Game Over For Data Retention Suit Against Sony (Law360)

By Greg Ryan

A California federal judge tossed a proposed class action Friday accusing two Sony Corp. units of illegally storing and sharing customers' movie and video game purchase and rental histories, saying their retention of the data does not violate federal law.

U.S. District Judge Phyllis J. Hamilton granted a dismissal motion from Sony Computer Entertainment America LLC and Sony Network Entertainment International LLC as to the single claim brought by plaintiff Daniel Rodriguez, for violation of the Video Privacy Protection Act.

SCEA ran the Playstation Network online multiplayer gaming service before SNEI took it over. According to Rodriguez's amended complaint, SCEA and SNEI indefinitely retained rosters of every movie and video game their customers have ever rented or purchased. In addition, when the takeover occurred, SCEA illegally disclosed the information to SNEI, and afterward, SNEI disclosed the information to unknown, unnamed defendants for marketing purposes, the complaint said.

Judge Hamilton ruled the VPPA does not allow for allegations based only on a company's supposed retention of information.

As to the disclosure of the information, the judge held SCEA was allowed to share users' information with SNEI.

"The VPPA expressly permits video tape service 'providers' to disclose a consumer's personally identifiable information 'if the disclosure is incident to the ordinary course of business of' the provider, with 'ordinary course of business' further being defined as a 'transfer of ownership,'" the judge said.

Rodriguez did not adequately allege a disclosure affirmatively occurred, specify which parties received the disclosures or claim the disclosures fell outside the types of disclosures permitted by the VPPA, so his claims regarding SNEI's disclosure to the unnamed defendants also fail, according to Judge Hamilton.

"Accordingly, plaintiff has failed to adequately allege sufficient facts to state a claim for unlawful disclosure to Does under the VPPA," the judge said.

Judge Hamilton allowed Rodriguez to replead the allegations as SNEI's disclosure of data to the unnamed defendants. He did not allow him to replead the allegations as to the Sony units' retention of the data or SCEA's disclosure of data to SNEI.

Rodriguez has until May 16 to file an amended complaint.

The suit sought certification of a class of SCEA customers whose personal information the company retained for more than 30 days, as well as a similar subclass of SNEI customers and a subclass of customers whose personal information the companies disclosed without permission.

Rodriguez sought $2,500 in damages for each violation of the VPPA, as well as punitive damages.

Attorneys for Rodriguez and the Sony units could not be immediately reached for comment Monday.

Rodriguez is represented by Sean P. Reis, Jay Edelson, Rafey S. Balabanian and Ari J. Scharg of Edelson McGuire LLC.

The Sony units are represented by Michael G. Rhodes, Ray A. Sardo, Michelle C. Doolin and Nicolas J. Echevestre of Cooley LLP.

The case is Rodriguez v. Sony Computer Entertainment America LLC et al., case number 4:11-cv-04084, in the U.S. District Court for the Northern District of California.

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