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CALDERWOOD & HARKNESS LLP

INTERNAL MEMORANDUM

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

This memorandum constitutes attorney work product and is protected by the attorney-client privilege, the work-product doctrine, and all other applicable privileges. It is intended solely for internal use by Calderwood & Harkness LLP attorneys and authorized personnel. Any unauthorized review, use, disclosure, or distribution is strictly prohibited.

TO: Rachel Bernstein, Partner, Privacy & Data Security Practice Group Miriam Calloway, Partner, Healthcare & Life Sciences Practice Group

FROM: Rachel Bernstein, Partner, Privacy & Data Security Practice Group Devon Archer, Associate, Labor & Employment Practice Group

DATE: May 17, 2024

RE: Recommended Alternative Counsel for Metropolitan Transit Development Corp. — Matter No. 1031-00001 (Declined)

COPIES: Helen Drazkowski, General Counsel, Calderwood & Harkness LLP Lawrence Keating, Senior Partner & Chair, Conflicts Committee Colleen Farrow, Director, Conflicts & New Business

CLASSIFICATION: Internal — Not for Distribution Outside Calderwood & Harkness LLP

I. PURPOSE

This memorandum identifies qualified alternative counsel to whom the firm may refer Metropolitan Transit Development Corp. ("MTDC") following the Conflicts Committee's determination, rendered on May 14, 2024, that the firm's proposed engagement of MTDC (Matter No. 1031-00001) must be declined due to an unwaivable conflict of interest under Illinois Rules of Professional Conduct 1.7(a)(1) (direct adversity) and 1.7(a)(2) (material limitation). As the Committee concluded, the conflict is structural in nature and cannot be remedied through informed consent under Rule 1.7(b), because the firm does not reasonably believe it could provide competent and diligent representation to MTDC while simultaneously maintaining its existing obligations to the adverse client. Accordingly, the proposed engagement was formally declined.

MTDC's General Counsel, Terrence Whitfield, was notified of the firm's declination by telephone on the morning of May 17, 2024, by Rachel Bernstein and by follow-up email confirming the substance of that conversation. Consistent with the firm's standard practice, the communication did not disclose the identity of the existing client or the specific nature of the conflict. During that conversation, the firm offered to facilitate a referral to qualified alternative counsel possessing the requisite expertise in Illinois biometric-data privacy law, regulatory enforcement defense, and class-action litigation. Mr. Whitfield indicated that MTDC would welcome such a referral and asked that it be provided as promptly as practicable given the time-sensitive nature of the pending Attorney General investigation and the putative class action.

A formal referral letter will be sent to Mr. Whitfield separately following approval of this memorandum by General Counsel Helen Drazkowski and Conflicts Committee Chair Lawrence Keating. The referral letter will provide contact information and summary qualifications for each recommended firm identified herein, without disclosing any privileged information or the basis for the firm's declination.

II. BACKGROUND ON THE MTDC MATTER

A. The Client

MTDC is a unit of local government and special-purpose transit authority organized and existing under the Illinois Local Mass Transit District Act (70 ILCS 3610/0.01 et seq.). MTDC is headquartered at 550 West Harrison Street, Suite 1400, Chicago, Illinois 60607. MTDC operates a multi-modal public transit system serving the greater Chicago metropolitan area, with an annual operating budget of approximately $3.2 billion. Its executive leadership includes Darnell Okafor, Executive Director; Terrence Whitfield, General Counsel; and Lucia Marchetti, Chief Information Security Officer ("CISO"). According to Mr. Whitfield, MTDC's annual outside-counsel budget is approximately $14.8 million, indicating the client's ability and institutional willingness to engage sophisticated outside counsel for complex litigation and regulatory matters.

B. The Proposed Engagement

MTDC sought representation by Calderwood & Harkness in connection with the following interrelated matters:

(a) Defense of Civil Investigative Demand. On April 22, 2024, the Illinois Attorney General's Bureau of Civil Rights issued a Civil Investigative Demand ("CID") to MTDC, bearing Reference No. CRB-2024-0417. The CID alleges that MTDC's workforce-monitoring and timekeeping systems collected, stored, and used biometric identifiers and biometric information — including fingerprint scans and facial-geometry data — from employees and certain contract personnel in violation of 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. The CID demands production of extensive categories of documents and data, imposes interrogatories, and requests depositions of designated MTDC custodians. The Attorney General's office has designated Ridgeway & Falk LLP (lead partner: Diane Falk; 401 East Adams Street, Suite 300, Springfield, Illinois 62701) as outside special counsel to assist in the investigation and any resulting enforcement proceedings.

(b) Defense of Putative Class Action. On April 29, 2024, a putative class action was filed against MTDC in the Circuit Court of Cook County, Chancery Division, captioned Ramirez et al. v. Metropolitan Transit Development Corp., Case No. 2024-CH-04417. The complaint was filed on behalf of approximately 12,400 current and former MTDC employees by Kessler, Brandt & O'Neill LLP, with Martin Kessler serving as lead class counsel and Yolanda Brandt serving as co-class counsel. The complaint alleges violations of BIPA Sections 15(a), 15(b), and 15(d), as well as related state-law privacy claims and employment-law claims. The named plaintiffs seek statutory damages under 740 ILCS 14/20, injunctive relief, and attorneys' fees and costs.

(c) Remediation Counseling. MTDC sought advice on the remediation of its biometric-data collection, storage, retention, and destruction practices to achieve prospective compliance with BIPA and PIPA, including development of revised written policies, informed-consent protocols, data-retention schedules, and vendor-management procedures.

(d) Cross-Claims and Indemnification Proceedings. MTDC indicated the likely need to assert cross-claims and pursue indemnification against its technology vendors, most prominently Pinnacle Workforce Analytics, Inc. ("Pinnacle"), under the terms of the Master Software License and Services Agreement between MTDC and Pinnacle dated June 15, 2021 (the "Pinnacle MSLSA"). The Pinnacle MSLSA contains indemnification, defense, and hold-harmless provisions that MTDC believes obligate Pinnacle to defend and indemnify MTDC against claims arising from the operation of Pinnacle's biometric-data processing modules. MTDC may also seek contribution or indemnification from additional vendors whose identity has not yet been confirmed.

(e) Related Employment Counseling. MTDC also sought ongoing employment counseling concerning its workforce-monitoring policies, including review and revision of employee handbooks, collective-bargaining agreement implications, and compliance with applicable labor and employment regulations governing electronic monitoring and surveillance in the workplace.

C. Exposure Estimate

MTDC's exposure in this matter is significant. Under BIPA Section 20, a prevailing party may recover statutory damages of $1,000 per violation for negligent violations and $5,000 per violation for intentional or reckless violations. Based on a putative class of approximately 12,400 current and former employees, MTDC's consulting actuary, Lakefront Actuarial Advisors, LLC (Felix Drummond, FSA, MAAA), has estimated MTDC's aggregate statutory-damages exposure at between $12.4 million (assuming a negligent-violation floor of 12,400 class members multiplied by $1,000 per violation) and $62.0 million (assuming an intentional-violation ceiling of 12,400 class members multiplied by $5,000 per violation). These figures do not include potential attorneys' fees awards, costs of injunctive relief, penalties that may be sought by the Attorney General in a separate enforcement proceeding, or the costs of remediation.

D. Referral Source

MTDC was referred to Calderwood & Harkness by Hargrove, Tillman & Reese LLP ("HTR"), specifically by Constance Hargrove, a partner at HTR who serves as MTDC's primary outside litigation counsel. Ms. Hargrove referred MTDC to Calderwood & Harkness on the basis of the firm's recognized expertise in data-privacy and biometric-information-privacy law. HTR continues to serve as MTDC's general outside litigation counsel on other matters and will likely coordinate with whatever firm MTDC retains for the BIPA-related matters.

E. Fee Estimate

Based on the scope of the proposed engagement, the firm's initial estimate of professional fees ranged from $3.5 million to $5.2 million over an anticipated 18- to 24-month engagement period, encompassing the AG enforcement defense, the class-action defense, cross-claim and indemnification proceedings, and remediation counseling.

F. Fiscal-Agent and Bond-Covenant Considerations

Meridian Trust National Bank (Chief Fiduciary Officer: Angela Tran) serves as MTDC's fiscal agent and bond trustee. Mr. Whitfield has indicated that material BIPA liability — particularly liability at or approaching the upper end of the exposure range — could trigger reporting obligations under MTDC's Continuing Disclosure Agreement with Meridian Trust and may implicate covenants in MTDC's outstanding revenue-bond indentures. This adds an additional layer of urgency and complexity to the engagement, and any firm retained by MTDC should be aware of these municipal-finance dimensions.

III. CRITERIA FOR RECOMMENDED COUNSEL

In evaluating potential alternative counsel for referral, this memorandum applied the following selection criteria, which reflect the specific demands of the MTDC matter and the characteristics necessary for effective representation of a governmental transit authority facing simultaneous regulatory enforcement and private class-action litigation:

1. Substantive Expertise. The recommended firm must possess demonstrated experience defending BIPA enforcement actions and BIPA class actions in Illinois state and federal courts. Given the dual nature of MTDC's exposure — both an Attorney General CID and investigation, and a putative class action in Cook County — the firm must have attorneys with proven track records in both regulatory enforcement defense and complex class-action litigation in the biometric-data privacy context. Experience with PIPA and related Illinois data-privacy statutes is also relevant. Familiarity with the evolving landscape of BIPA jurisprudence, including recent Illinois Supreme Court decisions regarding accrual, the statute of limitations, and the scope of statutory damages, is essential.

2. Government-Client Experience. The recommended firm must have familiarity with the unique considerations that attend the representation of governmental entities. These include, but are not limited to, sovereign-immunity doctrines and their applicability (or inapplicability) to BIPA claims against governmental bodies; open-records and Freedom of Information Act obligations that may affect litigation strategy and document handling; legislative and appropriations processes that may constrain settlement authority or remediation funding; governmental procurement rules that may govern the engagement of outside counsel and expert consultants; and public-accountability and transparency expectations that inform communications strategy and media relations. The firm should understand the institutional dynamics of representing an entity whose leadership reports to a board of directors (or its equivalent) composed of appointed or elected officials, and whose litigation decisions may be subject to public scrutiny.

3. Capacity and Resources. The recommended firm must have sufficient bench depth to manage simultaneous defense of an Attorney General enforcement action and a putative class action involving approximately 12,400 class members, together with potential cross-claim and indemnification proceedings against Pinnacle Workforce Analytics, Inc., and possibly additional technology vendors. The engagement will require significant e-discovery capabilities, the ability to manage large-scale document productions related to biometric-data systems, and the capacity to handle parallel discovery tracks in the AG investigation and the Cook County litigation. The firm must be able to staff the matter with experienced partners, senior associates, and junior associates in sufficient numbers to meet the anticipated pace and volume of the litigation.

4. No Conflicts of Interest. The recommended firm must have no conflicts of interest with MTDC, the Illinois Attorney General's Office, Kessler, Brandt & O'Neill LLP (class counsel), Pinnacle Workforce Analytics, Inc., or any other identified party to the matter. This criterion is of particular importance given that Calderwood & Harkness's own inability to undertake the engagement stems from a conflicts issue. It is noted, however, that Calderwood & Harkness's preliminary review of its own conflicts database is not a substitute for each recommended firm's independent conflicts-clearance process, and MTDC should independently verify the absence of conflicts through each firm's own intake and conflicts procedures before entering into any engagement.

5. Geographic Proximity. The recommended firm should be based in Chicago or maintain a substantial Chicago office presence. The Cook County litigation, coordination with MTDC's headquarters, interaction with the Illinois Attorney General's office, and proximity to the Circuit Court of Cook County all require a meaningful on-the-ground presence in the Chicago metropolitan area. While some aspects of the engagement (particularly remediation counseling and vendor negotiations) could be handled remotely, the core litigation work benefits significantly from geographic proximity.

6. Rate Competitiveness. The recommended firm's billing rates should be within a range appropriate for a governmental transit authority operating within defined outside-counsel budget parameters. As noted above, MTDC's annual outside-counsel budget is approximately $14.8 million across all matters. While the BIPA matter is expected to represent a significant share of that budget during the engagement period, rate proposals should reflect the realities of public-sector client representation, including the expectation of rate structures that are competitive with — and ideally somewhat below — rates charged to comparable private-sector clients for similar work.

IV. RECOMMENDED FIRM A: ALDRIDGE, PAULSON & CHO LLP

A. Firm Overview

Full Name: Aldridge, Paulson & Cho LLP ("APC")

Address: 150 North Michigan Avenue, Suite 3500, Chicago, Illinois 60601

Entity Type: Illinois limited liability partnership

Contact Partner: Victoria Aldridge, Partner and BIPA Practice Lead

Telephone: (312) 555-8200

Email: valdridge@apclaw.com

APC is a mid-size, Chicago-based litigation and regulatory defense firm with approximately 120 attorneys. The firm was founded in 2007 and has since developed a strong reputation in Illinois for its regulatory enforcement defense practice, its commercial litigation capabilities, and, in recent years, its dedicated biometric-information privacy practice. APC's client base includes employers across multiple industries, technology companies, and — notably for MTDC's purposes — governmental and quasi-governmental entities. The firm maintains a single office in Chicago, which provides deep familiarity with Cook County courts and Illinois state regulatory agencies.

B. Relevant Experience and Qualifications

Victoria Aldridge is widely recognized as one of the leading BIPA defense practitioners in Illinois. She has served as lead counsel in over two dozen BIPA class actions and individual actions in both Illinois state and federal courts, and has represented clients in at least four BIPA-related investigations or enforcement proceedings initiated by the Illinois Attorney General's office. Ms. Aldridge's practice encompasses the full spectrum of BIPA defense work, including motions to dismiss, class-certification opposition, discovery management, settlement negotiations, and trial preparation. She is a frequent speaker at Illinois State Bar Association and American Bar Association programs on biometric-data privacy law and has published extensively on BIPA developments, including articles analyzing the Illinois Supreme Court's decisions in Rosenbach v. Six Flags Entertainment Corp. and Cothron v. White Castle System, Inc.

APC's BIPA practice group includes approximately eight partners and twelve associates with significant BIPA and data-privacy litigation experience. This bench depth is directly relevant to the MTDC engagement, which will require simultaneous attention to the AG enforcement action, the Cook County class-action defense, potential cross-claims against Pinnacle Workforce Analytics, and remediation counseling. APC's team has demonstrated particular strengths in the following areas:

• BIPA Class-Action Defense. APC has defended employers and technology companies against BIPA class actions involving employee biometric data, customer biometric data, and contractor biometric data. The firm's experience includes defending cases involving fingerprint-based timekeeping systems, facial-recognition access-control systems, and voice-print authentication systems — all of which are potentially relevant to MTDC's biometric-data practices.

• Large-Scale Document Productions. APC has managed document productions in BIPA matters involving millions of records related to biometric-data systems, including system-architecture documentation, database schemas, consent records, data-retention logs, and vendor communications. The firm employs dedicated litigation-technology specialists and utilizes advanced e-discovery platforms capable of handling the volume and complexity of productions that the MTDC matter is likely to entail.

• BIPA Compliance and Remediation. In addition to its litigation capabilities, APC advises clients on BIPA compliance programs and remediation strategies, including the development of written biometric-information policies, informed-consent mechanisms, data-retention and destruction schedules, and vendor-management frameworks. This experience is directly applicable to the remediation-counseling component of MTDC's needs.

• Attorney General Enforcement Defense and CID Response. APC has represented clients in responding to CIDs issued by the Illinois Attorney General's office in connection with consumer-protection and data-privacy investigations. Ms. Aldridge is familiar with the procedural requirements and strategic considerations associated with CID responses, including the assertion of applicable privileges, the negotiation of production timelines, and the management of parallel proceedings where both an AG investigation and private litigation are pending.

• Governmental and Quasi-Governmental Client Experience. APC has represented governmental and quasi-governmental entities in regulatory enforcement matters, including transit authorities, municipal agencies, and public universities. While the firm's governmental practice is not as extensive as its private-sector employer defense work, APC attorneys have demonstrated familiarity with sovereign-immunity issues, open-records obligations, public-procurement requirements, and the institutional dynamics of representing public-sector clients. This experience is relevant to MTDC's status as a unit of local government.

C. Conflicts Status

Based on a preliminary review conducted by Rachel Bernstein and Devon Archer of Calderwood & Harkness's own conflicts database, APC does not appear in our system in connection with any party to the MTDC matter, including MTDC itself, the Illinois Attorney General's Office, Kessler, Brandt & O'Neill LLP, Pinnacle Workforce Analytics, Inc., Hargrove, Tillman & Reese LLP, Ridgeway & Falk LLP, Lakefront Actuarial Advisors, LLC, and Meridian Trust National Bank.

Caveat: This preliminary review is limited to Calderwood & Harkness's own records and is not a substitute for APC's independent conflicts-clearance process. MTDC must independently confirm through APC's own conflicts-intake procedures that no conflicts of interest exist with respect to any party to the matter, any affiliated or related entity, or any individual associated with the matter. MTDC should provide APC with a comprehensive list of all known parties, witnesses, and interested persons to facilitate a thorough conflicts check.

D. Rate Information

APC's published rates for government-client engagements are understood to be competitive with those of other mid-size Chicago litigation firms and are believed to fall within the range appropriate for a governmental transit authority with MTDC's outside-counsel budget parameters. APC has historically offered public-sector clients rate structures that reflect a modest discount from its standard commercial rates, and the firm has experience with alternative fee arrangements, including blended rates and capped fees, that MTDC may wish to explore.

We recommend that MTDC negotiate rates and engagement terms directly with APC, and that any fee arrangement be documented in a written engagement letter that addresses billing procedures, staffing commitments, budget estimates, and reporting requirements consistent with MTDC's internal governance and procurement policies.

V. RECOMMENDED FIRM B: NORTHFIELD McKAY LLP

A. Firm Overview

Full Name: Northfield McKay LLP ("NM")

Address: 311 South Wacker Drive, Suite 4800, Chicago, Illinois 60606

Entity Type: Illinois limited liability partnership

Contact Partner: Damien Northfield, Partner and Data-Privacy Litigation Lead

Telephone: (312) 555-6100

Email: dnorthfield@northfieldmckay.com

NM is a Chicago-based litigation firm with approximately 85 attorneys. The firm has developed a nationally recognized data-privacy and cybersecurity practice that spans both litigation and counseling. Founded in 2012 by Damien Northfield and Margaret McKay, the firm has grown rapidly by focusing on the intersection of technology, privacy, and complex litigation. NM's client base includes technology companies, healthcare systems, financial institutions, and employers across a range of industries. The firm's single-office model — concentrated in downtown Chicago — provides deep familiarity with the Cook County court system and the Illinois regulatory landscape, while its national reputation in data-privacy law attracts engagements from clients across the country.

B. Relevant Experience and Qualifications

Damien Northfield is a leading data-privacy litigator with extensive experience in BIPA defense, data-breach class-action litigation, and regulatory investigations involving biometric and personal data. Mr. Northfield has served as lead counsel in numerous BIPA class actions and has represented clients in investigations and enforcement proceedings initiated by both the Illinois Attorney General's office and the Federal Trade Commission. His practice is distinguished by its integrated approach, combining aggressive litigation defense with strategic compliance counseling designed to position clients for favorable outcomes in both the courtroom and the regulatory arena.

NM's data-privacy and cybersecurity practice group includes approximately six partners and ten associates with concentrated experience in privacy litigation and counseling. The firm's capabilities are particularly well-suited to the multifaceted nature of the MTDC engagement:

• BIPA Defense Litigation. NM has defended clients in BIPA class actions and individual actions involving employee biometric data, including cases arising from fingerprint-based and facial-recognition-based workforce-management systems. The firm has achieved favorable outcomes through dispositive motions, class-certification opposition, and negotiated settlements. Mr. Northfield's familiarity with the current state of BIPA jurisprudence — including recent developments regarding per-scan versus per-person damages theories, the applicability of the Workers' Compensation Act exclusivity bar, and the scope of BIPA's private right of action — would be directly valuable to MTDC's defense.

• Employment-Related Privacy Disputes. NM has particular experience with employment-related privacy disputes, including class actions involving large employee populations. The firm has defended employers against claims arising from electronic monitoring, workplace surveillance, and biometric-data collection practices. This experience aligns closely with the employment-privacy dimensions of the MTDC matter, including the putative class of approximately 12,400 current and former employees.

• Data-Privacy Remediation and Compliance Counseling. NM's counseling practice is a significant differentiator. The firm has advised numerous organizations on the development and implementation of data-privacy remediation programs, including comprehensive BIPA compliance frameworks. NM's remediation work encompasses written policy development, informed-consent protocol design, data-mapping and inventory exercises, data-retention and destruction scheduling, vendor due-diligence and contractual remediation, employee training programs, and ongoing compliance monitoring. This capability is directly relevant to the remediation-counseling component of MTDC's needs, and NM's integrated litigation-and-counseling approach may allow MTDC to address its remediation obligations in a manner that is informed by — and strategically coordinated with — the firm's litigation defense strategy.

• Parallel Proceedings. NM has experience managing parallel proceedings in which a client faces both regulatory enforcement (such as an AG investigation or CID) and private class-action litigation arising from the same underlying conduct. The firm is familiar with the strategic complexities of managing information flow between parallel proceedings, coordinating discovery across multiple forums, and protecting privileged communications in multi-front engagements.

• Public-Sector Client Experience. While NM's practice is primarily oriented toward private-sector clients, the firm has represented public-sector entities and entities with significant public-accountability obligations, including a regional healthcare authority and a publicly funded research institution, in data-privacy disputes. Mr. Northfield has demonstrated awareness of the institutional considerations that attend public-sector representation, including open-records obligations, public-meeting requirements, and the political dimensions of litigation involving government agencies.

C. Conflicts Status

Based on a preliminary review conducted by Rachel Bernstein and Devon Archer of Calderwood & Harkness's own conflicts database, NM does not appear in our system in connection with any party to the MTDC matter, including MTDC itself, the Illinois Attorney General's Office, Kessler, Brandt & O'Neill LLP, Pinnacle Workforce Analytics, Inc., Hargrove, Tillman & Reese LLP, Ridgeway & Falk LLP, Lakefront Actuarial Advisors, LLC, and Meridian Trust National Bank.

Caveat: As with APC, this preliminary review is limited to Calderwood & Harkness's own records and does not substitute for NM's independent conflicts-clearance process. MTDC must independently confirm through NM's own conflicts-intake procedures that no conflicts of interest exist with respect to any party to the matter, any affiliated or related entity, or any individual associated with the matter. MTDC should provide NM with a comprehensive list of all known parties, witnesses, and interested persons to facilitate a thorough conflicts check.

D. Rate Information

NM's rates for complex litigation engagements are understood to be competitive with those of other specialized Chicago litigation firms of comparable size and expertise. Given the firm's focus on data-privacy and cybersecurity matters, its rate structure reflects the premium associated with specialized practice areas, but the firm has a history of offering competitive arrangements to institutional clients and repeat engagements. NM has experience with alternative fee arrangements, including hybrid fee structures that blend hourly rates with success-based or outcome-based components.

We recommend that MTDC negotiate rates and engagement terms directly with NM, and that any fee arrangement be documented in a written engagement letter consistent with MTDC's internal governance requirements and procurement policies.

VI. COMPARATIVE ASSESSMENT AND RECOMMENDATION

Both APC and NM are well-qualified firms, and either would be capable of providing competent and effective representation to MTDC in connection with the matters described in this memorandum. Each firm possesses the substantive expertise, litigation capacity, and geographic presence necessary to manage the simultaneous defense of the Attorney General enforcement action and the Cook County putative class action, as well as the ancillary cross-claim, indemnification, and remediation-counseling matters.

That said, each firm brings somewhat different strengths to the engagement, and the following differentiating factors may be relevant to MTDC's evaluation:

• APC (Victoria Aldridge) may have a slight edge in dedicated BIPA defense experience and prior Attorney General enforcement-action work. Ms. Aldridge's extensive track record in BIPA class-action defense — spanning over two dozen matters — and her specific experience in AG enforcement proceedings position APC as a strong choice for a client whose most immediate and pressing needs center on litigation defense. APC's larger attorney count (approximately 120 attorneys) may also provide somewhat greater bench depth and staffing flexibility for a matter of this size and complexity. Additionally, APC's experience representing governmental and quasi-governmental entities, while not the firm's primary focus, provides a foundation of familiarity with the institutional considerations that MTDC will present.

• NM (Damien Northfield) may offer additional strengths in the data-privacy remediation and compliance counseling components that MTDC will need beyond pure litigation defense. NM's integrated litigation-and-counseling model allows the firm to approach BIPA defense with an eye toward long-term compliance and risk mitigation, which may prove valuable as MTDC seeks not only to defend against existing claims but also to restructure its biometric-data practices on a going-forward basis. NM's experience with employment-related privacy disputes involving large employee populations is also particularly well-aligned with the class-action component of the MTDC matter.

We recommend that both firms be presented to MTDC in the referral letter and that MTDC evaluate each based on its own institutional priorities and preferences. Among the factors that MTDC should consider in making its selection are rate proposals, team composition and staffing plans, the proposed engagement partner's availability and personal commitment to the matter, the firm's approach to managing parallel proceedings, and the overall chemistry between the firm's proposed team and MTDC's in-house legal and executive leadership — specifically Terrence Whitfield (General Counsel), Lucia Marchetti (CISO), and Darnell Okafor (Executive Director).

We further note that MTDC may wish to consult with Hargrove, Tillman & Reese LLP (Constance Hargrove), its existing outside litigation counsel, regarding the coordination between any newly retained BIPA counsel and HTR's ongoing general litigation work on behalf of MTDC. Given that HTR originally referred MTDC to Calderwood & Harkness, Ms. Hargrove may have additional perspective on the working relationship between MTDC's in-house team and outside counsel that could inform MTDC's selection process. Any firm retained by MTDC for the BIPA-related matters should be prepared to coordinate closely with HTR to avoid duplication of effort, ensure consistency in litigation strategy, and manage the allocation of responsibilities between firms.

VII. NEXT STEPS

The following steps are recommended to complete the referral process:

1. Obtain Approval for Referral Letter. Obtain approval from Helen Drazkowski, General Counsel, and Lawrence Keating, Senior Partner and Chair of the Conflicts Committee, to transmit the referral letter to Terrence Whitfield at MTDC. This memorandum is submitted for their review and approval.

2. Transmit Referral Letter to MTDC. Following receipt of the necessary approvals, send the referral letter to Mr. Whitfield at MTDC providing contact information for and brief descriptions of both APC and NM. The target date for transmission of the referral letter is May 20, 2024. The referral letter will not disclose the identity of the existing client giving rise to the conflict, the nature of the conflict, or any other information that is subject to Calderwood & Harkness's obligations of confidentiality under the Illinois Rules of Professional Conduct.

3. Send Courtesy Notifications to Recommended Firms. Send courtesy heads-up emails to Victoria Aldridge at APC and Damien Northfield at NM advising that MTDC may be in contact regarding a potential engagement. The courtesy notifications will include a high-level, non-privileged description of the matter — specifically, that MTDC is a governmental transit authority seeking representation in connection with BIPA-related regulatory enforcement defense, putative class-action defense, and remediation counseling. The notifications will not disclose any privileged information, including the reason for Calderwood & Harkness's declination of the engagement, the identity of the existing client giving rise to the conflict, or any confidential information provided to the firm by MTDC during the intake process.

4. Confirm Termination of Calderwood & Harkness's Obligations. Calderwood & Harkness's obligation to MTDC ends with the transmission of the referral letter. The firm should not provide any substantive legal advice to MTDC, should not participate in any discussions regarding the merits or strategy of the underlying matters, and should not share any confidential information regarding the existing client relationship that gave rise to the conflict. Any further communications from MTDC should be directed to the recommended firms. If Mr. Whitfield or any other MTDC representative contacts Calderwood & Harkness with substantive questions regarding the BIPA matters, the firm should politely decline and refer the inquiry to the recommended firms.

5. Document Retention and Filing. File this memorandum and all related correspondence — including the declination notice to MTDC, the referral letter, the courtesy notifications to APC and NM, and any intake materials received from MTDC — in the firm's document management system under Matter No. 1031-00001. The file should be classified under Retention Category: Declined Engagements — Conflicts, which carries a seven-year retention period under Calderwood & Harkness's records-management policy (Firm Policy No. RM-2019-04, Records Retention Schedule, Section IV.B.3). At the expiration of the retention period, the file will be reviewed for destruction in accordance with standard firm procedures.

VIII. CONFIDENTIALITY NOTICE

This memorandum is privileged and confidential attorney work product, prepared exclusively for internal use by Calderwood & Harkness LLP in connection with the Conflicts Committee's determination regarding Matter No. 1031-00001. It is protected by the attorney-client privilege, the attorney work-product doctrine, and all other applicable privileges and protections.

This memorandum must not be shared with MTDC, any recommended firm (including APC and NM), or any other external party. It must not be referenced in, attached to, or excerpted in the referral letter to MTDC or the courtesy notifications to APC and NM. Any inquiries from external parties regarding the firm's declination of the MTDC engagement or the referral process should be directed to Rachel Bernstein or Helen Drazkowski.

The referral letter to MTDC will not disclose the identity of the existing client whose representation gives rise to the conflict, the nature or details of the conflict, or any other information that is subject to Calderwood & Harkness's obligations of confidentiality under the Illinois Rules of Professional Conduct, including Rules 1.6 (Confidentiality of Information), 1.7 (Conflict of Interest: Current Clients), and 1.9 (Duties to Former Clients). The firm's declination was communicated to MTDC in a manner consistent with these obligations, and all future communications regarding the matter should maintain this standard.

Prepared by Devon Archer, Associate, Labor & Employment Practice Group, under the direction of Rachel Bernstein, Partner, Privacy & Data Security Practice Group.

Reviewed and submitted for approval on May 17, 2024.

RACHEL BERNSTEIN Partner, Privacy & Data Security Practice Group Calderwood & Harkness LLP

Signature: ________

Date: ________

DEVON ARCHER Associate, Labor & Employment Practice Group Calderwood & Harkness LLP

Signature: ________

Date: ________

APPROVAL:

HELEN DRAZKOWSKI General Counsel, Calderwood & Harkness LLP

Approved Approved with modifications (see attached) Not approved

Signature: ________

Date: ________

LAWRENCE KEATING Senior Partner & Chair, Conflicts Committee Calderwood & Harkness LLP

Approved Approved with modifications (see attached) Not approved

Signature: ________

Date: ________

CALDERWOOD & HARKNESS LLP — INTERNAL MEMORANDUM — PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT — Matter No. 1031-00001 (Declined) — Not for Distribution Outside Calderwood & Harkness LLP

CALDERWOOD & HARKNESS LLP
INTERNAL MEMORANDUM
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
This memorandum constitutes attorney work product and is protected by the attorney-client privilege, the work-product doctrine, and all other applicable privileges. It is intended solely for internal use by Calderwood & Harkness LLP attorneys and authorized personnel. Any unauthorized review, use, disclosure, or distribution is strictly prohibited.
TO: Rachel Bernstein, Partner, Privacy & Data Security Practice Group Miriam Calloway, Partner, Healthcare & Life Sciences Practice Group
FROM: Rachel Bernstein, Partner, Privacy & Data Security Practice Group Devon Archer, Associate, Labor & Employment Practice Group
DATE: May 17, 2024
RE: Recommended Alternative Counsel for Metropolitan Transit Development Corp. — Matter No. 1031-00001 (Declined)
COPIES: Helen Drazkowski, General Counsel, Calderwood & Harkness LLP Lawrence Keating, Senior Partner & Chair, Conflicts Committee Colleen Farrow, Director, Conflicts & New Business
CLASSIFICATION: Internal — Not for Distribution Outside Calderwood & Harkness LLP
I. PURPOSE
This memorandum identifies qualified alternative counsel to whom the firm may refer Metropolitan Transit Development Corp. ("MTDC") following the Conflicts Committee's determination, rendered on May 14, 2024, that the firm's proposed engagement of MTDC (Matter No. 1031-00001) must be declined due to an unwaivable conflict of interest under Illinois Rules of Professional Conduct 1.7(a)(1) (direct adversity) and 1.7(a)(2) (material limitation). As the Committee concluded, the conflict is structural in nature and cannot be remedied through informed consent under Rule 1.7(b), because the firm does not reasonably believe it could provide competent and diligent representation to MTDC while simultaneously maintaining its existing obligations to the adverse client. Accordingly, the proposed engagement was formally declined.
MTDC's General Counsel, Terrence Whitfield, was notified of the firm's declination by telephone on the morning of May 17, 2024, by Rachel Bernstein and by follow-up email confirming the substance of that conversation. Consistent with the firm's standard practice, the communication did not disclose the identity of the existing client or the specific nature of the conflict. During that conversation, the firm offered to facilitate a referral to qualified alternative counsel possessing the requisite expertise in Illinois biometric-data privacy law, regulatory enforcement defense, and class-action litigation. Mr. Whitfield indicated that MTDC would welcome such a referral and asked that it be provided as promptly as practicable given the time-sensitive nature of the pending Attorney General investigation and the putative class action.
A formal referral letter will be sent to Mr. Whitfield separately following approval of this memorandum by General Counsel Helen Drazkowski and Conflicts Committee Chair Lawrence Keating. The referral letter will provide contact information and summary qualifications for each recommended firm identified herein, without disclosing any privileged information or the basis for the firm's declination.
II. BACKGROUND ON THE MTDC MATTER
A. The Client
MTDC is a unit of local government and special-purpose transit authority organized and existing under the Illinois Local Mass Transit District Act (70 ILCS 3610/0.01 et seq.). MTDC is headquartered at 550 West Harrison Street, Suite 1400, Chicago, Illinois 60607. MTDC operates a multi-modal public transit system serving the greater Chicago metropolitan area, with an annual operating budget of approximately $3.2 billion. Its executive leadership includes Darnell Okafor, Executive Director; Terrence Whitfield, General Counsel; and Lucia Marchetti, Chief Information Security Officer ("CISO"). According to Mr. Whitfield, MTDC's annual outside-counsel budget is approximately $14.8 million, indicating the client's ability and institutional willingness to engage sophisticated outside counsel for complex litigation and regulatory matters.
B. The Proposed Engagement
MTDC sought representation by Calderwood & Harkness in connection with the following interrelated matters:
(a) Defense of Civil Investigative Demand. On April 22, 2024, the Illinois Attorney General's Bureau of Civil Rights issued a Civil Investigative Demand ("CID") to MTDC, bearing Reference No. CRB-2024-0417. The CID alleges that MTDC's workforce-monitoring and timekeeping systems collected, stored, and used biometric identifiers and biometric information — including fingerprint scans and facial-geometry data — from employees and certain contract personnel in violation of 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. The CID demands production of extensive categories of documents and data, imposes interrogatories, and requests depositions of designated MTDC custodians. The Attorney General's office has designated Ridgeway & Falk LLP (lead partner: Diane Falk; 401 East Adams Street, Suite 300, Springfield, Illinois 62701) as outside special counsel to assist in the investigation and any resulting enforcement proceedings.
(b) Defense of Putative Class Action. On April 29, 2024, a putative class action was filed against MTDC in the Circuit Court of Cook County, Chancery Division, captioned Ramirez et al. v. Metropolitan Transit Development Corp., Case No. 2024-CH-04417. The complaint was filed on behalf of approximately 12,400 current and former MTDC employees by Kessler, Brandt & O'Neill LLP, with Martin Kessler serving as lead class counsel and Yolanda Brandt serving as co-class counsel. The complaint alleges violations of BIPA Sections 15(a), 15(b), and 15(d), as well as related state-law privacy claims and employment-law claims. The named plaintiffs seek statutory damages under 740 ILCS 14/20, injunctive relief, and attorneys' fees and costs.
(c) Remediation Counseling. MTDC sought advice on the remediation of its biometric-data collection, storage, retention, and destruction practices to achieve prospective compliance with BIPA and PIPA, including development of revised written policies, informed-consent protocols, data-retention schedules, and vendor-management procedures.
(d) Cross-Claims and Indemnification Proceedings. MTDC indicated the likely need to assert cross-claims and pursue indemnification against its technology vendors, most prominently Pinnacle Workforce Analytics, Inc. ("Pinnacle"), under the terms of the Master Software License and Services Agreement between MTDC and Pinnacle dated June 15, 2021 (the "Pinnacle MSLSA"). The Pinnacle MSLSA contains indemnification, defense, and hold-harmless provisions that MTDC believes obligate Pinnacle to defend and indemnify MTDC against claims arising from the operation of Pinnacle's biometric-data processing modules. MTDC may also seek contribution or indemnification from additional vendors whose identity has not yet been confirmed.
(e) Related Employment Counseling. MTDC also sought ongoing employment counseling concerning its workforce-monitoring policies, including review and revision of employee handbooks, collective-bargaining agreement implications, and compliance with applicable labor and employment regulations governing electronic monitoring and surveillance in the workplace.
C. Exposure Estimate
MTDC's exposure in this matter is significant. Under BIPA Section 20, a prevailing party may recover statutory damages of $1,000 per violation for negligent violations and $5,000 per violation for intentional or reckless violations. Based on a putative class of approximately 12,400 current and former employees, MTDC's consulting actuary, Lakefront Actuarial Advisors, LLC (Felix Drummond, FSA, MAAA), has estimated MTDC's aggregate statutory-damages exposure at between $12.4 million (assuming a negligent-violation floor of 12,400 class members multiplied by $1,000 per violation) and $62.0 million (assuming an intentional-violation ceiling of 12,400 class members multiplied by $5,000 per violation). These figures do not include potential attorneys' fees awards, costs of injunctive relief, penalties that may be sought by the Attorney General in a separate enforcement proceeding, or the costs of remediation.
D. Referral Source
MTDC was referred to Calderwood & Harkness by Hargrove, Tillman & Reese LLP ("HTR"), specifically by Constance Hargrove, a partner at HTR who serves as MTDC's primary outside litigation counsel. Ms. Hargrove referred MTDC to Calderwood & Harkness on the basis of the firm's recognized expertise in data-privacy and biometric-information-privacy law. HTR continues to serve as MTDC's general outside litigation counsel on other matters and will likely coordinate with whatever firm MTDC retains for the BIPA-related matters.
E. Fee Estimate
Based on the scope of the proposed engagement, the firm's initial estimate of professional fees ranged from $3.5 million to $5.2 million over an anticipated 18- to 24-month engagement period, encompassing the AG enforcement defense, the class-action defense, cross-claim and indemnification proceedings, and remediation counseling.
F. Fiscal-Agent and Bond-Covenant Considerations
Meridian Trust National Bank (Chief Fiduciary Officer: Angela Tran) serves as MTDC's fiscal agent and bond trustee. Mr. Whitfield has indicated that material BIPA liability — particularly liability at or approaching the upper end of the exposure range — could trigger reporting obligations under MTDC's Continuing Disclosure Agreement with Meridian Trust and may implicate covenants in MTDC's outstanding revenue-bond indentures. This adds an additional layer of urgency and complexity to the engagement, and any firm retained by MTDC should be aware of these municipal-finance dimensions.
III. CRITERIA FOR RECOMMENDED COUNSEL
In evaluating potential alternative counsel for referral, this memorandum applied the following selection criteria, which reflect the specific demands of the MTDC matter and the characteristics necessary for effective representation of a governmental transit authority facing simultaneous regulatory enforcement and private class-action litigation:
1. Substantive Expertise. The recommended firm must possess demonstrated experience defending BIPA enforcement actions and BIPA class actions in Illinois state and federal courts. Given the dual nature of MTDC's exposure — both an Attorney General CID and investigation, and a putative class action in Cook County — the firm must have attorneys with proven track records in both regulatory enforcement defense and complex class-action litigation in the biometric-data privacy context. Experience with PIPA and related Illinois data-privacy statutes is also relevant. Familiarity with the evolving landscape of BIPA jurisprudence, including recent Illinois Supreme Court decisions regarding accrual, the statute of limitations, and the scope of statutory damages, is essential.
2. Government-Client Experience. The recommended firm must have familiarity with the unique considerations that attend the representation of governmental entities. These include, but are not limited to, sovereign-immunity doctrines and their applicability (or inapplicability) to BIPA claims against governmental bodies; open-records and Freedom of Information Act obligations that may affect litigation strategy and document handling; legislative and appropriations processes that may constrain settlement authority or remediation funding; governmental procurement rules that may govern the engagement of outside counsel and expert consultants; and public-accountability and transparency expectations that inform communications strategy and media relations. The firm should understand the institutional dynamics of representing an entity whose leadership reports to a board of directors (or its equivalent) composed of appointed or elected officials, and whose litigation decisions may be subject to public scrutiny.
3. Capacity and Resources. The recommended firm must have sufficient bench depth to manage simultaneous defense of an Attorney General enforcement action and a putative class action involving approximately 12,400 class members, together with potential cross-claim and indemnification proceedings against Pinnacle Workforce Analytics, Inc., and possibly additional technology vendors. The engagement will require significant e-discovery capabilities, the ability to manage large-scale document productions related to biometric-data systems, and the capacity to handle parallel discovery tracks in the AG investigation and the Cook County litigation. The firm must be able to staff the matter with experienced partners, senior associates, and junior associates in sufficient numbers to meet the anticipated pace and volume of the litigation.
4. No Conflicts of Interest. The recommended firm must have no conflicts of interest with MTDC, the Illinois Attorney General's Office, Kessler, Brandt & O'Neill LLP (class counsel), Pinnacle Workforce Analytics, Inc., or any other identified party to the matter. This criterion is of particular importance given that Calderwood & Harkness's own inability to undertake the engagement stems from a conflicts issue. It is noted, however, that Calderwood & Harkness's preliminary review of its own conflicts database is not a substitute for each recommended firm's independent conflicts-clearance process, and MTDC should independently verify the absence of conflicts through each firm's own intake and conflicts procedures before entering into any engagement.
5. Geographic Proximity. The recommended firm should be based in Chicago or maintain a substantial Chicago office presence. The Cook County litigation, coordination with MTDC's headquarters, interaction with the Illinois Attorney General's office, and proximity to the Circuit Court of Cook County all require a meaningful on-the-ground presence in the Chicago metropolitan area. While some aspects of the engagement (particularly remediation counseling and vendor negotiations) could be handled remotely, the core litigation work benefits significantly from geographic proximity.
6. Rate Competitiveness. The recommended firm's billing rates should be within a range appropriate for a governmental transit authority operating within defined outside-counsel budget parameters. As noted above, MTDC's annual outside-counsel budget is approximately $14.8 million across all matters. While the BIPA matter is expected to represent a significant share of that budget during the engagement period, rate proposals should reflect the realities of public-sector client representation, including the expectation of rate structures that are competitive with — and ideally somewhat below — rates charged to comparable private-sector clients for similar work.
IV. RECOMMENDED FIRM A: ALDRIDGE, PAULSON & CHO LLP
A. Firm Overview
Full Name: Aldridge, Paulson & Cho LLP ("APC")
Address: 150 North Michigan Avenue, Suite 3500, Chicago, Illinois 60601
Entity Type: Illinois limited liability partnership
Contact Partner: Victoria Aldridge, Partner and BIPA Practice Lead
Telephone: (312) 555-8200
Email: valdridge@apclaw.com
APC is a mid-size, Chicago-based litigation and regulatory defense firm with approximately 120 attorneys. The firm was founded in 2007 and has since developed a strong reputation in Illinois for its regulatory enforcement defense practice, its commercial litigation capabilities, and, in recent years, its dedicated biometric-information privacy practice. APC's client base includes employers across multiple industries, technology companies, and — notably for MTDC's purposes — governmental and quasi-governmental entities. The firm maintains a single office in Chicago, which provides deep familiarity with Cook County courts and Illinois state regulatory agencies.
B. Relevant Experience and Qualifications
Victoria Aldridge is widely recognized as one of the leading BIPA defense practitioners in Illinois. She has served as lead counsel in over two dozen BIPA class actions and individual actions in both Illinois state and federal courts, and has represented clients in at least four BIPA-related investigations or enforcement proceedings initiated by the Illinois Attorney General's office. Ms. Aldridge's practice encompasses the full spectrum of BIPA defense work, including motions to dismiss, class-certification opposition, discovery management, settlement negotiations, and trial preparation. She is a frequent speaker at Illinois State Bar Association and American Bar Association programs on biometric-data privacy law and has published extensively on BIPA developments, including articles analyzing the Illinois Supreme Court's decisions in Rosenbach v. Six Flags Entertainment Corp. and Cothron v. White Castle System, Inc.
APC's BIPA practice group includes approximately eight partners and twelve associates with significant BIPA and data-privacy litigation experience. This bench depth is directly relevant to the MTDC engagement, which will require simultaneous attention to the AG enforcement action, the Cook County class-action defense, potential cross-claims against Pinnacle Workforce Analytics, and remediation counseling. APC's team has demonstrated particular strengths in the following areas:
•  BIPA Class-Action Defense. APC has defended employers and technology companies against BIPA class actions involving employee biometric data, customer biometric data, and contractor biometric data. The firm's experience includes defending cases involving fingerprint-based timekeeping systems, facial-recognition access-control systems, and voice-print authentication systems — all of which are potentially relevant to MTDC's biometric-data practices.
•  Large-Scale Document Productions. APC has managed document productions in BIPA matters involving millions of records related to biometric-data systems, including system-architecture documentation, database schemas, consent records, data-retention logs, and vendor communications. The firm employs dedicated litigation-technology specialists and utilizes advanced e-discovery platforms capable of handling the volume and complexity of productions that the MTDC matter is likely to entail.
•  BIPA Compliance and Remediation. In addition to its litigation capabilities, APC advises clients on BIPA compliance programs and remediation strategies, including the development of written biometric-information policies, informed-consent mechanisms, data-retention and destruction schedules, and vendor-management frameworks. This experience is directly applicable to the remediation-counseling component of MTDC's needs.
•  Attorney General Enforcement Defense and CID Response. APC has represented clients in responding to CIDs issued by the Illinois Attorney General's office in connection with consumer-protection and data-privacy investigations. Ms. Aldridge is familiar with the procedural requirements and strategic considerations associated with CID responses, including the assertion of applicable privileges, the negotiation of production timelines, and the management of parallel proceedings where both an AG investigation and private litigation are pending.
•  Governmental and Quasi-Governmental Client Experience. APC has represented governmental and quasi-governmental entities in regulatory enforcement matters, including transit authorities, municipal agencies, and public universities. While the firm's governmental practice is not as extensive as its private-sector employer defense work, APC attorneys have demonstrated familiarity with sovereign-immunity issues, open-records obligations, public-procurement requirements, and the institutional dynamics of representing public-sector clients. This experience is relevant to MTDC's status as a unit of local government.
C. Conflicts Status
Based on a preliminary review conducted by Rachel Bernstein and Devon Archer of Calderwood & Harkness's own conflicts database, APC does not appear in our system in connection with any party to the MTDC matter, including MTDC itself, the Illinois Attorney General's Office, Kessler, Brandt & O'Neill LLP, Pinnacle Workforce Analytics, Inc., Hargrove, Tillman & Reese LLP, Ridgeway & Falk LLP, Lakefront Actuarial Advisors, LLC, and Meridian Trust National Bank.
Caveat: This preliminary review is limited to Calderwood & Harkness's own records and is not a substitute for APC's independent conflicts-clearance process. MTDC must independently confirm through APC's own conflicts-intake procedures that no conflicts of interest exist with respect to any party to the matter, any affiliated or related entity, or any individual associated with the matter. MTDC should provide APC with a comprehensive list of all known parties, witnesses, and interested persons to facilitate a thorough conflicts check.
D. Rate Information
APC's published rates for government-client engagements are understood to be competitive with those of other mid-size Chicago litigation firms and are believed to fall within the range appropriate for a governmental transit authority with MTDC's outside-counsel budget parameters. APC has historically offered public-sector clients rate structures that reflect a modest discount from its standard commercial rates, and the firm has experience with alternative fee arrangements, including blended rates and capped fees, that MTDC may wish to explore.
We recommend that MTDC negotiate rates and engagement terms directly with APC, and that any fee arrangement be documented in a written engagement letter that addresses billing procedures, staffing commitments, budget estimates, and reporting requirements consistent with MTDC's internal governance and procurement policies.
V. RECOMMENDED FIRM B: NORTHFIELD McKAY LLP
A. Firm Overview
Full Name: Northfield McKay LLP ("NM")
Address: 311 South Wacker Drive, Suite 4800, Chicago, Illinois 60606
Entity Type: Illinois limited liability partnership
Contact Partner: Damien Northfield, Partner and Data-Privacy Litigation Lead
Telephone: (312) 555-6100
Email: dnorthfield@northfieldmckay.com
NM is a Chicago-based litigation firm with approximately 85 attorneys. The firm has developed a nationally recognized data-privacy and cybersecurity practice that spans both litigation and counseling. Founded in 2012 by Damien Northfield and Margaret McKay, the firm has grown rapidly by focusing on the intersection of technology, privacy, and complex litigation. NM's client base includes technology companies, healthcare systems, financial institutions, and employers across a range of industries. The firm's single-office model — concentrated in downtown Chicago — provides deep familiarity with the Cook County court system and the Illinois regulatory landscape, while its national reputation in data-privacy law attracts engagements from clients across the country.
B. Relevant Experience and Qualifications
Damien Northfield is a leading data-privacy litigator with extensive experience in BIPA defense, data-breach class-action litigation, and regulatory investigations involving biometric and personal data. Mr. Northfield has served as lead counsel in numerous BIPA class actions and has represented clients in investigations and enforcement proceedings initiated by both the Illinois Attorney General's office and the Federal Trade Commission. His practice is distinguished by its integrated approach, combining aggressive litigation defense with strategic compliance counseling designed to position clients for favorable outcomes in both the courtroom and the regulatory arena.
NM's data-privacy and cybersecurity practice group includes approximately six partners and ten associates with concentrated experience in privacy litigation and counseling. The firm's capabilities are particularly well-suited to the multifaceted nature of the MTDC engagement:
•  BIPA Defense Litigation. NM has defended clients in BIPA class actions and individual actions involving employee biometric data, including cases arising from fingerprint-based and facial-recognition-based workforce-management systems. The firm has achieved favorable outcomes through dispositive motions, class-certification opposition, and negotiated settlements. Mr. Northfield's familiarity with the current state of BIPA jurisprudence — including recent developments regarding per-scan versus per-person damages theories, the applicability of the Workers' Compensation Act exclusivity bar, and the scope of BIPA's private right of action — would be directly valuable to MTDC's defense.
•  Employment-Related Privacy Disputes. NM has particular experience with employment-related privacy disputes, including class actions involving large employee populations. The firm has defended employers against claims arising from electronic monitoring, workplace surveillance, and biometric-data collection practices. This experience aligns closely with the employment-privacy dimensions of the MTDC matter, including the putative class of approximately 12,400 current and former employees.
•  Data-Privacy Remediation and Compliance Counseling. NM's counseling practice is a significant differentiator. The firm has advised numerous organizations on the development and implementation of data-privacy remediation programs, including comprehensive BIPA compliance frameworks. NM's remediation work encompasses written policy development, informed-consent protocol design, data-mapping and inventory exercises, data-retention and destruction scheduling, vendor due-diligence and contractual remediation, employee training programs, and ongoing compliance monitoring. This capability is directly relevant to the remediation-counseling component of MTDC's needs, and NM's integrated litigation-and-counseling approach may allow MTDC to address its remediation obligations in a manner that is informed by — and strategically coordinated with — the firm's litigation defense strategy.
•  Parallel Proceedings. NM has experience managing parallel proceedings in which a client faces both regulatory enforcement (such as an AG investigation or CID) and private class-action litigation arising from the same underlying conduct. The firm is familiar with the strategic complexities of managing information flow between parallel proceedings, coordinating discovery across multiple forums, and protecting privileged communications in multi-front engagements.
•  Public-Sector Client Experience. While NM's practice is primarily oriented toward private-sector clients, the firm has represented public-sector entities and entities with significant public-accountability obligations, including a regional healthcare authority and a publicly funded research institution, in data-privacy disputes. Mr. Northfield has demonstrated awareness of the institutional considerations that attend public-sector representation, including open-records obligations, public-meeting requirements, and the political dimensions of litigation involving government agencies.
C. Conflicts Status
Based on a preliminary review conducted by Rachel Bernstein and Devon Archer of Calderwood & Harkness's own conflicts database, NM does not appear in our system in connection with any party to the MTDC matter, including MTDC itself, the Illinois Attorney General's Office, Kessler, Brandt & O'Neill LLP, Pinnacle Workforce Analytics, Inc., Hargrove, Tillman & Reese LLP, Ridgeway & Falk LLP, Lakefront Actuarial Advisors, LLC, and Meridian Trust National Bank.
Caveat: As with APC, this preliminary review is limited to Calderwood & Harkness's own records and does not substitute for NM's independent conflicts-clearance process. MTDC must independently confirm through NM's own conflicts-intake procedures that no conflicts of interest exist with respect to any party to the matter, any affiliated or related entity, or any individual associated with the matter. MTDC should provide NM with a comprehensive list of all known parties, witnesses, and interested persons to facilitate a thorough conflicts check.
D. Rate Information
NM's rates for complex litigation engagements are understood to be competitive with those of other specialized Chicago litigation firms of comparable size and expertise. Given the firm's focus on data-privacy and cybersecurity matters, its rate structure reflects the premium associated with specialized practice areas, but the firm has a history of offering competitive arrangements to institutional clients and repeat engagements. NM has experience with alternative fee arrangements, including hybrid fee structures that blend hourly rates with success-based or outcome-based components.
We recommend that MTDC negotiate rates and engagement terms directly with NM, and that any fee arrangement be documented in a written engagement letter consistent with MTDC's internal governance requirements and procurement policies.
VI. COMPARATIVE ASSESSMENT AND RECOMMENDATION
Both APC and NM are well-qualified firms, and either would be capable of providing competent and effective representation to MTDC in connection with the matters described in this memorandum. Each firm possesses the substantive expertise, litigation capacity, and geographic presence necessary to manage the simultaneous defense of the Attorney General enforcement action and the Cook County putative class action, as well as the ancillary cross-claim, indemnification, and remediation-counseling matters.
That said, each firm brings somewhat different strengths to the engagement, and the following differentiating factors may be relevant to MTDC's evaluation:
•  APC (Victoria Aldridge) may have a slight edge in dedicated BIPA defense experience and prior Attorney General enforcement-action work. Ms. Aldridge's extensive track record in BIPA class-action defense — spanning over two dozen matters — and her specific experience in AG enforcement proceedings position APC as a strong choice for a client whose most immediate and pressing needs center on litigation defense. APC's larger attorney count (approximately 120 attorneys) may also provide somewhat greater bench depth and staffing flexibility for a matter of this size and complexity. Additionally, APC's experience representing governmental and quasi-governmental entities, while not the firm's primary focus, provides a foundation of familiarity with the institutional considerations that MTDC will present.
•  NM (Damien Northfield) may offer additional strengths in the data-privacy remediation and compliance counseling components that MTDC will need beyond pure litigation defense. NM's integrated litigation-and-counseling model allows the firm to approach BIPA defense with an eye toward long-term compliance and risk mitigation, which may prove valuable as MTDC seeks not only to defend against existing claims but also to restructure its biometric-data practices on a going-forward basis. NM's experience with employment-related privacy disputes involving large employee populations is also particularly well-aligned with the class-action component of the MTDC matter.
We recommend that both firms be presented to MTDC in the referral letter and that MTDC evaluate each based on its own institutional priorities and preferences. Among the factors that MTDC should consider in making its selection are rate proposals, team composition and staffing plans, the proposed engagement partner's availability and personal commitment to the matter, the firm's approach to managing parallel proceedings, and the overall chemistry between the firm's proposed team and MTDC's in-house legal and executive leadership — specifically Terrence Whitfield (General Counsel), Lucia Marchetti (CISO), and Darnell Okafor (Executive Director).
We further note that MTDC may wish to consult with Hargrove, Tillman & Reese LLP (Constance Hargrove), its existing outside litigation counsel, regarding the coordination between any newly retained BIPA counsel and HTR's ongoing general litigation work on behalf of MTDC. Given that HTR originally referred MTDC to Calderwood & Harkness, Ms. Hargrove may have additional perspective on the working relationship between MTDC's in-house team and outside counsel that could inform MTDC's selection process. Any firm retained by MTDC for the BIPA-related matters should be prepared to coordinate closely with HTR to avoid duplication of effort, ensure consistency in litigation strategy, and manage the allocation of responsibilities between firms.
VII. NEXT STEPS
The following steps are recommended to complete the referral process:
1. Obtain Approval for Referral Letter. Obtain approval from Helen Drazkowski, General Counsel, and Lawrence Keating, Senior Partner and Chair of the Conflicts Committee, to transmit the referral letter to Terrence Whitfield at MTDC. This memorandum is submitted for their review and approval.
2. Transmit Referral Letter to MTDC. Following receipt of the necessary approvals, send the referral letter to Mr. Whitfield at MTDC providing contact information for and brief descriptions of both APC and NM. The target date for transmission of the referral letter is May 20, 2024. The referral letter will not disclose the identity of the existing client giving rise to the conflict, the nature of the conflict, or any other information that is subject to Calderwood & Harkness's obligations of confidentiality under the Illinois Rules of Professional Conduct.
3. Send Courtesy Notifications to Recommended Firms. Send courtesy heads-up emails to Victoria Aldridge at APC and Damien Northfield at NM advising that MTDC may be in contact regarding a potential engagement. The courtesy notifications will include a high-level, non-privileged description of the matter — specifically, that MTDC is a governmental transit authority seeking representation in connection with BIPA-related regulatory enforcement defense, putative class-action defense, and remediation counseling. The notifications will not disclose any privileged information, including the reason for Calderwood & Harkness's declination of the engagement, the identity of the existing client giving rise to the conflict, or any confidential information provided to the firm by MTDC during the intake process.
4. Confirm Termination of Calderwood & Harkness's Obligations. Calderwood & Harkness's obligation to MTDC ends with the transmission of the referral letter. The firm should not provide any substantive legal advice to MTDC, should not participate in any discussions regarding the merits or strategy of the underlying matters, and should not share any confidential information regarding the existing client relationship that gave rise to the conflict. Any further communications from MTDC should be directed to the recommended firms. If Mr. Whitfield or any other MTDC representative contacts Calderwood & Harkness with substantive questions regarding the BIPA matters, the firm should politely decline and refer the inquiry to the recommended firms.
5. Document Retention and Filing. File this memorandum and all related correspondence — including the declination notice to MTDC, the referral letter, the courtesy notifications to APC and NM, and any intake materials received from MTDC — in the firm's document management system under Matter No. 1031-00001. The file should be classified under Retention Category: Declined Engagements — Conflicts, which carries a seven-year retention period under Calderwood & Harkness's records-management policy (Firm Policy No. RM-2019-04, Records Retention Schedule, Section IV.B.3). At the expiration of the retention period, the file will be reviewed for destruction in accordance with standard firm procedures.
VIII. CONFIDENTIALITY NOTICE
This memorandum is privileged and confidential attorney work product, prepared exclusively for internal use by Calderwood & Harkness LLP in connection with the Conflicts Committee's determination regarding Matter No. 1031-00001. It is protected by the attorney-client privilege, the attorney work-product doctrine, and all other applicable privileges and protections.
This memorandum must not be shared with MTDC, any recommended firm (including APC and NM), or any other external party. It must not be referenced in, attached to, or excerpted in the referral letter to MTDC or the courtesy notifications to APC and NM. Any inquiries from external parties regarding the firm's declination of the MTDC engagement or the referral process should be directed to Rachel Bernstein or Helen Drazkowski.
The referral letter to MTDC will not disclose the identity of the existing client whose representation gives rise to the conflict, the nature or details of the conflict, or any other information that is subject to Calderwood & Harkness's obligations of confidentiality under the Illinois Rules of Professional Conduct, including Rules 1.6 (Confidentiality of Information), 1.7 (Conflict of Interest: Current Clients), and 1.9 (Duties to Former Clients). The firm's declination was communicated to MTDC in a manner consistent with these obligations, and all future communications regarding the matter should maintain this standard.
Prepared by Devon Archer, Associate, Labor & Employment Practice Group, under the direction of Rachel Bernstein, Partner, Privacy & Data Security Practice Group.
Reviewed and submitted for approval on May 17, 2024.
RACHEL BERNSTEIN Partner, Privacy & Data Security Practice Group Calderwood & Harkness LLP
Signature: ________
Date: ________
DEVON ARCHER Associate, Labor & Employment Practice Group Calderwood & Harkness LLP
Signature: ________
Date: ________
APPROVAL:
HELEN DRAZKOWSKI General Counsel, Calderwood & Harkness LLP
Approved  Approved with modifications (see attached)  Not approved
Signature: ________
Date: ________
LAWRENCE KEATING Senior Partner & Chair, Conflicts Committee Calderwood & Harkness LLP
Approved  Approved with modifications (see attached)  Not approved
Signature: ________
Date: ________
CALDERWOOD & HARKNESS LLP — INTERNAL MEMORANDUM — PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT — Matter No. 1031-00001 (Declined) — Not for Distribution Outside Calderwood & Harkness LLP

CALDERWOOD & HARKNESS LLP

INTERNAL MEMORANDUM

I. PURPOSE

II. BACKGROUND ON THE MTDC MATTER

III. CRITERIA FOR RECOMMENDED COUNSEL

IV. RECOMMENDED FIRM A: ALDRIDGE, PAULSON & CHO LLP

VI. COMPARATIVE ASSESSMENT AND RECOMMENDATION

VII. NEXT STEPS

VIII. CONFIDENTIALITY NOTICE

APPROVAL:

Record

Parties

Dates

Amounts