In re Sony Gaming Networks & Customer Data Security Breach Litigation
2012 U.S. Dist. LEXIS 146971
S.D. Cal.2012Background
- This MDL involves a data breach of Sony's PlayStation Network and related services affecting a consumer class.
- Plaintiffs allege Sony and related entities failed to implement industry-standard safeguards, exposing Personal Information (names, addresses, payment data, login credentials).
- PSN/Qriocity/SOE outages occurred for about a month, restricting access to online services and Third Party Services during the breach.
- Sony acknowledged the breach, announced interim measures, and offered limited compensation; plaintiffs seek damages and other relief under various CA statutes.
- Plaintiffs filed a Consolidated Class Action Complaint; Sony moved to dismiss under Rule 12(b)(1) and Rule 12(b)(6) and for judicial notice.
- The court granted in part and denied in part, granting leave to amend on several claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue SOE and SCA | Plaintiffs allege joint conduct; class representatives may establish injury. | Named plaintiffs lack connection to SOE/SCA; claims fail for lack of standing. | Dismissal of claims against SOE and SCA with leave to amend. |
| Article III standing for all Defendants | Exposure of Personal Information constitutes injury-in-fact; ongoing effects justify standing. | Only speculative future harm; no cognizable injury shown for all plaintiffs. | Plaintiffs sufficiently allege injury-in-fact and a causal connection; standing denied only as to SOE/SCA. |
| Negligence claim viability | Economic losses and ongoing risk from data breach constitute cognizable damages; duty breached by inadequate safeguards. | Economic loss doctrine bars purely economic damages; lack of cognizable injury; Iqbal/Twombly concerns. | Negligence claim dismissed with leave to amend; economic loss doctrine and lack of cognizable injury discussed, but no adequate basis to sustain claim as pleaded. |
| UCL/FAL/CLRA standing and reliance | Misrepresentations harmed consumers; data breach and service outages constitute injury; claims parallel under multiple statutes. | Nonresident claims outside CA misrepresentations; lack of standing and failure to plead reliance. | Nonresident UCL/FAL/CLRA claims dismissed with prejudice; standing and reliance deficiencies noted for resident claims; leave to amend. |
| Restitution, injunctive relief, CLRA/other grounds | Courts allow restitution and injunctive relief under CA consumer statutes for unfair practices. | No direct benefit to Sony; no clear basis for restitution or injunctive relief; CLRA applicability limited here. | UCL/FAL restitution and injunctive relief claims dismissed with prejudice (restitution) or with leave to amend (injunctive); CLRA viability limited and dismissed. |
Key Cases Cited
- Krottner v. Starbucks Corp., 628 F.3d 1139 (9th Cir.2010) (injury-in-fact requires real and immediate threat of harm from data breach)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (standing elements: injury, causation, redressability)
- In re Tobacco II Cases, 46 Cal.4th 298 (Cal. 2009) (actual reliance required for misrepresentation claims unless material omission; reliance basics)
- Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir.2003) (fraud pleading requires who/what/when/where/how; Rule 9(b) specificity)
- Mazza v. American Honda Motor Co., 666 F.3d 581 (9th Cir.2012) (misrepresentation claims under consumer protection statutes; local law governs where misrepresentation received)