo “habitually gave preferential treatment to its Swedish-born workers in Greensboro, including speaking in Swedish in open group meetings and during business discussions,” according to the Charlotte Observer.

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After he complained to management, he was turned down for a business trip to Volvo headquarters in Gothenburg, then denied a promotion.

In both cases, he says, a Swedish-born person was awarded the opportunity.

He also claims management even told him “to be more Swedish” when interacting with co-workers, the newspaper said. He’s seeking $25,000 in damages.

Scorecard: The case is still ongoing.

Takeaway: We have no way of knowing how Volvo Group management acted in this case but it’s a good reminder that cultural blind spots can hurt any organization.

If you’re constantly rewarding and promoting people who look like you, you’re going to run into problems. &

Jared Shelly is a journalist based in Philadelphia. He can be reached at [email protected]

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The R&I Editorial Team can be reached at [email protected]