1031-00001 · Kessler, Brandt & O'Neill LLP · documents

new-matter-intake-request-form.docx DOCUMENT Labor & Employment

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Form Version: C&H Form NM-1 (Rev. 03/2023)

CALDERWOOD & HARKNESS LLP

NEW-MATTER INTAKE REQUEST FORM (Form NM-1)

CONFIDENTIAL — ATTORNEY WORK PRODUCT

INSTRUCTIONS: This form must be completed in its entirety and submitted to the Director of Conflicts & New Business before any engagement letter is prepared, any fee arrangement is discussed in binding terms, or any substantive legal work is commenced on behalf of the prospective client. All fields are mandatory unless otherwise indicated. If additional space is required for any section, attach supplemental pages referencing the applicable section number and the assigned Matter Number. Do not commence work on any matter until the Conflicts & New Business Department has issued written clearance and the engagement has been formally authorized in accordance with Firm Policy CNB-4.

SECTION 1: PROSPECTIVE CLIENT INFORMATION

1.1 Full Legal Name of Prospective Client:

Metropolitan Transit Development Corp.

1.2 Short Name / Common Name:

MTDC; Metro Transit

1.3 Entity Type:

Unit of local government; special-purpose transit authority established under the Illinois Local Mass Transit District Act, 70 ILCS 3610/1 et seq. MTDC was created by intergovernmental agreement among participating municipalities in the Chicago metropolitan area and operates as an independent governmental body with the power to issue revenue bonds, levy assessments, and enter into contracts for the provision of mass-transit services within its designated service territory.

1.4 Jurisdiction of Organization:

State of Illinois

1.5 Principal Office Address:

550 West Harrison Street, Suite 1400, Chicago, IL 60607

1.6 Registered Agent Address:

Same as principal office. As a governmental entity organized under Illinois law, MTDC is not required to maintain a registered agent with the Illinois Secretary of State. Service of process is directed to the Office of the General Counsel at the principal office address set forth above.

1.7 Federal Employer Identification Number (EIN):

36-6041928

1.8 Primary Contact Information:

1.9 Secondary Contact Information:

1.10 Executive Director:

Darnell Okafor. Mr. Okafor serves as the chief executive officer of MTDC and reports directly to the MTDC Board of Directors. Per Terrence Whitfield, Mr. Okafor has been briefed on the matters described herein and has authorized MTDC's General Counsel to proceed with the retention of outside counsel for these matters.

1.11 Annual Operating Budget:

Approximately $3.2 billion. MTDC's operating budget is funded through a combination of farebox revenue, federal formula grants received under the Federal Transit Administration's Urbanized Area Formula Grants Program (49 U.S.C. § 5307), a dedicated 1.0% regional sales tax imposed on retail transactions within the MTDC service territory, and annual appropriations from the State of Illinois. MTDC also maintains a separate capital budget funded primarily through revenue bond issuances and federal capital grants.

1.12 Annual Outside-Counsel Budget:

Approximately $14.8 million, per Terrence Whitfield. This figure represents MTDC's total expenditure on external legal services across all practice areas for the fiscal year ending June 30, 2024, and includes litigation defense, labor and employment advisory work, bond counsel fees, real-estate and procurement counseling, and regulatory compliance matters. Terrence Whitfield has indicated that MTDC maintains a panel of approved outside-counsel firms, and that the addition of Calderwood & Harkness LLP to the panel would require approval by the MTDC Board's Legal Affairs Committee.

1.13 Current Outside Counsel (Referring Firm):

Hargrove, Tillman & Reese LLP ("HTR") has served as MTDC's primary outside litigation counsel for approximately eight years and currently handles a portfolio of general litigation matters, including tort defense, employment disputes, and construction-related claims. HTR referred MTDC to Calderwood & Harkness specifically because HTR lacks substantive expertise in data-privacy and biometric-law enforcement defense. Constance Hargrove has communicated to Rachel Bernstein that HTR does not intend to participate as co-counsel in the matters described in Section 3 below, but will continue to serve as MTDC's general litigation counsel on unrelated matters.

1.14 Nature of Referral:

As noted above, HTR referred MTDC to Calderwood & Harkness specifically for data-privacy and biometric-law expertise that HTR does not possess in-house. The referral was initiated by Constance Hargrove following discussions with Terrence Whitfield regarding the Illinois Attorney General's issuance of a Civil Investigative Demand to MTDC and the filing of a putative class action. HTR and MTDC jointly identified Calderwood & Harkness's Privacy & Data Security Practice Group, and specifically Rachel Bernstein's recognized expertise in BIPA defense, as the appropriate resource for these matters. No referral fee, fee-sharing arrangement, or joint-venture arrangement has been discussed or is contemplated.

1.15 Fiscal Agent / Bond Trustee:

This information is noted because material BIPA liability, if established, may trigger reporting obligations under MTDC's Continuing Disclosure Agreement dated as of March 1, 2019 (as amended), and under certain financial covenants contained in MTDC's outstanding revenue bond indentures. Terrence Whitfield has confirmed that MTDC's bond counsel is monitoring the disclosure implications separately, but has requested that Calderwood & Harkness coordinate with Meridian Trust National Bank as necessary regarding the potential materiality of the BIPA exposure described in Section 3.3 below.

SECTION 2: SOURCE OF ENGAGEMENT / HOW CLIENT CAME TO FIRM

2.1 Initial Contact Date:

May 6, 2024. On this date, Terrence Whitfield, General Counsel of MTDC, placed a telephone call to Rachel Bernstein at the firm's Chicago office. The call lasted approximately forty-five minutes. During this initial conversation, Mr. Whitfield provided a general overview of the CID issued by the Illinois Attorney General's office, described the putative class action that had been filed the preceding week, and inquired about the firm's capacity and willingness to undertake the engagement.

2.2 Introduced By:

Constance Hargrove, Partner, Hargrove, Tillman & Reese LLP. Ms. Hargrove contacted Rachel Bernstein by email on May 3, 2024, to introduce the matter informally and to advise that MTDC's General Counsel would be calling to discuss a potential engagement. Ms. Hargrove's email provided a brief summary of the factual background and identified the relevant parties. Rachel Bernstein and Constance Hargrove have a professional relationship dating back approximately six years, having served together on the Chicago Bar Association's Privacy & Technology Committee.

2.3 Reason for Seeking Calderwood & Harkness:

MTDC requires specialized counsel with demonstrated expertise in the defense of enforcement actions and class-action litigation arising under the Illinois Biometric Information Privacy Act, 740 ILCS 14/1 et seq. ("BIPA"), and related state-law data-privacy statutes. Hargrove, Tillman & Reese LLP, MTDC's existing primary outside litigation counsel, does not maintain a dedicated privacy or data-security practice group and does not possess the requisite depth of experience in BIPA defense. Terrence Whitfield specifically cited Rachel Bernstein's successful defense in Ramirez v. Consolidated Logistics Holdings, Inc., No. 2022-CH-06891 (Cir. Ct. Cook Cty.), as a factor in MTDC's decision to approach the firm.

2.4 Prior Relationship with Calderwood & Harkness:

None. Metropolitan Transit Development Corp. is a new prospective client. A preliminary review of the firm's client and matter database conducted by Rachel Bernstein on May 7, 2024, did not identify any prior engagement involving MTDC. The Conflicts & New Business Department is requested to confirm this finding through a comprehensive search as part of the conflicts-clearance process described in Section 7 below.

SECTION 3: PROPOSED ENGAGEMENT DESCRIPTION

3.1 General Description of Matter

Calderwood & Harkness LLP is proposed to serve as lead defense counsel for Metropolitan Transit Development Corp. in connection with a data-privacy enforcement action initiated by the Office of the Illinois Attorney General and related employment litigation arising from MTDC's deployment of a biometric workforce-management platform. The platform at issue is the "TruScan 360" system, developed, sold, and deployed by Pinnacle Workforce Analytics, Inc. ("Pinnacle"), a Delaware corporation headquartered in Reston, Virginia.

The TruScan 360 system was implemented by MTDC beginning in approximately September 2021 pursuant to a Master Software License and Services Agreement dated June 15, 2021, between MTDC and Pinnacle. The system collects, stores, and analyzes biometric identifiers — including fingerprints and facial-geometry scans — from MTDC employees for purposes of workforce time-and-attendance management, facility access control, and internal security monitoring. It is alleged that MTDC's deployment of the TruScan 360 system violated the Illinois Biometric Information Privacy Act ("BIPA"), 740 ILCS 14/1 et seq., and the Illinois Personal Information Protection Act ("PIPA"), 815 ILCS 530/1 et seq., by, among other things, failing to obtain informed written consent from employees prior to the collection of biometric identifiers and biometric information, failing to provide the disclosures required by BIPA Section 15(b), and failing to establish a publicly available data-retention and data-destruction policy as required by BIPA Section 15(a).

The proposed engagement encompasses defense of the Attorney General's enforcement proceedings, defense of a putative employee class action, advisory work on remediation of MTDC's biometric-data practices, potential cross-claims and indemnification proceedings against Pinnacle and other technology vendors, and related employment counseling.

3.2 Specific Scope Components

(a) Defense of Illinois Attorney General CID and Anticipated Enforcement Action

On April 22, 2024, the Bureau of Civil Rights within the Office of the Illinois Attorney General issued a Civil Investigative Demand ("CID") to Metropolitan Transit Development Corp. The CID bears reference number CRB-2024-0417 and was signed by Malcolm Jeffries, Deputy Attorney General for Civil Rights.

The CID alleges that MTDC's deployment of the TruScan 360 biometric workforce-management platform violated BIPA, 740 ILCS 14/15, and the Illinois Personal Information Protection Act, 815 ILCS 530/1 et seq. Specifically, the CID identifies the following categories of alleged violations:

(i) Failure to develop and make publicly available a written policy establishing a retention schedule and guidelines for permanently destroying biometric identifiers and biometric information, in violation of BIPA Section 15(a), 740 ILCS 14/15(a);

(ii) Failure to inform employees in writing that biometric identifiers and biometric information were being collected and stored, and failure to inform employees of the specific purpose and length of term for which their biometric identifiers and biometric information were being collected, stored, and used, in violation of BIPA Section 15(b), 740 ILCS 14/15(b);

(iii) Failure to obtain written releases from employees authorizing MTDC's collection and storage of their biometric identifiers and biometric information, in violation of BIPA Section 15(b), 740 ILCS 14/15(b);

(iv) Dissemination of biometric identifiers and biometric information to third-party vendors, including Pinnacle Workforce Analytics, Inc. and its cloud-hosting subcontractors, without obtaining the requisite consent, in violation of BIPA Section 15(d), 740 ILCS 14/15(d); and

(v) Failure to store, transmit, and protect from disclosure biometric identifiers and biometric information using a reasonable standard of care and in a manner that is the same as or more protective than the manner in which MTDC stores, transmits, and protects other confidential and sensitive information, in violation of BIPA Section 15(e), 740 ILCS 14/15(e).

The CID demands production of documents and electronically stored information within thirty (30) calendar days of service, i.e., by May 22, 2024. Terrence Whitfield has requested that Calderwood & Harkness immediately undertake responsibility for preparing MTDC's response to the CID and for all negotiations with the Attorney General's office regarding the scope and timing of production.

The Attorney General's office has designated outside special counsel for this matter: Ridgeway & Falk LLP, 401 East Adams Street, Suite 300, Springfield, IL 62701. The lead partner on the matter for Ridgeway & Falk is Diane Falk. It is understood that the Attorney General's office frequently retains Ridgeway & Falk for complex data-privacy enforcement matters and that Diane Falk has significant experience in BIPA enforcement litigation.

Terrence Whitfield has further advised that, during a preliminary telephone conference between the Attorney General's office and MTDC on May 2, 2024, Deputy AG Malcolm Jeffries indicated that the Attorney General anticipates filing a formal enforcement action against MTDC in the Circuit Court of Sangamon County if the matter is not resolved through negotiation. The AG's office has also indicated that it may name Pinnacle Workforce Analytics, Inc. as a co-respondent in any such enforcement action, although no CID or other process has yet been directed to Pinnacle by the AG's office, to MTDC's knowledge.

(b) Defense of Employee Class Action

On April 29, 2024, a putative class action was filed against MTDC in the Circuit Court of Cook County, Chancery Division. The case has been assigned Case Number 2024-CH-04417 and is styled Johnson et al. v. Metropolitan Transit Development Corp. The named plaintiffs are three current MTDC employees, represented by class counsel.

The putative class encompasses approximately 12,400 current and former MTDC employees who were required to use the TruScan 360 system as a condition of employment during the period from September 2021 to the present. The class definition as alleged in the complaint covers all MTDC employees whose biometric identifiers or biometric information were collected, captured, received, or otherwise obtained by MTDC through the TruScan 360 platform.

The complaint asserts the following claims:

(i) Violation of BIPA Section 15(a) — failure to establish a publicly available retention and destruction policy for biometric identifiers and biometric information;

(ii) Violation of BIPA Section 15(b) — failure to inform employees in writing and obtain written releases prior to collecting and storing biometric identifiers and biometric information;

(iii) Violation of BIPA Section 15(d) — unauthorized dissemination of biometric identifiers and biometric information to third-party vendors;

(iv) Violation of BIPA Section 15(e) — failure to store, transmit, and protect biometric identifiers and biometric information using a reasonable standard of care; and

(v) Common-law invasion of privacy (intrusion upon seclusion).

Plaintiffs' class counsel is the firm of Kessler, Brandt & O'Neill LLP, located at 120 North LaSalle Street, Suite 2200, Chicago, IL 60602. The lead class counsel is Martin Kessler, and co-counsel is Yolanda Brandt. Kessler, Brandt & O'Neill is recognized as one of the most active plaintiff-side BIPA class-action firms in Illinois and has obtained several significant class-action settlements in BIPA matters over the past three years.

MTDC has not yet filed a responsive pleading. The deadline for MTDC to respond to the complaint is June 3, 2024 (per the standard thirty-day period following service, which was effected on May 3, 2024). Terrence Whitfield has requested that Calderwood & Harkness assume responsibility for all aspects of the defense of this class action, including but not limited to the filing of responsive pleadings, management of discovery, retention and management of expert witnesses, class-certification briefing, and trial preparation.

In addition to the defense of the enforcement action and the class action, MTDC has requested that Calderwood & Harkness provide advisory services regarding the remediation of MTDC's biometric-data collection, storage, dissemination, and destruction practices to achieve compliance with BIPA and the Illinois Personal Information Protection Act. This scope component will include:

(i) Review and assessment of MTDC's current biometric-data practices as implemented through the TruScan 360 platform and any successor systems;

(ii) Development of a written biometric-information retention and destruction policy compliant with BIPA Section 15(a);

(iii) Development of compliant notice and consent protocols for the collection and use of biometric identifiers and biometric information from MTDC employees;

(iv) Review of MTDC's existing agreements with technology vendors to assess contractual provisions relating to biometric-data handling, data security, and indemnification obligations;

(v) Coordination with Lucia Marchetti, MTDC's Chief Information Security Officer, regarding the implementation of technical and administrative safeguards for the protection of biometric data; and

(vi) Preparation of training materials and conducting of training sessions for MTDC's human resources, information technology, and management personnel regarding BIPA compliance requirements.

(d) Potential Cross-Claims and Indemnification Proceedings Against Technology Vendors

MTDC anticipates asserting cross-claims and indemnification demands against certain technology vendors in connection with the matters described above. The primary target of such cross-claims and indemnification demands is Pinnacle Workforce Analytics, Inc. ("Pinnacle").

Pinnacle is a Delaware corporation headquartered at 11900 Sunrise Valley Drive, Suite 500, Reston, VA 20191. Pinnacle's EIN is 54-2198437. The current Chief Executive Officer of Pinnacle is Gregory Harmon, and the current General Counsel is Sandra Yee.

Pinnacle developed, sold, and deployed the TruScan 360 biometric workforce-management platform to MTDC under a Master Software License and Services Agreement ("MSLA") dated June 15, 2021. The key commercial terms of the MSLA are as follows:

• Total Contract Value: $8,700,000 over a five-year initial term

• Annual Contract Value: $1,740,000 per year

• Initial Term: June 15, 2021 through June 14, 2026

• Renewal Option: Optional three-year renewal at MTDC's election, subject to annual rate adjustments not to exceed 3.5% per year

• Scope: License to use the TruScan 360 platform, implementation services, data migration, ongoing technical support and maintenance, and biometric-data hosting services via Pinnacle's cloud infrastructure

Terrence Whitfield has advised that the MSLA contains an indemnification clause (Section 11.2) under which Pinnacle agreed to defend, indemnify, and hold harmless MTDC from and against claims, losses, liabilities, and expenses arising from Pinnacle's breach of the agreement or from Pinnacle's failure to comply with applicable law in the provision of services under the MSLA. Mr. Whitfield believes that MTDC has a strong basis for asserting indemnification claims against Pinnacle on the theory that Pinnacle was responsible for the design, configuration, and deployment of the TruScan 360 system and had an obligation under the MSLA to ensure that the system's biometric-data practices complied with applicable law, including BIPA.

MTDC may also seek to assert cross-claims against Pinnacle's cloud-hosting subcontractors and other third-party vendors that received or processed biometric data in connection with the TruScan 360 system. The identities and contractual relationships of these subcontractors are not yet fully known and will be the subject of investigation during the engagement.

Note regarding Pinnacle as a potential conflict: Rachel Bernstein notes that Pinnacle Workforce Analytics, Inc. is identified herein as both a potential cross-claim/indemnification target and as a party whose product and data practices will necessarily be subject to scrutiny and potentially adverse characterization in the defense of MTDC. The suspected conflict regarding Pinnacle is described in greater detail in Section 7 below.

(e) Related Employment Counseling

MTDC has also requested that Calderwood & Harkness provide advice concerning MTDC's workforce-monitoring policies and their compliance with applicable employment law, including but not limited to the Illinois Employee Credit Privacy Act, the Illinois Workplace Transparency Act, the Illinois Right to Privacy in the Workplace Act, and applicable federal employment statutes. This scope component will include review of MTDC's employee handbook and workforce-monitoring policies, assessment of the lawfulness of MTDC's continued use of biometric workforce-management technology, and guidance regarding employee communications and notifications relating to the matters described herein.

3.3 Estimated BIPA Statutory-Damages Exposure

MTDC's consulting actuary, Lakefront Actuarial Advisors, LLC (200 East Randolph Street, Suite 1710, Chicago, IL 60601; Principal: Felix Drummond, FSA, MAAA), has prepared a preliminary estimate of MTDC's statutory-damages exposure under BIPA Section 20, 740 ILCS 14/20, based on the putative class size and the per-violation damages specified in the statute:

Negligent violation floor (BIPA § 20(1)): 12,400 class members × $1,000 per violation = $12,400,000

Intentional or reckless violation ceiling (BIPA § 20(2)): 12,400 class members × $5,000 per violation = $62,000,000

These estimates assume a single violation per class member. The actual exposure may be significantly higher if the court determines that each discrete instance of biometric-data collection constitutes a separate violation, or if the class period is extended. The Illinois Supreme Court's decision in Cothron v. White Castle System, Inc., 2023 IL 128004, holding that a separate claim accrues under BIPA each time a private entity scans or transmits an individual's biometric identifier or biometric information, creates the possibility that MTDC's exposure could be substantially multiplied. A refined actuarial analysis accounting for the frequency of biometric scans per employee over the relevant period will be prepared following commencement of the engagement and initial document review.

The estimated BIPA exposure range of $12.4 million to $62 million, even on the conservative single-violation-per-class-member basis, represents a material contingent liability for MTDC and may implicate reporting obligations under MTDC's Continuing Disclosure Agreement and bond covenants, as noted in Section 1.15 above.

SECTION 4: PROPOSED ENGAGEMENT TEAM

The following attorneys are proposed to staff the engagement. All proposed team members are based in Calderwood & Harkness's Chicago office.

Notes on Engagement Team:

(a) Rachel Bernstein (Responsible Partner) will serve as the engagement partner and the attorney primarily responsible for the day-to-day management and strategic direction of all matters within the scope of the engagement. Ms. Bernstein has over eighteen years of experience in data-privacy litigation and counseling, with a particular emphasis on BIPA defense. She has served as lead defense counsel in over twenty BIPA matters and has obtained favorable outcomes for clients through dispositive motions, settlements, and trial.

(b) Miriam Calloway (Billing Partner) will serve as the billing partner and will oversee billing, budgeting, and client-relationship management. Ms. Calloway is a partner in the firm's Healthcare & Life Sciences Practice Group and has extensive experience representing governmental and quasi-governmental entities in regulatory and compliance matters. Her inclusion on the team is intended to ensure that the billing arrangements and client-service protocols are appropriate for a governmental-entity client.

(c) Devon Archer (Lead Associate) is a senior associate in the Labor & Employment Practice Group with seven years of experience. Mr. Archer will take primary responsibility for managing discovery, coordinating with MTDC's internal legal and IT teams, and preparing class-certification briefing. Mr. Archer has significant experience in employment-related class-action defense and has worked with Ms. Bernstein on multiple prior BIPA matters.

(d) Nadia Petrov (Working Associate) is an associate in the Labor & Employment Practice Group with four years of experience. Ms. Petrov will support the team on document review, research and drafting, and remediation advisory work. Ms. Petrov has developing expertise in biometric-data privacy law and recently co-authored an article on the implications of the Cothron decision published in the Illinois Bar Journal.

Additional staffing may be required as the engagement progresses, particularly if discovery in the class action is extensive or if cross-claim and indemnification proceedings are commenced against Pinnacle or other vendors. Any additions to the engagement team will be subject to conflicts clearance and client approval.

Proposed hourly rates reflect Calderwood & Harkness's standard government-entity rate schedule, which provides a discount of approximately 15% from the firm's standard commercial rates.

SECTION 5: ESTIMATED FEES AND BILLING ARRANGEMENTS

5.1 Estimated Total Fees:

$3,500,000 to $5,200,000 over a projected engagement period of approximately 18 to 24 months. This estimate encompasses all five scope components described in Section 3.2 above, including defense of the AG enforcement action, defense of the class action, remediation advisory work, cross-claim and indemnification proceedings against technology vendors, and related employment counseling. The estimate is based on the engagement team's preliminary assessment of the likely scope and complexity of the matters and is subject to revision as the engagement progresses and additional information becomes available.

5.2 Billing Arrangement:

Hourly billing at the blended rates set forth in Section 4 above. No contingency, flat-fee, success-fee, or alternative fee arrangement is proposed at this time. However, MTDC's outside-counsel guidelines, once received and reviewed, may require discussion of alternative fee structures, and the engagement team is prepared to explore such structures if requested by the client or required by MTDC's procurement policies.

5.3 Rate Basis:

All proposed hourly rates are based on Calderwood & Harkness's standard government-entity rate schedule, which is applicable to engagements by federal, state, and local governmental entities and authorities. The government-entity rates represent an approximate 15% discount from the firm's standard commercial hourly rates.

5.4 Anticipated Disbursements:

Disbursements and out-of-pocket expenses will be estimated separately following commencement of the engagement and will be billed in accordance with the firm's standard disbursement policies. Anticipated categories of disbursements include, but are not limited to:

(i) Expert fees — actuarial consulting (Lakefront Actuarial Advisors, LLC, or such other actuarial firm as may be retained), forensic information-technology consulting, and e-discovery vendor costs;

(ii) Court costs — filing fees, service-of-process charges, and court-reporter fees;

(iii) Travel — airfare, lodging, ground transportation, and meals for travel related to court appearances, depositions, and client meetings outside the Chicago metropolitan area (including travel to Springfield for proceedings before the Attorney General's office or the Sangamon County circuit court);

(iv) Copying, printing, and document-production costs;

(v) Database and research charges (Westlaw, Sundial Solutions, PACER, etc.); and

(vi) Courier and delivery charges.

5.5 Billing Frequency:

Monthly. Invoices will be prepared and submitted in accordance with the firm's standard billing cycle, which closes on the last business day of each calendar month, with invoices issued within fifteen (15) business days following the close of the billing period. Payment terms will be set forth in the engagement letter.

5.6 Special Billing Considerations:

MTDC is a governmental entity subject to Illinois procurement law and regulations, including the Illinois Procurement Code, 30 ILCS 500/1 et seq., to the extent applicable. The engagement letter will need to address the following considerations:

(a) Compliance with any applicable competitive-procurement or sole-source-procurement requirements under MTDC's procurement policies and Illinois law;

(b) The potential applicability of the Illinois Freedom of Information Act, 5 ILCS 140/1 et seq. ("FOIA"), to invoices, billing records, and other engagement-related documents in MTDC's possession;

(c) MTDC's appropriation and expenditure-authority limitations, including any requirement for specific budget authorization or board approval for outside-counsel expenditures exceeding designated thresholds;

(d) Prompt-payment requirements applicable to Illinois governmental entities under the State Prompt Payment Act, 30 ILCS 540/1 et seq., or any analogous MTDC-specific payment policy; and

(e) Any outside-counsel billing guidelines or litigation-management protocols adopted by MTDC that may impose requirements regarding staffing levels, task-based billing codes, prior-approval thresholds for certain categories of work, or caps on reimbursable disbursements.

Terrence Whitfield has indicated that MTDC maintains a set of outside-counsel guidelines that will be provided to Calderwood & Harkness upon execution of an engagement letter. These guidelines will be reviewed by Rachel Bernstein and Miriam Calloway upon receipt, and any necessary modifications to the fee and billing arrangements will be discussed with MTDC at that time.

SECTION 6: IDENTIFICATION OF ADVERSE AND INTERESTED PARTIES (FOR CONFLICTS SEARCH)

The following parties are identified for purposes of the firm's conflicts search. The Conflicts & New Business Department is requested to search all firm databases — including the client and matter database, lateral-hire conflicts records, personal conflicts disclosures, and financial systems — for all parties listed below, including all known affiliates, subsidiaries, parent entities, and related persons.

6.1 Adverse Parties — Direct

6.2 Adverse Parties — Potential (Cross-Claim / Indemnification Targets)

Note: Additional third-party vendors and cloud-hosting subcontractors utilized by Pinnacle in connection with the TruScan 360 platform may be identified as potential cross-claim and indemnification targets as the engagement progresses. Their identities are not yet known. Supplemental conflicts submissions will be made as additional parties are identified.

6.3 Interested / Related Parties

6.4 MTDC Officers and Board Members to Search

The following MTDC officers and key personnel should be included in the conflicts search:

(i) Terrence Whitfield — General Counsel

(ii) Lucia Marchetti — Chief Information Security Officer

(iii) Darnell Okafor — Executive Director

Note: The full roster of MTDC Board of Directors members has not yet been provided by MTDC. Rachel Bernstein has requested this information from Terrence Whitfield and expects to receive it within the next several business days. Upon receipt, the board roster will be provided to Colleen Farrow's team for inclusion in a Round 2 conflicts search. The Conflicts & New Business Department should proceed with the initial search based on the parties identified above and should plan for a supplemental search upon receipt of the board roster and any additional parties identified through further investigation.

SECTION 7: KNOWN OR SUSPECTED CONFLICTS

7.1 Suspected Conflict — Pinnacle Workforce Analytics, Inc.

Rachel Bernstein identifies the following suspected conflict for immediate investigation by the Conflicts & New Business Department:

Pinnacle Workforce Analytics, Inc. is listed in Section 6.2 above as a potential cross-claim and indemnification target in the matters described in Section 3. Rachel Bernstein notes that Pinnacle may be an existing client of Calderwood & Harkness LLP. Specifically, Ms. Bernstein recalls that the firm's intellectual Property Litigation Practice Group may have represented or may currently represent Pinnacle in connection with patent-infringement litigation, and that the firm's Technology Transactions Practice Group may have advised Pinnacle on commercial licensing matters. Ms. Bernstein requests immediate verification of the firm's current and historical relationships with Pinnacle.

The nature of the suspected conflict is significant. Pinnacle's TruScan 360 platform is the biometric workforce-management system at the center of both the Attorney General's Civil Investigative Demand and the putative employee class action. Any defense of MTDC will necessarily involve detailed scrutiny of the TruScan 360 system's design, configuration, data-collection practices, and compliance (or noncompliance) with BIPA. Effective defense of MTDC may require Calderwood & Harkness to characterize Pinnacle's product and services in terms adverse to Pinnacle — for example, by arguing that Pinnacle bore responsibility for ensuring BIPA compliance under the MSLA, that Pinnacle's representations regarding the TruScan 360 system's legal compliance were inaccurate, or that Pinnacle's deployment methodology created the conditions giving rise to the alleged BIPA violations.

Furthermore, MTDC has specifically requested that Calderwood & Harkness advise on and pursue cross-claims and indemnification demands against Pinnacle under the MSLA. These proceedings would be directly adverse to Pinnacle and would require Calderwood & Harkness to advocate against Pinnacle's interests.

If the conflicts search confirms that Pinnacle is or has been a firm client, Rachel Bernstein requests that the matter be referred to the Conflicts Committee for review and determination of whether the engagement may proceed, whether an ethical screen or other mitigation measure is available, or whether informed written consent from one or both affected clients may be sought and obtained under Illinois Rule of Professional Conduct 1.7. Ms. Bernstein recognizes that, depending on the nature and scope of the firm's relationship with Pinnacle, the conflict may be non-consentable if the representation of MTDC would involve the assertion of claims against Pinnacle in the same proceeding.

7.2 Action Requested

The Conflicts & New Business Department is requested to conduct a comprehensive conflicts search across all firm databases, including but not limited to the following:

(a) The firm's client and matter database (including active, inactive, and closed matters);

(b) Lateral-hire conflicts records for all attorneys who have joined the firm within the past five years;

(d) The firm's financial and billing systems (to identify any billing relationships with parties listed in Section 6); and

(e) The firm's marketing and business-development records (to identify any pitch activity, proposal submissions, or business-development contacts involving parties listed in Section 6).

The search should encompass all names, aliases, trade names, and known affiliates of each party listed in Section 6. Rachel Bernstein requests that the results of the conflicts search be reported to her and to the Chair of the Conflicts Committee within forty-eight (48) hours of submission of this form, given the time-sensitive nature of the CID response deadline (May 22, 2024) and the pending deadline to file a responsive pleading in the class action (June 3, 2024).

SECTION 8: ENGAGEMENT LETTER STATUS

8.1 Current Status:

Not yet prepared. Preparation of the engagement letter is pending completion of the conflicts-clearance process described in Sections 6 and 7 above. No draft engagement letter has been circulated to the prospective client, and no binding fee arrangement has been entered into or discussed in binding terms.

8.2 Special Considerations for Engagement Letter:

The following special considerations will need to be addressed in the engagement letter:

(a) Governmental-Entity Procurement Requirements. MTDC is a unit of local government organized under Illinois law. The engagement letter must address any applicable procurement requirements under MTDC's own procurement policies and, to the extent applicable, the Illinois Procurement Code, 30 ILCS 500/1 et seq. Terrence Whitfield has indicated that the retention of outside counsel for litigation defense matters may qualify for a professional-services exemption from competitive-bidding requirements, but that MTDC's Legal Affairs Committee must approve the engagement and the fee arrangement before work may commence. The engagement letter should be structured to accommodate this approval process.

(b) FOIA and Public-Records Implications. As a governmental entity, MTDC is subject to the Illinois Freedom of Information Act, 5 ILCS 140/1 et seq. The engagement letter should address the potential applicability of FOIA to the firm's invoices, billing records, correspondence, and other engagement-related documents in MTDC's possession. While attorney-client privilege and work-product protections may shield many such documents from FOIA disclosure, the engagement letter should include appropriate provisions regarding the handling and marking of privileged and work-product materials, and should address the protocol for responding to FOIA requests that may encompass engagement-related documents.

(c) Scope Limitations. If the conflicts-clearance process results in a determination that Calderwood & Harkness may represent MTDC in some but not all of the scope components described in Section 3.2 — for example, if an unresolvable conflict precludes the firm from pursuing cross-claims against Pinnacle — the engagement letter will need to clearly delineate the scope of the engagement and identify any matters excluded from the scope. The engagement letter should include appropriate provisions regarding MTDC's understanding that excluded matters will need to be handled by other counsel.

(d) Outside-Counsel Guidelines. MTDC maintains a set of outside-counsel guidelines that govern the retention and management of external legal service providers. These guidelines have been referenced by Terrence Whitfield but have not yet been provided to Calderwood & Harkness. Upon receipt, the guidelines will be reviewed by Rachel Bernstein and Miriam Calloway, and the engagement letter will incorporate or reference compliance with the applicable provisions of the guidelines.

(e) Board Approval. Terrence Whitfield has advised that the MTDC Board of Directors' Legal Affairs Committee must approve outside-counsel engagements involving estimated fees in excess of $500,000. Given the estimated fee range of $3.5 million to $5.2 million, board approval will be required. The engagement letter should address the effective date of the engagement in relation to the board-approval process and should specify whether any limited-scope work (such as preparation of the CID response) may be undertaken prior to formal board approval, subject to appropriate authorization from MTDC's General Counsel.

SECTION 9: APPROVALS AND ROUTING

Routing Instructions: Upon completion of the conflicts search, this form and the search results should be returned to Rachel Bernstein and forwarded to the Chair of the Conflicts Committee if Committee review is required. If no conflicts are identified and no Committee review is required, Colleen Farrow is authorized to grant conflicts clearance and to authorize opening of the matter in the firm's systems, at which point Rachel Bernstein will proceed with preparation of the engagement letter for review by the firm's General Counsel and submission to MTDC.

SECTION 10: CERTIFICATION

I, Rachel Bernstein, Partner at Calderwood & Harkness LLP, hereby certify as follows in connection with this New-Matter Intake Request Form (Form NM-1), Matter No. 1031-00001:

1. The information provided in this form is complete and accurate to the best of my knowledge as of the date of submission.

2. I have identified all adverse and interested parties known to me in connection with this matter in Section 6 of this form and have made a diligent effort to identify all such parties based on the information available to me at this time.

3. I have disclosed all known or suspected conflicts of interest in Section 7 of this form, including the suspected conflict relating to Pinnacle Workforce Analytics, Inc.

4. I understand and acknowledge that no substantive legal work may be commenced on behalf of Metropolitan Transit Development Corp. in connection with this matter until the conflicts-clearance process is complete and the engagement has been formally approved in accordance with Calderwood & Harkness LLP Firm Policy CNB-4.

5. I understand and acknowledge that if the conflicts-clearance process identifies a conflict that cannot be resolved, the engagement may not proceed, or the scope of the engagement may be narrowed, and I will promptly inform the prospective client of any such determination.

6. I will promptly notify the Conflicts & New Business Department of any additional adverse or interested parties, or any additional known or suspected conflicts, that come to my attention after the submission of this form.

CALDERWOOD & HARKNESS LLP

By: ________

Name: Rachel Bernstein

Title: Partner, Privacy & Data Security Practice Group

Date: May 9, 2024

CONFIDENTIAL — ATTORNEY WORK PRODUCT

This form is confidential attorney work product of Calderwood & Harkness LLP. It is intended solely for internal use in connection with the firm's conflicts-clearance and new-business intake processes. This form and its contents are protected by the attorney-client privilege, the work-product doctrine, and all other applicable privileges and protections. Any unauthorized disclosure, distribution, or copying of this form or its contents is strictly prohibited.

Route completed forms to: Colleen Farrow, Director of Conflicts & New Business, Calderwood & Harkness LLP, 600 Lexington Avenue, 38th Floor, New York, NY 10022, or via the firm's internal secure submission portal (accessible at https://intake.calderwoodharkness.com).

C&H Form NM-1 (Rev. 03/2023) — Matter No. 1031-00001

Assigned Matter Number:	1031-00001
Date of Submission:	May 9, 2024
Submitted By:	Rachel Bernstein, Partner, Privacy & Data Security Practice Group
Office:	Calderwood & Harkness LLP, Chicago Office — One North Wacker Drive, Suite 4200, Chicago, IL 60606
Submitted To:	Colleen Farrow, Director, Conflicts & New Business
Name:	Terrence Whitfield
Title:	General Counsel
Phone:	(312) 555-0184
Email:	twhitfield@mtdc.gov
Name:	Lucia Marchetti
Title:	Chief Information Security Officer
Phone:	(312) 555-0227
Email:	lmarchetti@mtdc.gov
Firm Name:	Hargrove, Tillman & Reese LLP
Address:	233 South Wacker Drive, Suite 5600, Chicago, IL 60606
Lead Partner:	Constance Hargrove
Name:	Meridian Trust National Bank
Address:	135 South LaSalle Street, Chicago, IL 60603
Chief Fiduciary Officer:	Angela Tran
Role	Name	Practice Group	Office	Proposed Hourly Rate
Responsible Partner	Rachel Bernstein	Privacy & Data Security	Chicago	$1,150/hr
Billing Partner	Miriam Calloway	Healthcare & Life Sciences	Chicago	$1,150/hr
Lead Associate	Devon Archer	Labor & Employment	Chicago	$785/hr
Working Associate	Nadia Petrov	Labor & Employment	Chicago	$625/hr
Party Name	Role in Matter	Address

Office of the Illinois Attorney General, Bureau of Civil Rights	Governmental adverse party; issued CID No. CRB-2024-0417 to MTDC; anticipated enforcement plaintiff	100 West Randolph Street, 11th Floor, Chicago, IL 60601; 500 South Second Street, Springfield, IL 62701
Malcolm Jeffries	Deputy Attorney General for Civil Rights, Office of the Illinois Attorney General; signatory on the CID	Office of the Illinois Attorney General, Springfield, IL
Ridgeway & Falk LLP	Outside special counsel retained by the Illinois AG's office for this matter	401 East Adams Street, Suite 300, Springfield, IL 62701
Diane Falk	Lead partner at Ridgeway & Falk LLP on this matter	Same as Ridgeway & Falk LLP
Putative class of approximately 12,400 current and former MTDC employees	Class-action plaintiffs in Case No. 2024-CH-04417 (Cir. Ct. Cook Cty., Chancery Div.)	N/A (individual addresses not yet known)
Kessler, Brandt & O'Neill LLP	Plaintiffs' class counsel in Case No. 2024-CH-04417	120 North LaSalle Street, Suite 2200, Chicago, IL 60602
Martin Kessler	Lead class counsel, Kessler, Brandt & O'Neill LLP	Same as Kessler, Brandt & O'Neill LLP
Yolanda Brandt	Co-counsel, Kessler, Brandt & O'Neill LLP	Same as Kessler, Brandt & O'Neill LLP
Party Name	Role in Matter	Address
Pinnacle Workforce Analytics, Inc.	Former workforce-surveillance technology vendor; developer and deployer of the TruScan 360 biometric platform; potential cross-claim and indemnification target under the MSLA dated June 15, 2021	11900 Sunrise Valley Drive, Suite 500, Reston, VA 20191
Gregory Harmon	Chief Executive Officer, Pinnacle Workforce Analytics, Inc.	Same as Pinnacle
Sandra Yee	General Counsel, Pinnacle Workforce Analytics, Inc.	Same as Pinnacle
Party Name	Role in Matter	Address
Hargrove, Tillman & Reese LLP	MTDC's existing outside litigation counsel; referring firm	233 South Wacker Drive, Suite 5600, Chicago, IL 60606
Constance Hargrove	Lead partner at HTR; referred MTDC to Calderwood & Harkness	Same as HTR
Meridian Trust National Bank	MTDC's fiscal agent and bond trustee	135 South LaSalle Street, Chicago, IL 60603
Angela Tran	Chief Fiduciary Officer, Meridian Trust National Bank	Same as Meridian Trust
Lakefront Actuarial Advisors, LLC	MTDC's consulting actuary; prepared preliminary BIPA exposure estimate	200 East Randolph Street, Suite 1710, Chicago, IL 60601
Felix Drummond, FSA, MAAA	Principal, Lakefront Actuarial Advisors, LLC	Same as Lakefront
Veritas Biometrics Corp.	Pinnacle competitor; third party that is named as a defendant in separate patent litigation brought by Pinnacle (included because Veritas may be relevant to the factual background of the TruScan 360 platform's development and deployment and because Calderwood & Harkness may have a relationship with Veritas or its counsel)	8200 Greensboro Drive, Suite 1100, McLean, VA 22102
Randall Cho	Chief Executive Officer, Veritas Biometrics Corp.	Same as Veritas
Whitmore & Sato LLP	Outside counsel for Veritas Biometrics Corp.	999 Waterside Drive, Suite 600, Norfolk, VA 23510
Akira Sato	Partner, Whitmore & Sato LLP; lead counsel for Veritas	Same as Whitmore & Sato LLP
Step	Name / Title	Date	Status
Requesting Partner Signature	Rachel Bernstein, Partner	May 9, 2024	Completed

Billing Partner Acknowledgment	Miriam Calloway, Partner	May 9, 2024	Completed
Conflicts & New Business — Received By	Colleen Farrow, Director, Conflicts & New Business	May 9, 2024	Completed
Conflicts Search Requested	Colleen Farrow	May 9, 2024	Initiated
Conflicts Search Completed	—	—	Pending
Conflicts Committee Review Required	—	—	To be determined based on search results
Final Approval — Engagement Authorized	—	—	Pending
Matter Opened in Firm Systems	—	—	Pending conflicts clearance

Form Version: C&H Form NM-1 (Rev. 03/2023)
CALDERWOOD & HARKNESS LLP
NEW-MATTER INTAKE REQUEST FORM (Form NM-1)
CONFIDENTIAL — ATTORNEY WORK PRODUCT
INSTRUCTIONS: This form must be completed in its entirety and submitted to the Director of Conflicts & New Business before any engagement letter is prepared, any fee arrangement is discussed in binding terms, or any substantive legal work is commenced on behalf of the prospective client. All fields are mandatory unless otherwise indicated. If additional space is required for any section, attach supplemental pages referencing the applicable section number and the assigned Matter Number. Do not commence work on any matter until the Conflicts & New Business Department has issued written clearance and the engagement has been formally authorized in accordance with Firm Policy CNB-4.
SECTION 1: PROSPECTIVE CLIENT INFORMATION
1.1 Full Legal Name of Prospective Client:
Metropolitan Transit Development Corp.
1.2 Short Name / Common Name:
MTDC; Metro Transit
1.3 Entity Type:
Unit of local government; special-purpose transit authority established under the Illinois Local Mass Transit District Act, 70 ILCS 3610/1 et seq. MTDC was created by intergovernmental agreement among participating municipalities in the Chicago metropolitan area and operates as an independent governmental body with the power to issue revenue bonds, levy assessments, and enter into contracts for the provision of mass-transit services within its designated service territory.
1.4 Jurisdiction of Organization:
State of Illinois
1.5 Principal Office Address:
550 West Harrison Street, Suite 1400, Chicago, IL 60607
1.6 Registered Agent Address:
Same as principal office. As a governmental entity organized under Illinois law, MTDC is not required to maintain a registered agent with the Illinois Secretary of State. Service of process is directed to the Office of the General Counsel at the principal office address set forth above.
1.7 Federal Employer Identification Number (EIN):
36-6041928
1.8 Primary Contact Information:
1.9 Secondary Contact Information:
1.10 Executive Director:
Darnell Okafor. Mr. Okafor serves as the chief executive officer of MTDC and reports directly to the MTDC Board of Directors. Per Terrence Whitfield, Mr. Okafor has been briefed on the matters described herein and has authorized MTDC's General Counsel to proceed with the retention of outside counsel for these matters.
1.11 Annual Operating Budget:
Approximately $3.2 billion. MTDC's operating budget is funded through a combination of farebox revenue, federal formula grants received under the Federal Transit Administration's Urbanized Area Formula Grants Program (49 U.S.C. § 5307), a dedicated 1.0% regional sales tax imposed on retail transactions within the MTDC service territory, and annual appropriations from the State of Illinois. MTDC also maintains a separate capital budget funded primarily through revenue bond issuances and federal capital grants.
1.12 Annual Outside-Counsel Budget:
Approximately $14.8 million, per Terrence Whitfield. This figure represents MTDC's total expenditure on external legal services across all practice areas for the fiscal year ending June 30, 2024, and includes litigation defense, labor and employment advisory work, bond counsel fees, real-estate and procurement counseling, and regulatory compliance matters. Terrence Whitfield has indicated that MTDC maintains a panel of approved outside-counsel firms, and that the addition of Calderwood & Harkness LLP to the panel would require approval by the MTDC Board's Legal Affairs Committee.
1.13 Current Outside Counsel (Referring Firm):
Hargrove, Tillman & Reese LLP ("HTR") has served as MTDC's primary outside litigation counsel for approximately eight years and currently handles a portfolio of general litigation matters, including tort defense, employment disputes, and construction-related claims. HTR referred MTDC to Calderwood & Harkness specifically because HTR lacks substantive expertise in data-privacy and biometric-law enforcement defense. Constance Hargrove has communicated to Rachel Bernstein that HTR does not intend to participate as co-counsel in the matters described in Section 3 below, but will continue to serve as MTDC's general litigation counsel on unrelated matters.
1.14 Nature of Referral:
As noted above, HTR referred MTDC to Calderwood & Harkness specifically for data-privacy and biometric-law expertise that HTR does not possess in-house. The referral was initiated by Constance Hargrove following discussions with Terrence Whitfield regarding the Illinois Attorney General's issuance of a Civil Investigative Demand to MTDC and the filing of a putative class action. HTR and MTDC jointly identified Calderwood & Harkness's Privacy & Data Security Practice Group, and specifically Rachel Bernstein's recognized expertise in BIPA defense, as the appropriate resource for these matters. No referral fee, fee-sharing arrangement, or joint-venture arrangement has been discussed or is contemplated.
1.15 Fiscal Agent / Bond Trustee:
This information is noted because material BIPA liability, if established, may trigger reporting obligations under MTDC's Continuing Disclosure Agreement dated as of March 1, 2019 (as amended), and under certain financial covenants contained in MTDC's outstanding revenue bond indentures. Terrence Whitfield has confirmed that MTDC's bond counsel is monitoring the disclosure implications separately, but has requested that Calderwood & Harkness coordinate with Meridian Trust National Bank as necessary regarding the potential materiality of the BIPA exposure described in Section 3.3 below.
SECTION 2: SOURCE OF ENGAGEMENT / HOW CLIENT CAME TO FIRM
2.1 Initial Contact Date:
May 6, 2024. On this date, Terrence Whitfield, General Counsel of MTDC, placed a telephone call to Rachel Bernstein at the firm's Chicago office. The call lasted approximately forty-five minutes. During this initial conversation, Mr. Whitfield provided a general overview of the CID issued by the Illinois Attorney General's office, described the putative class action that had been filed the preceding week, and inquired about the firm's capacity and willingness to undertake the engagement.
2.2 Introduced By:
Constance Hargrove, Partner, Hargrove, Tillman & Reese LLP. Ms. Hargrove contacted Rachel Bernstein by email on May 3, 2024, to introduce the matter informally and to advise that MTDC's General Counsel would be calling to discuss a potential engagement. Ms. Hargrove's email provided a brief summary of the factual background and identified the relevant parties. Rachel Bernstein and Constance Hargrove have a professional relationship dating back approximately six years, having served together on the Chicago Bar Association's Privacy & Technology Committee.
2.3 Reason for Seeking Calderwood & Harkness:
MTDC requires specialized counsel with demonstrated expertise in the defense of enforcement actions and class-action litigation arising under the Illinois Biometric Information Privacy Act, 740 ILCS 14/1 et seq. ("BIPA"), and related state-law data-privacy statutes. Hargrove, Tillman & Reese LLP, MTDC's existing primary outside litigation counsel, does not maintain a dedicated privacy or data-security practice group and does not possess the requisite depth of experience in BIPA defense. Terrence Whitfield specifically cited Rachel Bernstein's successful defense in Ramirez v. Consolidated Logistics Holdings, Inc., No. 2022-CH-06891 (Cir. Ct. Cook Cty.), as a factor in MTDC's decision to approach the firm.
2.4 Prior Relationship with Calderwood & Harkness:
None. Metropolitan Transit Development Corp. is a new prospective client. A preliminary review of the firm's client and matter database conducted by Rachel Bernstein on May 7, 2024, did not identify any prior engagement involving MTDC. The Conflicts & New Business Department is requested to confirm this finding through a comprehensive search as part of the conflicts-clearance process described in Section 7 below.
SECTION 3: PROPOSED ENGAGEMENT DESCRIPTION
3.1 General Description of Matter
Calderwood & Harkness LLP is proposed to serve as lead defense counsel for Metropolitan Transit Development Corp. in connection with a data-privacy enforcement action initiated by the Office of the Illinois Attorney General and related employment litigation arising from MTDC's deployment of a biometric workforce-management platform. The platform at issue is the "TruScan 360" system, developed, sold, and deployed by Pinnacle Workforce Analytics, Inc. ("Pinnacle"), a Delaware corporation headquartered in Reston, Virginia.
The TruScan 360 system was implemented by MTDC beginning in approximately September 2021 pursuant to a Master Software License and Services Agreement dated June 15, 2021, between MTDC and Pinnacle. The system collects, stores, and analyzes biometric identifiers — including fingerprints and facial-geometry scans — from MTDC employees for purposes of workforce time-and-attendance management, facility access control, and internal security monitoring. It is alleged that MTDC's deployment of the TruScan 360 system violated the Illinois Biometric Information Privacy Act ("BIPA"), 740 ILCS 14/1 et seq., and the Illinois Personal Information Protection Act ("PIPA"), 815 ILCS 530/1 et seq., by, among other things, failing to obtain informed written consent from employees prior to the collection of biometric identifiers and biometric information, failing to provide the disclosures required by BIPA Section 15(b), and failing to establish a publicly available data-retention and data-destruction policy as required by BIPA Section 15(a).
The proposed engagement encompasses defense of the Attorney General's enforcement proceedings, defense of a putative employee class action, advisory work on remediation of MTDC's biometric-data practices, potential cross-claims and indemnification proceedings against Pinnacle and other technology vendors, and related employment counseling.
3.2 Specific Scope Components
(a) Defense of Illinois Attorney General CID and Anticipated Enforcement Action
On April 22, 2024, the Bureau of Civil Rights within the Office of the Illinois Attorney General issued a Civil Investigative Demand ("CID") to Metropolitan Transit Development Corp. The CID bears reference number CRB-2024-0417 and was signed by Malcolm Jeffries, Deputy Attorney General for Civil Rights.
The CID alleges that MTDC's deployment of the TruScan 360 biometric workforce-management platform violated BIPA, 740 ILCS 14/15, and the Illinois Personal Information Protection Act, 815 ILCS 530/1 et seq. Specifically, the CID identifies the following categories of alleged violations:
(i) Failure to develop and make publicly available a written policy establishing a retention schedule and guidelines for permanently destroying biometric identifiers and biometric information, in violation of BIPA Section 15(a), 740 ILCS 14/15(a);
(ii) Failure to inform employees in writing that biometric identifiers and biometric information were being collected and stored, and failure to inform employees of the specific purpose and length of term for which their biometric identifiers and biometric information were being collected, stored, and used, in violation of BIPA Section 15(b), 740 ILCS 14/15(b);
(iii) Failure to obtain written releases from employees authorizing MTDC's collection and storage of their biometric identifiers and biometric information, in violation of BIPA Section 15(b), 740 ILCS 14/15(b);
(iv) Dissemination of biometric identifiers and biometric information to third-party vendors, including Pinnacle Workforce Analytics, Inc. and its cloud-hosting subcontractors, without obtaining the requisite consent, in violation of BIPA Section 15(d), 740 ILCS 14/15(d); and
(v) Failure to store, transmit, and protect from disclosure biometric identifiers and biometric information using a reasonable standard of care and in a manner that is the same as or more protective than the manner in which MTDC stores, transmits, and protects other confidential and sensitive information, in violation of BIPA Section 15(e), 740 ILCS 14/15(e).
The CID demands production of documents and electronically stored information within thirty (30) calendar days of service, i.e., by May 22, 2024. Terrence Whitfield has requested that Calderwood & Harkness immediately undertake responsibility for preparing MTDC's response to the CID and for all negotiations with the Attorney General's office regarding the scope and timing of production.
The Attorney General's office has designated outside special counsel for this matter: Ridgeway & Falk LLP, 401 East Adams Street, Suite 300, Springfield, IL 62701. The lead partner on the matter for Ridgeway & Falk is Diane Falk. It is understood that the Attorney General's office frequently retains Ridgeway & Falk for complex data-privacy enforcement matters and that Diane Falk has significant experience in BIPA enforcement litigation.
Terrence Whitfield has further advised that, during a preliminary telephone conference between the Attorney General's office and MTDC on May 2, 2024, Deputy AG Malcolm Jeffries indicated that the Attorney General anticipates filing a formal enforcement action against MTDC in the Circuit Court of Sangamon County if the matter is not resolved through negotiation. The AG's office has also indicated that it may name Pinnacle Workforce Analytics, Inc. as a co-respondent in any such enforcement action, although no CID or other process has yet been directed to Pinnacle by the AG's office, to MTDC's knowledge.
(b) Defense of Employee Class Action
On April 29, 2024, a putative class action was filed against MTDC in the Circuit Court of Cook County, Chancery Division. The case has been assigned Case Number 2024-CH-04417 and is styled Johnson et al. v. Metropolitan Transit Development Corp. The named plaintiffs are three current MTDC employees, represented by class counsel.
The putative class encompasses approximately 12,400 current and former MTDC employees who were required to use the TruScan 360 system as a condition of employment during the period from September 2021 to the present. The class definition as alleged in the complaint covers all MTDC employees whose biometric identifiers or biometric information were collected, captured, received, or otherwise obtained by MTDC through the TruScan 360 platform.
The complaint asserts the following claims:
(i) Violation of BIPA Section 15(a) — failure to establish a publicly available retention and destruction policy for biometric identifiers and biometric information;
(ii) Violation of BIPA Section 15(b) — failure to inform employees in writing and obtain written releases prior to collecting and storing biometric identifiers and biometric information;
(iii) Violation of BIPA Section 15(d) — unauthorized dissemination of biometric identifiers and biometric information to third-party vendors;
(iv) Violation of BIPA Section 15(e) — failure to store, transmit, and protect biometric identifiers and biometric information using a reasonable standard of care; and
(v) Common-law invasion of privacy (intrusion upon seclusion).
Plaintiffs' class counsel is the firm of Kessler, Brandt & O'Neill LLP, located at 120 North LaSalle Street, Suite 2200, Chicago, IL 60602. The lead class counsel is Martin Kessler, and co-counsel is Yolanda Brandt. Kessler, Brandt & O'Neill is recognized as one of the most active plaintiff-side BIPA class-action firms in Illinois and has obtained several significant class-action settlements in BIPA matters over the past three years.
MTDC has not yet filed a responsive pleading. The deadline for MTDC to respond to the complaint is June 3, 2024 (per the standard thirty-day period following service, which was effected on May 3, 2024). Terrence Whitfield has requested that Calderwood & Harkness assume responsibility for all aspects of the defense of this class action, including but not limited to the filing of responsive pleadings, management of discovery, retention and management of expert witnesses, class-certification briefing, and trial preparation.
(c) Remediation of Biometric-Data Practices
In addition to the defense of the enforcement action and the class action, MTDC has requested that Calderwood & Harkness provide advisory services regarding the remediation of MTDC's biometric-data collection, storage, dissemination, and destruction practices to achieve compliance with BIPA and the Illinois Personal Information Protection Act. This scope component will include:
(i) Review and assessment of MTDC's current biometric-data practices as implemented through the TruScan 360 platform and any successor systems;
(ii) Development of a written biometric-information retention and destruction policy compliant with BIPA Section 15(a);
(iii) Development of compliant notice and consent protocols for the collection and use of biometric identifiers and biometric information from MTDC employees;
(iv) Review of MTDC's existing agreements with technology vendors to assess contractual provisions relating to biometric-data handling, data security, and indemnification obligations;
(v) Coordination with Lucia Marchetti, MTDC's Chief Information Security Officer, regarding the implementation of technical and administrative safeguards for the protection of biometric data; and
(vi) Preparation of training materials and conducting of training sessions for MTDC's human resources, information technology, and management personnel regarding BIPA compliance requirements.
(d) Potential Cross-Claims and Indemnification Proceedings Against Technology Vendors
MTDC anticipates asserting cross-claims and indemnification demands against certain technology vendors in connection with the matters described above. The primary target of such cross-claims and indemnification demands is Pinnacle Workforce Analytics, Inc. ("Pinnacle").
Pinnacle is a Delaware corporation headquartered at 11900 Sunrise Valley Drive, Suite 500, Reston, VA 20191. Pinnacle's EIN is 54-2198437. The current Chief Executive Officer of Pinnacle is Gregory Harmon, and the current General Counsel is Sandra Yee.
Pinnacle developed, sold, and deployed the TruScan 360 biometric workforce-management platform to MTDC under a Master Software License and Services Agreement ("MSLA") dated June 15, 2021. The key commercial terms of the MSLA are as follows:
•  Total Contract Value: $8,700,000 over a five-year initial term
•  Annual Contract Value: $1,740,000 per year
•  Initial Term: June 15, 2021 through June 14, 2026
•  Renewal Option: Optional three-year renewal at MTDC's election, subject to annual rate adjustments not to exceed 3.5% per year
•  Scope: License to use the TruScan 360 platform, implementation services, data migration, ongoing technical support and maintenance, and biometric-data hosting services via Pinnacle's cloud infrastructure
Terrence Whitfield has advised that the MSLA contains an indemnification clause (Section 11.2) under which Pinnacle agreed to defend, indemnify, and hold harmless MTDC from and against claims, losses, liabilities, and expenses arising from Pinnacle's breach of the agreement or from Pinnacle's failure to comply with applicable law in the provision of services under the MSLA. Mr. Whitfield believes that MTDC has a strong basis for asserting indemnification claims against Pinnacle on the theory that Pinnacle was responsible for the design, configuration, and deployment of the TruScan 360 system and had an obligation under the MSLA to ensure that the system's biometric-data practices complied with applicable law, including BIPA.
MTDC may also seek to assert cross-claims against Pinnacle's cloud-hosting subcontractors and other third-party vendors that received or processed biometric data in connection with the TruScan 360 system. The identities and contractual relationships of these subcontractors are not yet fully known and will be the subject of investigation during the engagement.
Note regarding Pinnacle as a potential conflict: Rachel Bernstein notes that Pinnacle Workforce Analytics, Inc. is identified herein as both a potential cross-claim/indemnification target and as a party whose product and data practices will necessarily be subject to scrutiny and potentially adverse characterization in the defense of MTDC. The suspected conflict regarding Pinnacle is described in greater detail in Section 7 below.
(e) Related Employment Counseling
MTDC has also requested that Calderwood & Harkness provide advice concerning MTDC's workforce-monitoring policies and their compliance with applicable employment law, including but not limited to the Illinois Employee Credit Privacy Act, the Illinois Workplace Transparency Act, the Illinois Right to Privacy in the Workplace Act, and applicable federal employment statutes. This scope component will include review of MTDC's employee handbook and workforce-monitoring policies, assessment of the lawfulness of MTDC's continued use of biometric workforce-management technology, and guidance regarding employee communications and notifications relating to the matters described herein.
3.3 Estimated BIPA Statutory-Damages Exposure
MTDC's consulting actuary, Lakefront Actuarial Advisors, LLC (200 East Randolph Street, Suite 1710, Chicago, IL 60601; Principal: Felix Drummond, FSA, MAAA), has prepared a preliminary estimate of MTDC's statutory-damages exposure under BIPA Section 20, 740 ILCS 14/20, based on the putative class size and the per-violation damages specified in the statute:
Negligent violation floor (BIPA § 20(1)): 12,400 class members × $1,000 per violation = $12,400,000
Intentional or reckless violation ceiling (BIPA § 20(2)): 12,400 class members × $5,000 per violation = $62,000,000
These estimates assume a single violation per class member. The actual exposure may be significantly higher if the court determines that each discrete instance of biometric-data collection constitutes a separate violation, or if the class period is extended. The Illinois Supreme Court's decision in Cothron v. White Castle System, Inc., 2023 IL 128004, holding that a separate claim accrues under BIPA each time a private entity scans or transmits an individual's biometric identifier or biometric information, creates the possibility that MTDC's exposure could be substantially multiplied. A refined actuarial analysis accounting for the frequency of biometric scans per employee over the relevant period will be prepared following commencement of the engagement and initial document review.
The estimated BIPA exposure range of $12.4 million to $62 million, even on the conservative single-violation-per-class-member basis, represents a material contingent liability for MTDC and may implicate reporting obligations under MTDC's Continuing Disclosure Agreement and bond covenants, as noted in Section 1.15 above.
SECTION 4: PROPOSED ENGAGEMENT TEAM
The following attorneys are proposed to staff the engagement. All proposed team members are based in Calderwood & Harkness's Chicago office.
Notes on Engagement Team:
(a) Rachel Bernstein (Responsible Partner) will serve as the engagement partner and the attorney primarily responsible for the day-to-day management and strategic direction of all matters within the scope of the engagement. Ms. Bernstein has over eighteen years of experience in data-privacy litigation and counseling, with a particular emphasis on BIPA defense. She has served as lead defense counsel in over twenty BIPA matters and has obtained favorable outcomes for clients through dispositive motions, settlements, and trial.
(b) Miriam Calloway (Billing Partner) will serve as the billing partner and will oversee billing, budgeting, and client-relationship management. Ms. Calloway is a partner in the firm's Healthcare & Life Sciences Practice Group and has extensive experience representing governmental and quasi-governmental entities in regulatory and compliance matters. Her inclusion on the team is intended to ensure that the billing arrangements and client-service protocols are appropriate for a governmental-entity client.
(c) Devon Archer (Lead Associate) is a senior associate in the Labor & Employment Practice Group with seven years of experience. Mr. Archer will take primary responsibility for managing discovery, coordinating with MTDC's internal legal and IT teams, and preparing class-certification briefing. Mr. Archer has significant experience in employment-related class-action defense and has worked with Ms. Bernstein on multiple prior BIPA matters.
(d) Nadia Petrov (Working Associate) is an associate in the Labor & Employment Practice Group with four years of experience. Ms. Petrov will support the team on document review, research and drafting, and remediation advisory work. Ms. Petrov has developing expertise in biometric-data privacy law and recently co-authored an article on the implications of the Cothron decision published in the Illinois Bar Journal.
Additional staffing may be required as the engagement progresses, particularly if discovery in the class action is extensive or if cross-claim and indemnification proceedings are commenced against Pinnacle or other vendors. Any additions to the engagement team will be subject to conflicts clearance and client approval.
Proposed hourly rates reflect Calderwood & Harkness's standard government-entity rate schedule, which provides a discount of approximately 15% from the firm's standard commercial rates.
SECTION 5: ESTIMATED FEES AND BILLING ARRANGEMENTS
5.1 Estimated Total Fees:
$3,500,000 to $5,200,000 over a projected engagement period of approximately 18 to 24 months. This estimate encompasses all five scope components described in Section 3.2 above, including defense of the AG enforcement action, defense of the class action, remediation advisory work, cross-claim and indemnification proceedings against technology vendors, and related employment counseling. The estimate is based on the engagement team's preliminary assessment of the likely scope and complexity of the matters and is subject to revision as the engagement progresses and additional information becomes available.
5.2 Billing Arrangement:
Hourly billing at the blended rates set forth in Section 4 above. No contingency, flat-fee, success-fee, or alternative fee arrangement is proposed at this time. However, MTDC's outside-counsel guidelines, once received and reviewed, may require discussion of alternative fee structures, and the engagement team is prepared to explore such structures if requested by the client or required by MTDC's procurement policies.
5.3 Rate Basis:
All proposed hourly rates are based on Calderwood & Harkness's standard government-entity rate schedule, which is applicable to engagements by federal, state, and local governmental entities and authorities. The government-entity rates represent an approximate 15% discount from the firm's standard commercial hourly rates.
5.4 Anticipated Disbursements:
Disbursements and out-of-pocket expenses will be estimated separately following commencement of the engagement and will be billed in accordance with the firm's standard disbursement policies. Anticipated categories of disbursements include, but are not limited to:
(i) Expert fees — actuarial consulting (Lakefront Actuarial Advisors, LLC, or such other actuarial firm as may be retained), forensic information-technology consulting, and e-discovery vendor costs;
(ii) Court costs — filing fees, service-of-process charges, and court-reporter fees;
(iii) Travel — airfare, lodging, ground transportation, and meals for travel related to court appearances, depositions, and client meetings outside the Chicago metropolitan area (including travel to Springfield for proceedings before the Attorney General's office or the Sangamon County circuit court);
(iv) Copying, printing, and document-production costs;
(v) Database and research charges (Westlaw, Sundial Solutions, PACER, etc.); and
(vi) Courier and delivery charges.
5.5 Billing Frequency:
Monthly. Invoices will be prepared and submitted in accordance with the firm's standard billing cycle, which closes on the last business day of each calendar month, with invoices issued within fifteen (15) business days following the close of the billing period. Payment terms will be set forth in the engagement letter.
5.6 Special Billing Considerations:
MTDC is a governmental entity subject to Illinois procurement law and regulations, including the Illinois Procurement Code, 30 ILCS 500/1 et seq., to the extent applicable. The engagement letter will need to address the following considerations:
(a) Compliance with any applicable competitive-procurement or sole-source-procurement requirements under MTDC's procurement policies and Illinois law;
(b) The potential applicability of the Illinois Freedom of Information Act, 5 ILCS 140/1 et seq. ("FOIA"), to invoices, billing records, and other engagement-related documents in MTDC's possession;
(c) MTDC's appropriation and expenditure-authority limitations, including any requirement for specific budget authorization or board approval for outside-counsel expenditures exceeding designated thresholds;
(d) Prompt-payment requirements applicable to Illinois governmental entities under the State Prompt Payment Act, 30 ILCS 540/1 et seq., or any analogous MTDC-specific payment policy; and
(e) Any outside-counsel billing guidelines or litigation-management protocols adopted by MTDC that may impose requirements regarding staffing levels, task-based billing codes, prior-approval thresholds for certain categories of work, or caps on reimbursable disbursements.
Terrence Whitfield has indicated that MTDC maintains a set of outside-counsel guidelines that will be provided to Calderwood & Harkness upon execution of an engagement letter. These guidelines will be reviewed by Rachel Bernstein and Miriam Calloway upon receipt, and any necessary modifications to the fee and billing arrangements will be discussed with MTDC at that time.
SECTION 6: IDENTIFICATION OF ADVERSE AND INTERESTED PARTIES (FOR CONFLICTS SEARCH)
The following parties are identified for purposes of the firm's conflicts search. The Conflicts & New Business Department is requested to search all firm databases — including the client and matter database, lateral-hire conflicts records, personal conflicts disclosures, and financial systems — for all parties listed below, including all known affiliates, subsidiaries, parent entities, and related persons.
6.1 Adverse Parties — Direct
6.2 Adverse Parties — Potential (Cross-Claim / Indemnification Targets)
Note: Additional third-party vendors and cloud-hosting subcontractors utilized by Pinnacle in connection with the TruScan 360 platform may be identified as potential cross-claim and indemnification targets as the engagement progresses. Their identities are not yet known. Supplemental conflicts submissions will be made as additional parties are identified.
6.3 Interested / Related Parties
6.4 MTDC Officers and Board Members to Search
The following MTDC officers and key personnel should be included in the conflicts search:
(i) Terrence Whitfield — General Counsel
(ii) Lucia Marchetti — Chief Information Security Officer
(iii) Darnell Okafor — Executive Director
Note: The full roster of MTDC Board of Directors members has not yet been provided by MTDC. Rachel Bernstein has requested this information from Terrence Whitfield and expects to receive it within the next several business days. Upon receipt, the board roster will be provided to Colleen Farrow's team for inclusion in a Round 2 conflicts search. The Conflicts & New Business Department should proceed with the initial search based on the parties identified above and should plan for a supplemental search upon receipt of the board roster and any additional parties identified through further investigation.
SECTION 7: KNOWN OR SUSPECTED CONFLICTS
7.1 Suspected Conflict — Pinnacle Workforce Analytics, Inc.
Rachel Bernstein identifies the following suspected conflict for immediate investigation by the Conflicts & New Business Department:
Pinnacle Workforce Analytics, Inc. is listed in Section 6.2 above as a potential cross-claim and indemnification target in the matters described in Section 3. Rachel Bernstein notes that Pinnacle may be an existing client of Calderwood & Harkness LLP. Specifically, Ms. Bernstein recalls that the firm's intellectual Property Litigation Practice Group may have represented or may currently represent Pinnacle in connection with patent-infringement litigation, and that the firm's Technology Transactions Practice Group may have advised Pinnacle on commercial licensing matters. Ms. Bernstein requests immediate verification of the firm's current and historical relationships with Pinnacle.
The nature of the suspected conflict is significant. Pinnacle's TruScan 360 platform is the biometric workforce-management system at the center of both the Attorney General's Civil Investigative Demand and the putative employee class action. Any defense of MTDC will necessarily involve detailed scrutiny of the TruScan 360 system's design, configuration, data-collection practices, and compliance (or noncompliance) with BIPA. Effective defense of MTDC may require Calderwood & Harkness to characterize Pinnacle's product and services in terms adverse to Pinnacle — for example, by arguing that Pinnacle bore responsibility for ensuring BIPA compliance under the MSLA, that Pinnacle's representations regarding the TruScan 360 system's legal compliance were inaccurate, or that Pinnacle's deployment methodology created the conditions giving rise to the alleged BIPA violations.
Furthermore, MTDC has specifically requested that Calderwood & Harkness advise on and pursue cross-claims and indemnification demands against Pinnacle under the MSLA. These proceedings would be directly adverse to Pinnacle and would require Calderwood & Harkness to advocate against Pinnacle's interests.
If the conflicts search confirms that Pinnacle is or has been a firm client, Rachel Bernstein requests that the matter be referred to the Conflicts Committee for review and determination of whether the engagement may proceed, whether an ethical screen or other mitigation measure is available, or whether informed written consent from one or both affected clients may be sought and obtained under Illinois Rule of Professional Conduct 1.7. Ms. Bernstein recognizes that, depending on the nature and scope of the firm's relationship with Pinnacle, the conflict may be non-consentable if the representation of MTDC would involve the assertion of claims against Pinnacle in the same proceeding.
7.2 Action Requested
The Conflicts & New Business Department is requested to conduct a comprehensive conflicts search across all firm databases, including but not limited to the following:
(a) The firm's client and matter database (including active, inactive, and closed matters);
(b) Lateral-hire conflicts records for all attorneys who have joined the firm within the past five years;
(c) Personal conflicts disclosures filed by all current partners and counsel;
(d) The firm's financial and billing systems (to identify any billing relationships with parties listed in Section 6); and
(e) The firm's marketing and business-development records (to identify any pitch activity, proposal submissions, or business-development contacts involving parties listed in Section 6).
The search should encompass all names, aliases, trade names, and known affiliates of each party listed in Section 6. Rachel Bernstein requests that the results of the conflicts search be reported to her and to the Chair of the Conflicts Committee within forty-eight (48) hours of submission of this form, given the time-sensitive nature of the CID response deadline (May 22, 2024) and the pending deadline to file a responsive pleading in the class action (June 3, 2024).
SECTION 8: ENGAGEMENT LETTER STATUS
8.1 Current Status:
Not yet prepared. Preparation of the engagement letter is pending completion of the conflicts-clearance process described in Sections 6 and 7 above. No draft engagement letter has been circulated to the prospective client, and no binding fee arrangement has been entered into or discussed in binding terms.
8.2 Special Considerations for Engagement Letter:
The following special considerations will need to be addressed in the engagement letter:
(a) Governmental-Entity Procurement Requirements. MTDC is a unit of local government organized under Illinois law. The engagement letter must address any applicable procurement requirements under MTDC's own procurement policies and, to the extent applicable, the Illinois Procurement Code, 30 ILCS 500/1 et seq. Terrence Whitfield has indicated that the retention of outside counsel for litigation defense matters may qualify for a professional-services exemption from competitive-bidding requirements, but that MTDC's Legal Affairs Committee must approve the engagement and the fee arrangement before work may commence. The engagement letter should be structured to accommodate this approval process.
(b) FOIA and Public-Records Implications. As a governmental entity, MTDC is subject to the Illinois Freedom of Information Act, 5 ILCS 140/1 et seq. The engagement letter should address the potential applicability of FOIA to the firm's invoices, billing records, correspondence, and other engagement-related documents in MTDC's possession. While attorney-client privilege and work-product protections may shield many such documents from FOIA disclosure, the engagement letter should include appropriate provisions regarding the handling and marking of privileged and work-product materials, and should address the protocol for responding to FOIA requests that may encompass engagement-related documents.
(c) Scope Limitations. If the conflicts-clearance process results in a determination that Calderwood & Harkness may represent MTDC in some but not all of the scope components described in Section 3.2 — for example, if an unresolvable conflict precludes the firm from pursuing cross-claims against Pinnacle — the engagement letter will need to clearly delineate the scope of the engagement and identify any matters excluded from the scope. The engagement letter should include appropriate provisions regarding MTDC's understanding that excluded matters will need to be handled by other counsel.
(d) Outside-Counsel Guidelines. MTDC maintains a set of outside-counsel guidelines that govern the retention and management of external legal service providers. These guidelines have been referenced by Terrence Whitfield but have not yet been provided to Calderwood & Harkness. Upon receipt, the guidelines will be reviewed by Rachel Bernstein and Miriam Calloway, and the engagement letter will incorporate or reference compliance with the applicable provisions of the guidelines.
(e) Board Approval. Terrence Whitfield has advised that the MTDC Board of Directors' Legal Affairs Committee must approve outside-counsel engagements involving estimated fees in excess of $500,000. Given the estimated fee range of $3.5 million to $5.2 million, board approval will be required. The engagement letter should address the effective date of the engagement in relation to the board-approval process and should specify whether any limited-scope work (such as preparation of the CID response) may be undertaken prior to formal board approval, subject to appropriate authorization from MTDC's General Counsel.
SECTION 9: APPROVALS AND ROUTING
Routing Instructions: Upon completion of the conflicts search, this form and the search results should be returned to Rachel Bernstein and forwarded to the Chair of the Conflicts Committee if Committee review is required. If no conflicts are identified and no Committee review is required, Colleen Farrow is authorized to grant conflicts clearance and to authorize opening of the matter in the firm's systems, at which point Rachel Bernstein will proceed with preparation of the engagement letter for review by the firm's General Counsel and submission to MTDC.
SECTION 10: CERTIFICATION
I, Rachel Bernstein, Partner at Calderwood & Harkness LLP, hereby certify as follows in connection with this New-Matter Intake Request Form (Form NM-1), Matter No. 1031-00001:
1.  The information provided in this form is complete and accurate to the best of my knowledge as of the date of submission.
2.  I have identified all adverse and interested parties known to me in connection with this matter in Section 6 of this form and have made a diligent effort to identify all such parties based on the information available to me at this time.
3.  I have disclosed all known or suspected conflicts of interest in Section 7 of this form, including the suspected conflict relating to Pinnacle Workforce Analytics, Inc.
4.  I understand and acknowledge that no substantive legal work may be commenced on behalf of Metropolitan Transit Development Corp. in connection with this matter until the conflicts-clearance process is complete and the engagement has been formally approved in accordance with Calderwood & Harkness LLP Firm Policy CNB-4.
5.  I understand and acknowledge that if the conflicts-clearance process identifies a conflict that cannot be resolved, the engagement may not proceed, or the scope of the engagement may be narrowed, and I will promptly inform the prospective client of any such determination.
6.  I will promptly notify the Conflicts & New Business Department of any additional adverse or interested parties, or any additional known or suspected conflicts, that come to my attention after the submission of this form.
CALDERWOOD & HARKNESS LLP
By: ________
Name: Rachel Bernstein
Title: Partner, Privacy & Data Security Practice Group
Date: May 9, 2024
CONFIDENTIAL — ATTORNEY WORK PRODUCT
This form is confidential attorney work product of Calderwood & Harkness LLP. It is intended solely for internal use in connection with the firm's conflicts-clearance and new-business intake processes. This form and its contents are protected by the attorney-client privilege, the work-product doctrine, and all other applicable privileges and protections. Any unauthorized disclosure, distribution, or copying of this form or its contents is strictly prohibited.
Route completed forms to: Colleen Farrow, Director of Conflicts & New Business, Calderwood & Harkness LLP, 600 Lexington Avenue, 38th Floor, New York, NY 10022, or via the firm's internal secure submission portal (accessible at https://intake.calderwoodharkness.com).
C&H Form NM-1 (Rev. 03/2023) — Matter No. 1031-00001
Assigned Matter Number: | 1031-00001
Date of Submission: | May 9, 2024
Submitted By: | Rachel Bernstein, Partner, Privacy & Data Security Practice Group
Office: | Calderwood & Harkness LLP, Chicago Office — One North Wacker Drive, Suite 4200, Chicago, IL 60606
Submitted To: | Colleen Farrow, Director, Conflicts & New Business
Name: | Terrence Whitfield
Title: | General Counsel
Phone: | (312) 555-0184
Email: | twhitfield@mtdc.gov
Name: | Lucia Marchetti
Title: | Chief Information Security Officer
Phone: | (312) 555-0227
Email: | lmarchetti@mtdc.gov
Firm Name: | Hargrove, Tillman & Reese LLP
Address: | 233 South Wacker Drive, Suite 5600, Chicago, IL 60606
Lead Partner: | Constance Hargrove
Name: | Meridian Trust National Bank
Address: | 135 South LaSalle Street, Chicago, IL 60603
Chief Fiduciary Officer: | Angela Tran
Role | Name | Practice Group | Office | Proposed Hourly Rate
Responsible Partner | Rachel Bernstein | Privacy & Data Security | Chicago | $1,150/hr
Billing Partner | Miriam Calloway | Healthcare & Life Sciences | Chicago | $1,150/hr
Lead Associate | Devon Archer | Labor & Employment | Chicago | $785/hr
Working Associate | Nadia Petrov | Labor & Employment | Chicago | $625/hr
Party Name | Role in Matter | Address
Office of the Illinois Attorney General, Bureau of Civil Rights | Governmental adverse party; issued CID No. CRB-2024-0417 to MTDC; anticipated enforcement plaintiff | 100 West Randolph Street, 11th Floor, Chicago, IL 60601; 500 South Second Street, Springfield, IL 62701
Malcolm Jeffries | Deputy Attorney General for Civil Rights, Office of the Illinois Attorney General; signatory on the CID | Office of the Illinois Attorney General, Springfield, IL
Ridgeway & Falk LLP | Outside special counsel retained by the Illinois AG's office for this matter | 401 East Adams Street, Suite 300, Springfield, IL 62701
Diane Falk | Lead partner at Ridgeway & Falk LLP on this matter | Same as Ridgeway & Falk LLP
Putative class of approximately 12,400 current and former MTDC employees | Class-action plaintiffs in Case No. 2024-CH-04417 (Cir. Ct. Cook Cty., Chancery Div.) | N/A (individual addresses not yet known)
Kessler, Brandt & O'Neill LLP | Plaintiffs' class counsel in Case No. 2024-CH-04417 | 120 North LaSalle Street, Suite 2200, Chicago, IL 60602
Martin Kessler | Lead class counsel, Kessler, Brandt & O'Neill LLP | Same as Kessler, Brandt & O'Neill LLP
Yolanda Brandt | Co-counsel, Kessler, Brandt & O'Neill LLP | Same as Kessler, Brandt & O'Neill LLP
Party Name | Role in Matter | Address
Pinnacle Workforce Analytics, Inc. | Former workforce-surveillance technology vendor; developer and deployer of the TruScan 360 biometric platform; potential cross-claim and indemnification target under the MSLA dated June 15, 2021 | 11900 Sunrise Valley Drive, Suite 500, Reston, VA 20191
Gregory Harmon | Chief Executive Officer, Pinnacle Workforce Analytics, Inc. | Same as Pinnacle
Sandra Yee | General Counsel, Pinnacle Workforce Analytics, Inc. | Same as Pinnacle
Party Name | Role in Matter | Address
Hargrove, Tillman & Reese LLP | MTDC's existing outside litigation counsel; referring firm | 233 South Wacker Drive, Suite 5600, Chicago, IL 60606
Constance Hargrove | Lead partner at HTR; referred MTDC to Calderwood & Harkness | Same as HTR
Meridian Trust National Bank | MTDC's fiscal agent and bond trustee | 135 South LaSalle Street, Chicago, IL 60603
Angela Tran | Chief Fiduciary Officer, Meridian Trust National Bank | Same as Meridian Trust
Lakefront Actuarial Advisors, LLC | MTDC's consulting actuary; prepared preliminary BIPA exposure estimate | 200 East Randolph Street, Suite 1710, Chicago, IL 60601
Felix Drummond, FSA, MAAA | Principal, Lakefront Actuarial Advisors, LLC | Same as Lakefront
Veritas Biometrics Corp. | Pinnacle competitor; third party that is named as a defendant in separate patent litigation brought by Pinnacle (included because Veritas may be relevant to the factual background of the TruScan 360 platform's development and deployment and because Calderwood & Harkness may have a relationship with Veritas or its counsel) | 8200 Greensboro Drive, Suite 1100, McLean, VA 22102
Randall Cho | Chief Executive Officer, Veritas Biometrics Corp. | Same as Veritas
Whitmore & Sato LLP | Outside counsel for Veritas Biometrics Corp. | 999 Waterside Drive, Suite 600, Norfolk, VA 23510
Akira Sato | Partner, Whitmore & Sato LLP; lead counsel for Veritas | Same as Whitmore & Sato LLP
Step | Name / Title | Date | Status
Requesting Partner Signature | Rachel Bernstein, Partner | May 9, 2024 | Completed
Billing Partner Acknowledgment | Miriam Calloway, Partner | May 9, 2024 | Completed
Conflicts & New Business — Received By | Colleen Farrow, Director, Conflicts & New Business | May 9, 2024 | Completed
Conflicts Search Requested | Colleen Farrow | May 9, 2024 | Initiated
Conflicts Search Completed | — | — | Pending
Conflicts Committee Review Required | — | — | To be determined based on search results
Final Approval — Engagement Authorized | — | — | Pending
Matter Opened in Firm Systems | — | — | Pending conflicts clearance

Form Version: C&H Form NM-1 (Rev. 03/2023)

CALDERWOOD & HARKNESS LLP

SECTION 1: PROSPECTIVE CLIENT INFORMATION

SECTION 2: SOURCE OF ENGAGEMENT / HOW CLIENT CAME TO FIRM

SECTION 3: PROPOSED ENGAGEMENT DESCRIPTION

SECTION 4: PROPOSED ENGAGEMENT TEAM

SECTION 5: ESTIMATED FEES AND BILLING ARRANGEMENTS

SECTION 7: KNOWN OR SUSPECTED CONFLICTS

SECTION 8: ENGAGEMENT LETTER STATUS

SECTION 9: APPROVALS AND ROUTING

SECTION 10: CERTIFICATION

CALDERWOOD & HARKNESS LLP

Record

Parties

Dates

Amounts