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MEMORANDUM

CONFIDENTIAL — ATTORNEY WORK PRODUCT

TO: Colleen Farrow, Director, Conflicts & New Business, Calderwood & Harkness LLP

FROM: Rachel Bernstein, Partner, Privacy & Data Security, Calderwood & Harkness LLP

DATE: May 9, 2024

RE: Conflicts Search Request — Proposed New Matter No. 1031-00001: Metropolitan Transit Development Corp.

OFFICE: One North Wacker Drive, Suite 4200, Chicago, IL 60606

I. Purpose and Request

I am writing to formally request a comprehensive conflicts search across all firm databases in connection with proposed new Matter No. 1031-00001. The search should encompass the firm's client and matter management system (including all active and inactive matter records), the lateral-hire records database (including portability disclosures and prior-firm client lists submitted by lateral partners and counsel upon joining the firm), the business-development contacts database maintained by the Marketing and Business Development Department, and the prior-search archives maintained by the Conflicts & New Business Department. All supplemental databases or data sources available to your department — including any proprietary risk-management tools, corporate-tree services, or external entity-verification platforms to which the firm subscribes — should likewise be queried as part of this search.

The prospective client is Metropolitan Transit Development Corp. ("MTDC" or "Metro Transit"), a unit of local government and special-purpose transit authority organized and existing under the Illinois Local Mass Transit District Act (70 ILCS 3610/1 et seq.). MTDC is headquartered at 550 West Harrison Street, Suite 1400, Chicago, Illinois 60607. Its federal Employer Identification Number is 36-6041928. MTDC is a governmental body exercising powers delegated by the State of Illinois and is not a privately held or publicly traded corporation; however, it issues revenue bonds, maintains vendor and employment relationships, and retains outside professionals in a manner that may generate conflicts-relevant touchpoints within the firm's records.

This request is made in anticipation of the firm opening a formal engagement with MTDC. As of the date of this memorandum, no engagement letter has been executed, no retainer has been collected, and no attorney-client relationship has been formed between Calderwood & Harkness LLP and MTDC. No substantive legal advice has been rendered to MTDC, and all communications to date have been limited to preliminary discussions regarding the firm's qualifications and the general nature of the proposed engagement.

Urgency. MTDC faces imminent regulatory and litigation deadlines that make time of the essence. The Civil Investigative Demand described below requires a response within thirty (30) days of issuance (i.e., by May 22, 2024), and the class-action complaint requires responsive pleading activity within the standard time permitted under the Illinois Code of Civil Procedure. MTDC's current outside litigation counsel, Hargrove, Tillman & Reese LLP, has requested that Calderwood & Harkness complete intake and, if cleared, execute an engagement letter no later than May 14, 2024, so that the engagement team can begin substantive work during the week of May 15. Accordingly, I respectfully request that preliminary search results be returned within twenty-four (24) hours of receipt of this memorandum — that is, by close of business on May 10, 2024 — if at all possible. I recognize this is an expedited timeline and am happy to assist your department in any way that would facilitate a prompt response.

II. Description of Proposed Engagement

A. Engagement Scope

The proposed engagement encompasses the defense and counseling of MTDC across several interrelated regulatory, litigation, and transactional matters, each of which is described below:

(a) Defense of the Civil Investigative Demand. On April 22, 2024, the Illinois Attorney General's Bureau of Civil Rights issued a Civil Investigative Demand to MTDC bearing Reference Number CRB-2024-0417 (the "CID"). The CID alleges that MTDC's collection, use, storage, and dissemination of biometric data from its workforce violates the Illinois Biometric Information Privacy Act, 740 ILCS 14/1 et seq. ("BIPA"), and the Illinois Personal Information Protection Act, 815 ILCS 530/1 et seq. ("PIPA"). The CID demands the production of documents and interrogatory responses relating to MTDC's deployment of a biometric timekeeping and scheduling platform, its data-retention and destruction policies, its employee-consent protocols, and its contractual arrangements with third-party technology vendors. The firm's proposed role would include responding to the CID, negotiating with the Bureau of Civil Rights regarding scope and timing, and defending MTDC in any enforcement action that may follow.

(b) Defense of the Employee Class Action. On April 29, 2024, a putative employee class action was filed in the Circuit Court of Cook County, Chancery Division, bearing Case Number 2024-CH-04417 (the "Class Action"). The complaint asserts claims under BIPA and related state-law privacy and employment theories on behalf of a proposed class of approximately 12,400 current and former MTDC employees. The named plaintiffs allege that MTDC collected fingerprint scans, facial-geometry data, and iris scans without obtaining written informed consent as required by Section 15(b) of BIPA and without publishing a compliant written retention and destruction policy as required by Section 15(a) of BIPA. The firm's proposed role would include defending MTDC through all phases of the Class Action, including class certification, discovery, dispositive motions, trial, and any post-trial proceedings or appeals.

(c) Biometric-Data Remediation Counseling. MTDC has requested advice on the remediation of its biometric-data collection, storage, and processing practices to achieve compliance with BIPA, PIPA, and any other applicable federal and state privacy laws. This work will involve a review of existing policies, data-mapping exercises, vendor-management assessments, and the development of revised consent forms, retention schedules, and destruction protocols.

(d) Cross-Claims and Indemnification Proceedings Against Technology Vendors. MTDC anticipates asserting cross-claims and pursuing contractual indemnification against its principal biometric-technology vendor, Pinnacle Workforce Analytics, Inc. ("Pinnacle"), under the Master Software License and Services Agreement dated June 15, 2021 (the "MSLA"). MTDC contends that Pinnacle designed, deployed, and maintained the TruScan 360 biometric timekeeping platform at issue in both the CID and the Class Action, and that the MSLA contains representations, warranties, and indemnification obligations that may shift liability to Pinnacle. The firm's proposed role would include analyzing the MSLA, formulating and pursuing cross-claims, and managing any related contribution or indemnification proceedings, whether brought within the existing Class Action, as a separate third-party action, or as a claim in a parallel enforcement proceeding.

(e) Employment Counseling Regarding Workforce-Monitoring Policies. In connection with the foregoing matters, MTDC has also requested employment-law counseling concerning its broader workforce-monitoring policies, including video surveillance, GPS tracking of transit vehicles, and electronic-communications monitoring. This advisory work is related to the biometric-data issues at the center of the CID and Class Action and is intended to ensure that MTDC's overall workplace-privacy practices are brought into compliance on a comprehensive basis.

B. Proposed Engagement Team

The following Calderwood & Harkness attorneys are proposed to staff this matter:

Each of these attorneys should be included in the conflicts search. To the extent that any of these attorneys possesses confidential information from a prior or current representation of any party identified in Section III below, such circumstances should be flagged immediately so that the firm can assess whether screening or other measures may be appropriate.

C. Proposed Fee Arrangement

The engagement would be conducted on an hourly-rate basis at the following rates:

• Partner: $1,150 per hour

• Senior Associate: $785 per hour

• Junior Associate: $625 per hour

Based on preliminary scoping, the estimated total fees for the engagement range from approximately $3.5 million to $5.2 million over an anticipated eighteen- to twenty-four-month period. This estimate accounts for the defense of both the CID and the Class Action through resolution, the remediation counseling work, and the cross-claim and indemnification proceedings against Pinnacle. The estimate is subject to revision based on the course of discovery, class-certification proceedings, and the disposition of the regulatory investigation.

D. Referral Source

MTDC was referred to Calderwood & Harkness by Hargrove, Tillman & Reese LLP, through its partner Constance Hargrove. Hargrove, Tillman & Reese serves as MTDC's existing outside litigation counsel for general commercial and governmental-liability matters. Ms. Hargrove determined that MTDC required specialized BIPA and data-privacy defense expertise that fell outside the Hargrove firm's core practice areas and accordingly facilitated an introduction to our Privacy & Data Security practice group. An initial telephone conference among MTDC General Counsel Terrence Whitfield, Constance Hargrove, and Rachel Bernstein took place on May 6, 2024. A follow-up meeting is currently scheduled for May 13, 2024, contingent upon the satisfactory completion of this conflicts search and the firm's clearance of the new matter.

III. Parties and Affiliates to Be Searched

The following parties and individuals should be included in the conflicts search. I have organized them into four categories for ease of reference. Please search on all names, known variations, abbreviations, and "doing business as" designations, as further specified in Section IV below.

A. Prospective Client and Officers / Key Personnel

B. Anticipated Adverse Parties

C. Potential Cross-Claim / Indemnification Targets

D. Related Third Parties and Affiliates

IV. Search Parameters and Special Instructions

In conducting the conflicts search, I ask that your department observe the following parameters and special instructions:

1. Name Variations. Search all known variations, abbreviations, trade names, and "doing business as" designations for each entity listed in Section III. For the prospective client, this includes but is not limited to "Metropolitan Transit Development Corp.," "Metropolitan Transit Development Corporation," "MTDC," "Metro Transit," "Metro Transit Development," and "Metro Transit Dev. Corp." Similar variation searches should be conducted for all other entities.

2. Pinnacle Affiliates, Subsidiaries, and Parent Entities. Search all known affiliates, subsidiaries, parent entities, and predecessor entities of Pinnacle Workforce Analytics, Inc. If the firm's corporate-tree subscription service provides a corporate hierarchy for Pinnacle (EIN: 54-2198437), please run the full tree and search all entities appearing therein. Given the potential for cross-claims against Pinnacle, thoroughness on this point is critical.

3. MTDC Board Members. To the extent publicly available listings of the MTDC Board of Directors can be obtained (e.g., through the MTDC website, SEC EMMA filings for municipal bonds, or Illinois Secretary of State records), please cross-reference those individuals against the firm's databases. Board members of a governmental transit authority may also serve on other boards or hold positions that create conflicts-relevant connections.

4. Current and Archived Records. Include searches in both the current-client database and all closed, archived, or inactive matter records. Matters that have been closed or archived may still give rise to duties under Illinois Rule of Professional Conduct 1.9 (duties to former clients), and it is essential that those records be captured.

5. Historical Representations. Flag any historical representation of, or adverse to, any listed party, regardless of whether the matter is active, closed, dormant, or archived. Each flagged matter should include, at minimum, the matter number, the responsible partner, a brief description of the nature of the representation, the dates of the engagement, and the current status of the matter.

6. Particular Attention to Pinnacle. I wish to emphasize that the proposed engagement may require the firm to take positions materially adverse to Pinnacle Workforce Analytics, Inc. regarding its design, deployment, and maintenance of the TruScan 360 biometric platform. Any existing or prior firm relationship with Pinnacle — whether as a client, an adverse party, a business-development target, a lateral-hire portability client, or in any other capacity — should be flagged with particularity. For any such match, please provide the responsible partner's name, the matter number, the nature and scope of the representation or relationship, the dates of the relationship, and any relevant engagement-letter provisions concerning future-conflicts waivers or consent-to-adversity clauses.

7. Individual Searches. For all individuals listed in Section III (including attorneys at opposing and co-counsel firms), search both the conflicts database and the firm's personnel and alumni records, in the event that any listed individual is a current or former Calderwood & Harkness attorney or professional staff member.

8. Referral-Source Considerations. Although Hargrove, Tillman & Reese LLP is the referral source and is expected to remain as MTDC's general litigation counsel on non-privacy matters, please search the firm and its named partners to confirm that no existing Calderwood & Harkness engagement adverse to Hargrove, Tillman & Reese or its clients creates a conflict or reputational concern.

V. Background Information for Context

The following background information is provided to assist in evaluating any potential conflicts that may be identified and to provide context for the significance of the proposed engagement.

MTDC Operations and Profile. MTDC operates bus, commuter rail, and paratransit services across Cook County and five collar counties (DuPage, Kane, Lake, McHenry, and Will). MTDC serves approximately 1.6 million daily riders and is one of the largest transit authorities in the Midwest. Its annual operating budget is approximately $3.2 billion, funded through a combination of farebox revenue, federal and state transit subsidies, sales-tax allocations, and revenue-bond proceeds. MTDC's annual outside-counsel budget is approximately $14.8 million, distributed across a panel of approximately fifteen law firms. Calderwood & Harkness has not previously served on the MTDC outside-counsel panel.

Genesis of the CID and Class Action. Both the CID and the Class Action arise from MTDC's deployment of Pinnacle's TruScan 360 platform, an AI-powered timekeeping and scheduling system that collects fingerprint scans, facial-geometry measurements, and iris-scan biometric data from employees as part of its workforce-authentication and attendance-tracking functionality. The TruScan 360 platform was deployed across all MTDC facilities beginning in September 2021, pursuant to the MSLA. According to MTDC's preliminary internal review, approximately 12,400 current and former employees have been subject to biometric-data collection through the platform since its deployment. MTDC's initial assessment suggests that certain BIPA-compliance obligations — including the execution of individualized written informed-consent forms and the publication of a publicly available written retention and destruction schedule — may not have been fully satisfied at the time of initial deployment.

Damages Exposure. MTDC's aggregate BIPA statutory-damages exposure has been estimated by Lakefront Actuarial Advisors at between $12.4 million (negligent violations: 12,400 class members × $1,000 per violation under Section 20(1) of BIPA) and $62.0 million (intentional or reckless violations: 12,400 class members × $5,000 per violation under Section 20(2) of BIPA). These figures do not account for potential penalties in the AG enforcement proceeding, which could be pursued under the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq., and could include civil penalties of up to $50,000 per violation (or $100,000 per violation if the affected individual is elderly or disabled). The total exposure, including enforcement penalties and attorneys' fees and costs, could be substantial.

Pinnacle Profile and MSLA Terms. Pinnacle Workforce Analytics, Inc. is a Delaware corporation headquartered in Reston, Virginia, with annual revenue of approximately $485 million. Pinnacle is a leading provider of AI-driven workforce-management solutions to governmental, healthcare, and transportation-sector clients nationwide. The MSLA between Pinnacle and MTDC has a five-year initial term running from June 15, 2021 through June 14, 2026, with an optional three-year renewal at MTDC's election. The total contract value is $8,700,000, or approximately $1,740,000 per year. The MSLA contains representations and warranties by Pinnacle regarding the platform's compliance with applicable law, as well as a broad indemnification clause under which Pinnacle agreed to indemnify MTDC for losses arising from Pinnacle's breach of its obligations under the MSLA or Pinnacle's violation of applicable law in the provision of licensed services. MTDC's General Counsel has indicated that MTDC intends to invoke this indemnification provision aggressively.

AG Enforcement Posture. The Illinois Attorney General's Bureau of Civil Rights has indicated informally — through the CID cover letter and in a telephone conference with MTDC's General Counsel on April 30, 2024 — that Pinnacle may be named as a co-respondent in any formal enforcement action brought by the AG's Office. This circumstance reinforces the need for the firm to have a clear picture of any relationships with Pinnacle before proceeding.

VI. Applicable Ethics Rules

The conflicts analysis arising from this search will be governed by the Illinois Rules of Professional Conduct, as adopted by the Supreme Court of Illinois. The following rules are of particular relevance:

Rule 1.7 — Conflict of Interest: Current Clients. Rule 1.7(a)(1) prohibits a lawyer from representing a client if the representation involves a concurrent conflict of interest — specifically, where the representation of one client will be directly adverse to another client. Rule 1.7(a)(2) addresses material-limitation conflicts, where there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client, a third person, or by a personal interest of the lawyer. Both prongs are relevant here, given the multiplicity of parties involved and the firm's potential need to take positions adverse to Pinnacle while possibly maintaining (or having maintained) a separate relationship with Pinnacle or its affiliates.

Rule 1.9 — Duties to Former Clients. To the extent that any party listed in Section III is a former client of the firm, Rule 1.9 restricts the firm's ability to represent a new client in the same or a substantially related matter in which the new client's interests are materially adverse to the former client's interests, unless the former client gives informed consent confirmed in writing. Any former-client relationship with Pinnacle or with the Illinois Attorney General's Office (in its capacity as a client rather than a sovereign) should be flagged for analysis under this rule.

Rule 1.10 — Imputation of Conflicts of Interest. Under Rule 1.10, a conflict of interest held by any lawyer in the firm is generally imputed to all lawyers in the firm. This rule requires that the conflicts search encompass the knowledge and prior representations of all firm attorneys, including lateral hires who may have brought conflicts from their prior firms. Any imputed conflicts identified through lateral-hire portability disclosures should be flagged and assessed for the availability of screening under Rule 1.10(a)(2).

I request that any match identified through this conflicts search be escalated immediately to me (Rachel Bernstein) by telephone and email. If the match involves a current-client representation or a relationship with Pinnacle Workforce Analytics, Inc. or its affiliates, I further request that the matter be escalated to the Conflicts Committee (Chair: Lawrence Keating, Partner, Professional Responsibility) and to the firm General Counsel (Helen Drazkowski) for review and determination. Time is of the essence, and prompt escalation will enable the engagement team to make an informed intake decision before the May 14 deadline for execution of the engagement letter.

VII. Contact Information and Deadline

Contact for Questions. Any questions regarding this conflicts search request, the parties to be searched, or the scope of the proposed engagement should be directed to me:

Rachel Bernstein Partner, Privacy & Data Security Calderwood & Harkness LLP One North Wacker Drive, Suite 4200 Chicago, IL 60606 Direct Dial: (312) 555-4718

Email: rbernstein@calderwoodharkness.com

I am available by telephone and email throughout the day and after business hours. If I am unavailable, Devon Archer (direct dial: (312) 555-4732; email: darcher@calderwoodharkness.com) may be contacted as an alternate point of contact for this search request.

Requested Turnaround. I respectfully request that preliminary search results be provided within twenty-four (24) hours of receipt of this memorandum — that is, by close of business on Friday, May 10, 2024. A full report, including the results of the expanded-party search (covering Pinnacle affiliates, MTDC board members, and additional name variations), should follow as soon as practicable thereafter. I understand that the expanded search may require additional time and am prepared to work with your team on a reasonable timeline, provided the preliminary results are available by the May 10 deadline.

Distribution. A copy of this memorandum has been provided to the following individuals for awareness of the intake status of the proposed engagement:

• Miriam Calloway, Partner, Healthcare & Life Sciences (proposed billing partner)

• Devon Archer, Associate, Labor & Employment (proposed lead associate)

No copy has been provided to MTDC, Hargrove, Tillman & Reese LLP, or any person outside the firm. This memorandum is an internal attorney work-product communication and should be treated as confidential.

Thank you for your prompt attention to this request. I appreciate the Conflicts & New Business Department's diligence in processing expedited search requests and am happy to provide any additional information that would assist in completing the search.

Rachel Bernstein

Partner, Privacy & Data Security Calderwood & Harkness LLP One North Wacker Drive, Suite 4200 Chicago, IL 60606 Direct Dial: (312) 555-4718

Email: rbernstein@calderwoodharkness.com

CONFIDENTIAL — ATTORNEY WORK PRODUCT. This memorandum is an internal communication of Calderwood & Harkness LLP prepared in anticipation of a new-matter intake determination. It is protected by the attorney work-product doctrine and the attorney-client privilege to the fullest extent permitted by law. Distribution outside the firm is prohibited without the prior written consent of the author. If you have received this memorandum in error, please notify the author immediately and destroy all copies.

Attorney	Role	Practice Group
Rachel Bernstein	Responsible Partner	Privacy & Data Security
Miriam Calloway	Billing Partner	Healthcare & Life Sciences
Devon Archer	Lead Associate	Labor & Employment
Nadia Petrov	Working Associate	Labor & Employment
Name / Entity	Role	Notes
Metropolitan Transit Development Corp. (also: "MTDC"; "Metro Transit"; "Metropolitan Transit Development Corporation")	Prospective client	Illinois governmental transit authority; 550 West Harrison Street, Suite 1400, Chicago, IL 60607; EIN: 36-6041928
Terrence Whitfield	General Counsel, MTDC	Primary contact for the engagement; will serve as the principal liaison between MTDC and the Calderwood & Harkness engagement team
Lucia Marchetti	Chief Information Security Officer, MTDC	Key witness and personnel involved in the procurement and deployment of the TruScan 360 biometric platform; likely deponent in both the CID and the Class Action
Darnell Okafor	Executive Director, MTDC	Chief executive officer of the transit authority; signatory on the Pinnacle MSLA; likely a person of interest in the AG investigation
Name / Entity	Role	Notes
Office of the Illinois Attorney General — Bureau of Civil Rights	Adverse governmental party	Issued CID Ref. CRB-2024-0417 on April 22, 2024; may initiate formal enforcement action
Malcolm Jeffries	Deputy Attorney General for Civil Rights, Illinois AG's Office	Lead AG representative on the CID; signatory on the CID cover letter
Ridgeway & Falk LLP	Outside special counsel retained by the Illinois AG's Office	401 East Adams Street, Suite 300, Springfield, IL 62701
Diane Falk	Partner, Ridgeway & Falk LLP	Lead partner on the AG's special counsel engagement; co-signatory on certain CID-related correspondence
Kessler, Brandt & O'Neill LLP	Plaintiffs' class counsel in the employee class action (Case No. 2024-CH-04417)	120 North LaSalle Street, Suite 2200, Chicago, IL 60602
Martin Kessler	Partner, Kessler, Brandt & O'Neill LLP	Lead class counsel
Yolanda Brandt	Partner, Kessler, Brandt & O'Neill LLP	Co-class counsel
Name / Entity	Role	Notes
Pinnacle Workforce Analytics, Inc.	MTDC's former workforce-surveillance technology vendor; potential cross-claim and indemnification target	Delaware corporation; headquarters: 11900 Sunrise Valley Drive, Suite 500, Reston, VA 20191; EIN: 54-2198437; developer and licensor of the TruScan 360 biometric timekeeping and scheduling platform; party to the MSLA dated June 15, 2021 (5-year initial term; $8,700,000 total contract value / approximately $1,740,000 per year). Approximately $485 million in annual revenue.
Gregory Harmon	Chief Executive Officer, Pinnacle Workforce Analytics, Inc.	Signatory on the MSLA; may be a witness or deposition target in cross-claim proceedings
Sandra Yee	General Counsel, Pinnacle Workforce Analytics, Inc.	Primary legal contact at Pinnacle; recipient of MTDC's pre-litigation demand letter dated May 2, 2024
Name / Entity	Role	Notes
Hargrove, Tillman & Reese LLP	MTDC's existing outside litigation counsel; referral source for this engagement	233 South Wacker Drive, Suite 5600, Chicago, IL 60606
Constance Hargrove	Partner, Hargrove, Tillman & Reese LLP	Lead partner on the MTDC account; facilitated the introduction to Calderwood & Harkness

Meridian Trust National Bank	MTDC's fiscal agent and bond trustee	135 South LaSalle Street, Chicago, IL 60603; national banking association chartered by the Office of the Comptroller of the Currency
Angela Tran	Chief Fiduciary Officer, Meridian Trust National Bank	Potential contact regarding bond-covenant implications of BIPA liability and any material-adverse-event reporting obligations under MTDC's outstanding revenue-bond indentures
Lakefront Actuarial Advisors, LLC	MTDC's consulting actuary for damages-exposure analysis	200 East Randolph Street, Suite 1710, Chicago, IL 60601
Felix Drummond, FSA, MAAA	Principal, Lakefront Actuarial Advisors, LLC	Retained by MTDC for BIPA statutory-damages estimation; has prepared preliminary exposure memoranda
Veritas Biometrics Corp.	Pinnacle competitor; not directly a party to the MTDC matters but included for completeness as a Pinnacle-related entity and potential market participant	8200 Greensboro Drive, Suite 1100, McLean, VA 22102
Randall Cho	Chief Executive Officer, Veritas Biometrics Corp.	Included for search completeness; may have relevance if Pinnacle asserts competitive-harm defenses or if MTDC considers alternative vendor relationships

MEMORANDUM
CONFIDENTIAL — ATTORNEY WORK PRODUCT
TO: Colleen Farrow, Director, Conflicts & New Business, Calderwood & Harkness LLP
FROM: Rachel Bernstein, Partner, Privacy & Data Security, Calderwood & Harkness LLP
DATE: May 9, 2024
RE: Conflicts Search Request — Proposed New Matter No. 1031-00001: Metropolitan Transit Development Corp.
OFFICE: One North Wacker Drive, Suite 4200, Chicago, IL 60606
I. Purpose and Request
I am writing to formally request a comprehensive conflicts search across all firm databases in connection with proposed new Matter No. 1031-00001. The search should encompass the firm's client and matter management system (including all active and inactive matter records), the lateral-hire records database (including portability disclosures and prior-firm client lists submitted by lateral partners and counsel upon joining the firm), the business-development contacts database maintained by the Marketing and Business Development Department, and the prior-search archives maintained by the Conflicts & New Business Department. All supplemental databases or data sources available to your department — including any proprietary risk-management tools, corporate-tree services, or external entity-verification platforms to which the firm subscribes — should likewise be queried as part of this search.
The prospective client is Metropolitan Transit Development Corp. ("MTDC" or "Metro Transit"), a unit of local government and special-purpose transit authority organized and existing under the Illinois Local Mass Transit District Act (70 ILCS 3610/1 et seq.). MTDC is headquartered at 550 West Harrison Street, Suite 1400, Chicago, Illinois 60607. Its federal Employer Identification Number is 36-6041928. MTDC is a governmental body exercising powers delegated by the State of Illinois and is not a privately held or publicly traded corporation; however, it issues revenue bonds, maintains vendor and employment relationships, and retains outside professionals in a manner that may generate conflicts-relevant touchpoints within the firm's records.
This request is made in anticipation of the firm opening a formal engagement with MTDC. As of the date of this memorandum, no engagement letter has been executed, no retainer has been collected, and no attorney-client relationship has been formed between Calderwood & Harkness LLP and MTDC. No substantive legal advice has been rendered to MTDC, and all communications to date have been limited to preliminary discussions regarding the firm's qualifications and the general nature of the proposed engagement.
Urgency. MTDC faces imminent regulatory and litigation deadlines that make time of the essence. The Civil Investigative Demand described below requires a response within thirty (30) days of issuance (i.e., by May 22, 2024), and the class-action complaint requires responsive pleading activity within the standard time permitted under the Illinois Code of Civil Procedure. MTDC's current outside litigation counsel, Hargrove, Tillman & Reese LLP, has requested that Calderwood & Harkness complete intake and, if cleared, execute an engagement letter no later than May 14, 2024, so that the engagement team can begin substantive work during the week of May 15. Accordingly, I respectfully request that preliminary search results be returned within twenty-four (24) hours of receipt of this memorandum — that is, by close of business on May 10, 2024 — if at all possible. I recognize this is an expedited timeline and am happy to assist your department in any way that would facilitate a prompt response.
II. Description of Proposed Engagement
A. Engagement Scope
The proposed engagement encompasses the defense and counseling of MTDC across several interrelated regulatory, litigation, and transactional matters, each of which is described below:
(a) Defense of the Civil Investigative Demand. On April 22, 2024, the Illinois Attorney General's Bureau of Civil Rights issued a Civil Investigative Demand to MTDC bearing Reference Number CRB-2024-0417 (the "CID"). The CID alleges that MTDC's collection, use, storage, and dissemination of biometric data from its workforce violates the Illinois Biometric Information Privacy Act, 740 ILCS 14/1 et seq. ("BIPA"), and the Illinois Personal Information Protection Act, 815 ILCS 530/1 et seq. ("PIPA"). The CID demands the production of documents and interrogatory responses relating to MTDC's deployment of a biometric timekeeping and scheduling platform, its data-retention and destruction policies, its employee-consent protocols, and its contractual arrangements with third-party technology vendors. The firm's proposed role would include responding to the CID, negotiating with the Bureau of Civil Rights regarding scope and timing, and defending MTDC in any enforcement action that may follow.
(b) Defense of the Employee Class Action. On April 29, 2024, a putative employee class action was filed in the Circuit Court of Cook County, Chancery Division, bearing Case Number 2024-CH-04417 (the "Class Action"). The complaint asserts claims under BIPA and related state-law privacy and employment theories on behalf of a proposed class of approximately 12,400 current and former MTDC employees. The named plaintiffs allege that MTDC collected fingerprint scans, facial-geometry data, and iris scans without obtaining written informed consent as required by Section 15(b) of BIPA and without publishing a compliant written retention and destruction policy as required by Section 15(a) of BIPA. The firm's proposed role would include defending MTDC through all phases of the Class Action, including class certification, discovery, dispositive motions, trial, and any post-trial proceedings or appeals.
(c) Biometric-Data Remediation Counseling. MTDC has requested advice on the remediation of its biometric-data collection, storage, and processing practices to achieve compliance with BIPA, PIPA, and any other applicable federal and state privacy laws. This work will involve a review of existing policies, data-mapping exercises, vendor-management assessments, and the development of revised consent forms, retention schedules, and destruction protocols.
(d) Cross-Claims and Indemnification Proceedings Against Technology Vendors. MTDC anticipates asserting cross-claims and pursuing contractual indemnification against its principal biometric-technology vendor, Pinnacle Workforce Analytics, Inc. ("Pinnacle"), under the Master Software License and Services Agreement dated June 15, 2021 (the "MSLA"). MTDC contends that Pinnacle designed, deployed, and maintained the TruScan 360 biometric timekeeping platform at issue in both the CID and the Class Action, and that the MSLA contains representations, warranties, and indemnification obligations that may shift liability to Pinnacle. The firm's proposed role would include analyzing the MSLA, formulating and pursuing cross-claims, and managing any related contribution or indemnification proceedings, whether brought within the existing Class Action, as a separate third-party action, or as a claim in a parallel enforcement proceeding.
(e) Employment Counseling Regarding Workforce-Monitoring Policies. In connection with the foregoing matters, MTDC has also requested employment-law counseling concerning its broader workforce-monitoring policies, including video surveillance, GPS tracking of transit vehicles, and electronic-communications monitoring. This advisory work is related to the biometric-data issues at the center of the CID and Class Action and is intended to ensure that MTDC's overall workplace-privacy practices are brought into compliance on a comprehensive basis.
B. Proposed Engagement Team
The following Calderwood & Harkness attorneys are proposed to staff this matter:
Each of these attorneys should be included in the conflicts search. To the extent that any of these attorneys possesses confidential information from a prior or current representation of any party identified in Section III below, such circumstances should be flagged immediately so that the firm can assess whether screening or other measures may be appropriate.
C. Proposed Fee Arrangement
The engagement would be conducted on an hourly-rate basis at the following rates:
• Partner: $1,150 per hour
• Senior Associate: $785 per hour
• Junior Associate: $625 per hour
Based on preliminary scoping, the estimated total fees for the engagement range from approximately $3.5 million to $5.2 million over an anticipated eighteen- to twenty-four-month period. This estimate accounts for the defense of both the CID and the Class Action through resolution, the remediation counseling work, and the cross-claim and indemnification proceedings against Pinnacle. The estimate is subject to revision based on the course of discovery, class-certification proceedings, and the disposition of the regulatory investigation.
D. Referral Source
MTDC was referred to Calderwood & Harkness by Hargrove, Tillman & Reese LLP, through its partner Constance Hargrove. Hargrove, Tillman & Reese serves as MTDC's existing outside litigation counsel for general commercial and governmental-liability matters. Ms. Hargrove determined that MTDC required specialized BIPA and data-privacy defense expertise that fell outside the Hargrove firm's core practice areas and accordingly facilitated an introduction to our Privacy & Data Security practice group. An initial telephone conference among MTDC General Counsel Terrence Whitfield, Constance Hargrove, and Rachel Bernstein took place on May 6, 2024. A follow-up meeting is currently scheduled for May 13, 2024, contingent upon the satisfactory completion of this conflicts search and the firm's clearance of the new matter.
III. Parties and Affiliates to Be Searched
The following parties and individuals should be included in the conflicts search. I have organized them into four categories for ease of reference. Please search on all names, known variations, abbreviations, and "doing business as" designations, as further specified in Section IV below.
A. Prospective Client and Officers / Key Personnel
B. Anticipated Adverse Parties
C. Potential Cross-Claim / Indemnification Targets
D. Related Third Parties and Affiliates
IV. Search Parameters and Special Instructions
In conducting the conflicts search, I ask that your department observe the following parameters and special instructions:
1. Name Variations. Search all known variations, abbreviations, trade names, and "doing business as" designations for each entity listed in Section III. For the prospective client, this includes but is not limited to "Metropolitan Transit Development Corp.," "Metropolitan Transit Development Corporation," "MTDC," "Metro Transit," "Metro Transit Development," and "Metro Transit Dev. Corp." Similar variation searches should be conducted for all other entities.
2. Pinnacle Affiliates, Subsidiaries, and Parent Entities. Search all known affiliates, subsidiaries, parent entities, and predecessor entities of Pinnacle Workforce Analytics, Inc. If the firm's corporate-tree subscription service provides a corporate hierarchy for Pinnacle (EIN: 54-2198437), please run the full tree and search all entities appearing therein. Given the potential for cross-claims against Pinnacle, thoroughness on this point is critical.
3. MTDC Board Members. To the extent publicly available listings of the MTDC Board of Directors can be obtained (e.g., through the MTDC website, SEC EMMA filings for municipal bonds, or Illinois Secretary of State records), please cross-reference those individuals against the firm's databases. Board members of a governmental transit authority may also serve on other boards or hold positions that create conflicts-relevant connections.
4. Current and Archived Records. Include searches in both the current-client database and all closed, archived, or inactive matter records. Matters that have been closed or archived may still give rise to duties under Illinois Rule of Professional Conduct 1.9 (duties to former clients), and it is essential that those records be captured.
5. Historical Representations. Flag any historical representation of, or adverse to, any listed party, regardless of whether the matter is active, closed, dormant, or archived. Each flagged matter should include, at minimum, the matter number, the responsible partner, a brief description of the nature of the representation, the dates of the engagement, and the current status of the matter.
6. Particular Attention to Pinnacle. I wish to emphasize that the proposed engagement may require the firm to take positions materially adverse to Pinnacle Workforce Analytics, Inc. regarding its design, deployment, and maintenance of the TruScan 360 biometric platform. Any existing or prior firm relationship with Pinnacle — whether as a client, an adverse party, a business-development target, a lateral-hire portability client, or in any other capacity — should be flagged with particularity. For any such match, please provide the responsible partner's name, the matter number, the nature and scope of the representation or relationship, the dates of the relationship, and any relevant engagement-letter provisions concerning future-conflicts waivers or consent-to-adversity clauses.
7. Individual Searches. For all individuals listed in Section III (including attorneys at opposing and co-counsel firms), search both the conflicts database and the firm's personnel and alumni records, in the event that any listed individual is a current or former Calderwood & Harkness attorney or professional staff member.
8. Referral-Source Considerations. Although Hargrove, Tillman & Reese LLP is the referral source and is expected to remain as MTDC's general litigation counsel on non-privacy matters, please search the firm and its named partners to confirm that no existing Calderwood & Harkness engagement adverse to Hargrove, Tillman & Reese or its clients creates a conflict or reputational concern.
V. Background Information for Context
The following background information is provided to assist in evaluating any potential conflicts that may be identified and to provide context for the significance of the proposed engagement.
MTDC Operations and Profile. MTDC operates bus, commuter rail, and paratransit services across Cook County and five collar counties (DuPage, Kane, Lake, McHenry, and Will). MTDC serves approximately 1.6 million daily riders and is one of the largest transit authorities in the Midwest. Its annual operating budget is approximately $3.2 billion, funded through a combination of farebox revenue, federal and state transit subsidies, sales-tax allocations, and revenue-bond proceeds. MTDC's annual outside-counsel budget is approximately $14.8 million, distributed across a panel of approximately fifteen law firms. Calderwood & Harkness has not previously served on the MTDC outside-counsel panel.
Genesis of the CID and Class Action. Both the CID and the Class Action arise from MTDC's deployment of Pinnacle's TruScan 360 platform, an AI-powered timekeeping and scheduling system that collects fingerprint scans, facial-geometry measurements, and iris-scan biometric data from employees as part of its workforce-authentication and attendance-tracking functionality. The TruScan 360 platform was deployed across all MTDC facilities beginning in September 2021, pursuant to the MSLA. According to MTDC's preliminary internal review, approximately 12,400 current and former employees have been subject to biometric-data collection through the platform since its deployment. MTDC's initial assessment suggests that certain BIPA-compliance obligations — including the execution of individualized written informed-consent forms and the publication of a publicly available written retention and destruction schedule — may not have been fully satisfied at the time of initial deployment.
Damages Exposure. MTDC's aggregate BIPA statutory-damages exposure has been estimated by Lakefront Actuarial Advisors at between $12.4 million (negligent violations: 12,400 class members × $1,000 per violation under Section 20(1) of BIPA) and $62.0 million (intentional or reckless violations: 12,400 class members × $5,000 per violation under Section 20(2) of BIPA). These figures do not account for potential penalties in the AG enforcement proceeding, which could be pursued under the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq., and could include civil penalties of up to $50,000 per violation (or $100,000 per violation if the affected individual is elderly or disabled). The total exposure, including enforcement penalties and attorneys' fees and costs, could be substantial.
Pinnacle Profile and MSLA Terms. Pinnacle Workforce Analytics, Inc. is a Delaware corporation headquartered in Reston, Virginia, with annual revenue of approximately $485 million. Pinnacle is a leading provider of AI-driven workforce-management solutions to governmental, healthcare, and transportation-sector clients nationwide. The MSLA between Pinnacle and MTDC has a five-year initial term running from June 15, 2021 through June 14, 2026, with an optional three-year renewal at MTDC's election. The total contract value is $8,700,000, or approximately $1,740,000 per year. The MSLA contains representations and warranties by Pinnacle regarding the platform's compliance with applicable law, as well as a broad indemnification clause under which Pinnacle agreed to indemnify MTDC for losses arising from Pinnacle's breach of its obligations under the MSLA or Pinnacle's violation of applicable law in the provision of licensed services. MTDC's General Counsel has indicated that MTDC intends to invoke this indemnification provision aggressively.
AG Enforcement Posture. The Illinois Attorney General's Bureau of Civil Rights has indicated informally — through the CID cover letter and in a telephone conference with MTDC's General Counsel on April 30, 2024 — that Pinnacle may be named as a co-respondent in any formal enforcement action brought by the AG's Office. This circumstance reinforces the need for the firm to have a clear picture of any relationships with Pinnacle before proceeding.
VI. Applicable Ethics Rules
The conflicts analysis arising from this search will be governed by the Illinois Rules of Professional Conduct, as adopted by the Supreme Court of Illinois. The following rules are of particular relevance:
Rule 1.7 — Conflict of Interest: Current Clients. Rule 1.7(a)(1) prohibits a lawyer from representing a client if the representation involves a concurrent conflict of interest — specifically, where the representation of one client will be directly adverse to another client. Rule 1.7(a)(2) addresses material-limitation conflicts, where there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client, a third person, or by a personal interest of the lawyer. Both prongs are relevant here, given the multiplicity of parties involved and the firm's potential need to take positions adverse to Pinnacle while possibly maintaining (or having maintained) a separate relationship with Pinnacle or its affiliates.
Rule 1.9 — Duties to Former Clients. To the extent that any party listed in Section III is a former client of the firm, Rule 1.9 restricts the firm's ability to represent a new client in the same or a substantially related matter in which the new client's interests are materially adverse to the former client's interests, unless the former client gives informed consent confirmed in writing. Any former-client relationship with Pinnacle or with the Illinois Attorney General's Office (in its capacity as a client rather than a sovereign) should be flagged for analysis under this rule.
Rule 1.10 — Imputation of Conflicts of Interest. Under Rule 1.10, a conflict of interest held by any lawyer in the firm is generally imputed to all lawyers in the firm. This rule requires that the conflicts search encompass the knowledge and prior representations of all firm attorneys, including lateral hires who may have brought conflicts from their prior firms. Any imputed conflicts identified through lateral-hire portability disclosures should be flagged and assessed for the availability of screening under Rule 1.10(a)(2).
I request that any match identified through this conflicts search be escalated immediately to me (Rachel Bernstein) by telephone and email. If the match involves a current-client representation or a relationship with Pinnacle Workforce Analytics, Inc. or its affiliates, I further request that the matter be escalated to the Conflicts Committee (Chair: Lawrence Keating, Partner, Professional Responsibility) and to the firm General Counsel (Helen Drazkowski) for review and determination. Time is of the essence, and prompt escalation will enable the engagement team to make an informed intake decision before the May 14 deadline for execution of the engagement letter.
VII. Contact Information and Deadline
Contact for Questions. Any questions regarding this conflicts search request, the parties to be searched, or the scope of the proposed engagement should be directed to me:
Rachel Bernstein Partner, Privacy & Data Security Calderwood & Harkness LLP One North Wacker Drive, Suite 4200 Chicago, IL 60606 Direct Dial: (312) 555-4718
Email: rbernstein@calderwoodharkness.com
I am available by telephone and email throughout the day and after business hours. If I am unavailable, Devon Archer (direct dial: (312) 555-4732; email: darcher@calderwoodharkness.com) may be contacted as an alternate point of contact for this search request.
Requested Turnaround. I respectfully request that preliminary search results be provided within twenty-four (24) hours of receipt of this memorandum — that is, by close of business on Friday, May 10, 2024. A full report, including the results of the expanded-party search (covering Pinnacle affiliates, MTDC board members, and additional name variations), should follow as soon as practicable thereafter. I understand that the expanded search may require additional time and am prepared to work with your team on a reasonable timeline, provided the preliminary results are available by the May 10 deadline.
Distribution. A copy of this memorandum has been provided to the following individuals for awareness of the intake status of the proposed engagement:
• Miriam Calloway, Partner, Healthcare & Life Sciences (proposed billing partner)
• Devon Archer, Associate, Labor & Employment (proposed lead associate)
No copy has been provided to MTDC, Hargrove, Tillman & Reese LLP, or any person outside the firm. This memorandum is an internal attorney work-product communication and should be treated as confidential.
Thank you for your prompt attention to this request. I appreciate the Conflicts & New Business Department's diligence in processing expedited search requests and am happy to provide any additional information that would assist in completing the search.
Rachel Bernstein
Partner, Privacy & Data Security Calderwood & Harkness LLP One North Wacker Drive, Suite 4200 Chicago, IL 60606 Direct Dial: (312) 555-4718
Email: rbernstein@calderwoodharkness.com
CONFIDENTIAL — ATTORNEY WORK PRODUCT. This memorandum is an internal communication of Calderwood & Harkness LLP prepared in anticipation of a new-matter intake determination. It is protected by the attorney work-product doctrine and the attorney-client privilege to the fullest extent permitted by law. Distribution outside the firm is prohibited without the prior written consent of the author. If you have received this memorandum in error, please notify the author immediately and destroy all copies.
Attorney | Role | Practice Group
Rachel Bernstein | Responsible Partner | Privacy & Data Security
Miriam Calloway | Billing Partner | Healthcare & Life Sciences
Devon Archer | Lead Associate | Labor & Employment
Nadia Petrov | Working Associate | Labor & Employment
Name / Entity | Role | Notes
Metropolitan Transit Development Corp. (also: "MTDC"; "Metro Transit"; "Metropolitan Transit Development Corporation") | Prospective client | Illinois governmental transit authority; 550 West Harrison Street, Suite 1400, Chicago, IL 60607; EIN: 36-6041928
Terrence Whitfield | General Counsel, MTDC | Primary contact for the engagement; will serve as the principal liaison between MTDC and the Calderwood & Harkness engagement team
Lucia Marchetti | Chief Information Security Officer, MTDC | Key witness and personnel involved in the procurement and deployment of the TruScan 360 biometric platform; likely deponent in both the CID and the Class Action
Darnell Okafor | Executive Director, MTDC | Chief executive officer of the transit authority; signatory on the Pinnacle MSLA; likely a person of interest in the AG investigation
Name / Entity | Role | Notes
Office of the Illinois Attorney General — Bureau of Civil Rights | Adverse governmental party | Issued CID Ref. CRB-2024-0417 on April 22, 2024; may initiate formal enforcement action
Malcolm Jeffries | Deputy Attorney General for Civil Rights, Illinois AG's Office | Lead AG representative on the CID; signatory on the CID cover letter
Ridgeway & Falk LLP | Outside special counsel retained by the Illinois AG's Office | 401 East Adams Street, Suite 300, Springfield, IL 62701
Diane Falk | Partner, Ridgeway & Falk LLP | Lead partner on the AG's special counsel engagement; co-signatory on certain CID-related correspondence
Kessler, Brandt & O'Neill LLP | Plaintiffs' class counsel in the employee class action (Case No. 2024-CH-04417) | 120 North LaSalle Street, Suite 2200, Chicago, IL 60602
Martin Kessler | Partner, Kessler, Brandt & O'Neill LLP | Lead class counsel
Yolanda Brandt | Partner, Kessler, Brandt & O'Neill LLP | Co-class counsel
Name / Entity | Role | Notes
Pinnacle Workforce Analytics, Inc. | MTDC's former workforce-surveillance technology vendor; potential cross-claim and indemnification target | Delaware corporation; headquarters: 11900 Sunrise Valley Drive, Suite 500, Reston, VA 20191; EIN: 54-2198437; developer and licensor of the TruScan 360 biometric timekeeping and scheduling platform; party to the MSLA dated June 15, 2021 (5-year initial term; $8,700,000 total contract value / approximately $1,740,000 per year). Approximately $485 million in annual revenue.
Gregory Harmon | Chief Executive Officer, Pinnacle Workforce Analytics, Inc. | Signatory on the MSLA; may be a witness or deposition target in cross-claim proceedings
Sandra Yee | General Counsel, Pinnacle Workforce Analytics, Inc. | Primary legal contact at Pinnacle; recipient of MTDC's pre-litigation demand letter dated May 2, 2024
Name / Entity | Role | Notes
Hargrove, Tillman & Reese LLP | MTDC's existing outside litigation counsel; referral source for this engagement | 233 South Wacker Drive, Suite 5600, Chicago, IL 60606
Constance Hargrove | Partner, Hargrove, Tillman & Reese LLP | Lead partner on the MTDC account; facilitated the introduction to Calderwood & Harkness
Meridian Trust National Bank | MTDC's fiscal agent and bond trustee | 135 South LaSalle Street, Chicago, IL 60603; national banking association chartered by the Office of the Comptroller of the Currency
Angela Tran | Chief Fiduciary Officer, Meridian Trust National Bank | Potential contact regarding bond-covenant implications of BIPA liability and any material-adverse-event reporting obligations under MTDC's outstanding revenue-bond indentures
Lakefront Actuarial Advisors, LLC | MTDC's consulting actuary for damages-exposure analysis | 200 East Randolph Street, Suite 1710, Chicago, IL 60601
Felix Drummond, FSA, MAAA | Principal, Lakefront Actuarial Advisors, LLC | Retained by MTDC for BIPA statutory-damages estimation; has prepared preliminary exposure memoranda
Veritas Biometrics Corp. | Pinnacle competitor; not directly a party to the MTDC matters but included for completeness as a Pinnacle-related entity and potential market participant | 8200 Greensboro Drive, Suite 1100, McLean, VA 22102
Randall Cho | Chief Executive Officer, Veritas Biometrics Corp. | Included for search completeness; may have relevance if Pinnacle asserts competitive-harm defenses or if MTDC considers alternative vendor relationships

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