Rodriguez v. Sony Computer Ent. - VPPA.pdf

FOR PUBLICATION

UNITED STATES COURT OF APPEALSFOR THE NINTH CIRCUIT

DANIEL RODRIGUEZ, individuallyand on behalf of all others similarlysituated,

Plaintiff-Appellant,

v.

SONY COMPUTER ENTERTAINMENTAMERICA, LLC, a Delaware limitedliability company; SONY NETWORKENTERTAINMENT INTERNATIONAL,LLC, a Delaware limited liabilitycompany,

Defendants-Appellees.

No. 12-17391

D.C. No.4:11-cv-04084-

PJH

OPINION

Appeal from the United States District Courtfor the Northern District of California

Phyllis J. Hamilton, Chief District Judge, Presiding

Argued and SubmittedFebruary 6, 2015San Francisco, California

Filed September 4, 2015

RODRIGUEZ V. SONY COMPUT. ENTMT AM.2

Before: Richard C. Tallman and Johnnie B. Rawlinson,Circuit Judges, and Raymond J. Dearie, Senior District

Judge.*

Opinion by Judge Rawlinson

SUMMARY**

Video Privacy Protection Act

The panel affirmed the district courts dismissal of anaction under the Video Privacy Protection Act.

The plaintiff alleged that two Sony corporations violatedthe Act by retaining his personally identifiable informationbeyond the Acts statutory limits and by disclosing hispersonal information between Sony entities. Agreeing withthe Sixth and Seventh Circuits, the panel held that the Actdoes not provide a private right of action to enforce itsretention requirements for video service providers. The panelheld that the alleged inter-corporate disclosures were exemptfrom the Acts non-disclosure requirements.

* The Honorable Raymond J. Dearie, Senior District Judge for the U.S.District Court for the Eastern District of New York, sitting by designation.

** This summary constitutes no part of the opinion of the court. It hasbeen prepared by court staff for the convenience of the reader.

RODRIGUEZ V. SONY COMPUT. ENTMT AM. 3

COUNSEL

Roger Perlstadt (argued), Edelson PC, Chicago, Illinois; SeanReis, The Reis Law Firm, A.P.C., Rancho Santa Margarita,California, for Plaintiff-Appellant.

Michael G. Rhodes (argued) and Ray A. Sardo, Cooley LLP,San Francisco, California; Lori R. Mason, Cooley LLP, PaloAlto, California; Michelle Doolin, Cooley LLP, San Diego,California, for Defendants-Appellees.

OPINION

RAWLINSON, Circuit Judge:

Appellant Daniel Rodriguez (Rodriguez) challenges thedistrict courts dismissal of his second amended complaintalleging that Appellees Sony Computer EntertainmentAmerica LLC (Sony Computer) and Sony NetworkEntertainment (Sony Network) International LLC(collectively Sony) violated the Video Privacy Protection Act(the Act) by retaining Rodriguezs personally identifiableinformation (personal information) beyond the Acts statutorylimits, and disclosing his personal information between Sonyentities. Rodriguez contends that the district court erred inconcluding that the Act does not provide a private right ofaction to enforce its retention requirements. Rodriguez alsotakes issue with the district courts conclusion that the intra-corporate disclosures were exempt from the Acts non-disclosure requirements. We affirm the district courtsrulings.


I. BACKGROUND

A. Statutory Background

The Act was promulgated in 1988 after the WashingtonCity Paper published Judge Robert Borks video rentalhistory during his failed Supreme Court confirmationproceedings. See Mollett v. Netflix, Inc., No. 12-17045, F.3d , 2015 WL 4591798, at *3 (9th Cir. July 31, 2015).

The Act restricts a video service providers retention anddisclosure of a consumers personal information. See18 U.S.C. 2710(b). A video service provider means anyperson, engaged in the business, in or affecting interstate orforeign commerce, of rental, sale, or delivery of prerecordedvideo cassette tapes or similar audio visual materials, or anyperson or other entity to whom a disclosure is made . . . Id.at 2710(b)(1). Under the Act, a consumer is any renter,purchaser, or subscriber of goods or services from a videotape service provider[.] Id. at 2710(a)(1). The Act definespersonally identifiable information as includinginformation which identifies a person as having requested orobtained specific video materials or services from a videotape service provider[.] Id. at 2710(a)(3). With respect tothe retention of a consumers personal information, the Actmandates that:

A person subject to this section shall destroypersonally identifiable information as soon aspracticable, but no later than one year fromthe date the information is no longernecessary for the purpose for which it wascollected and there are no pending requests ororders for access to such information under


subsection (b)(2) or (c)(2) or pursuant to acourt order.

Id. at 2710(e).

The Act also imposes liability for unlawful disclosure ofa consumers personal information:

(1) A video tape service provider whoknowingly discloses, to any person,personally identifiable information concerningany consumer of such provider shall be liableto the aggrieved person for the relief providedin subsection (d).1

1 The Act limits any relief to that provided in 18 U.S.C. 2710(d). See18 U.S.C. 2710(b). In turn, 18 U.S.C. 2710(d) provides:

Personally identifiable information obtained in anymanner other than as provided in this section shall notbe received in evidence in any trial, hearing, arbitration,or other proceeding in or before any court, grand jury,department, officer, agency, regulatory body, legislativecommittee, or other authority of the United States, aState, or a political subdivision of a State.

As the Seventh Circuit observed, it appears that 2710(b) mistakenlyreferences 2710(d) as a remedies provision. See Sterk v. RedboxAutomated Retail, LLC, 672 F.3d 535, 537 (7th Cir. 2012) (Sterk I)(observing that [t]he statute says (d), but this must be an error, not onlybecause the only relief provided there is exclusion of the personallyidentifiable information from evidence, but also because it is very unlikelythat a video tape service provider would ever be submitting, as evidencein a legal proceeding, personally identifiable information that the providerhad disclosed).


Id. at 2710(b). The Act also provides that [a]ny personaggrieved by any act of a person in violation of this sectionmay bring a civil action in a United States district court. 18 U.S.C. 2710(c).

Relevant to the present appeal, video service providers areexempt from liability for disclosure if the disclosure isincident to the ordinary course of business of the video tapeservice provider[.] 18 U.S.C. 2710(b)(2)(E). The Actdefines ordinary course of business as debt collectionactivities, order fulfillment, request processing, and thetransfer of ownership[.] Id. at 2710(a)(2).

B. Rodriguezs Claims Under the Act

There have been several permutations of Rodriguezsclaims against various Sony entities premised on theprovisions of the Act. In his original class action complaint,Rodriguez alleged that Sony Computer, as a video serviceprovider, violated the Act by maintaining and storing itscustomers personal information rather than destroying theinformation no later than one year after it was collected. Rodriguez averred that, in 2008, he was a registered user ofSonys PlayStation Network, which provides online gamingand video services streamed to a customers television. Rodriguez rented and purchased several video games andmovies through the PlayStation Network in 2009, but did notpurchase or rent any movies after Sony modified itsstreaming system in April, 2010. According to Rodriguez,Sony continued to store his personal information relating tothe movies that he had rented and purchased in violation ofthe Acts time limits for the storage of such information. Based on these allegations, Rodriguez sought statutory and


punitive damages, as well as injunctive relief and attorneysfees.

Sony sought dismissal of Rodriguezs complaint on thebasis that Rodriguez lacked standing to pursue his claimsunder the Act, and failed to properly allege any injury-in-fact. Sony also maintained that Rodriguez consented to Sonysretention of his information pursuant to Sonys terms ofservice and privacy policy.

In response, Rodriguez filed a first amended class actioncomplaint adding Sony Network as a defendant, and ten JohnDoe defendants. Rodriguez asserted that, subsequent to hisregistration as a PlayStation Network customer, SonyNetwork assumed control over the PlayStation Network andits related services. Rodriguez alleged that Sony Computerand Sony Network violated the Act when they impermissiblyshared Rodriguezs personal information with each otherduring the change in Sonys operations.

Rodriguez also alleged that Sony Networks utilization ofhis personal information for marketing purposes anddemographic studies demonstrated that his personalinformation had monetary value and that he never enteredinto an agreement permitting use of his personal informationfor these purposes. Rodriguez sought damages and injunctiverelief.

Sony filed a motion to dismiss Rodriguezs first amendedcomplaint, which the district court granted. The district courtdismissed with prejudice Rodriguezs claim premised onretention of his personal information because the Act does notprovide a private right of action for retention of information. The district court also dismissed with prejudice Rodriguezs


unlawful disclosure claim because the Act permits disclosureof personal information between related corporate entitiesduring the ordinary course of business. The district courtheld that the disclosures by Sony Computer and SonyNetwork were permitted because the disclosures occurredduring the transfer of operations. The district court alsoconcluded that Rodriguez failed to allege any unlawfuldisclosures to the Doe defendants. The district courtdismissed Rodriguezs unlawful disclosure claim withprejudice as it related to Sony Computer and Sony Network,but granted leave to amend regarding the Doe defendants.

Despite the limitations imposed by the district courtsdismissal order, Rodriguez filed a second amended classaction complaint with significantly revamped claims. Rodriguez alleged that, between 2009 and 2011, he rentedmovies from Sony Computer, but had not rented or purchasedany movies since August 28, 2011. Rodriguez averred that,although Sony Network assumed management over thePlayStation Network in 2011, the change in management didnot involve any transfer of ownership . . . According toRodriguez, Sony Computers disclosure of his personalinformation occurred prior to the change in management.

Rodriguezs original claim based on violations of the Actwas restated as three claims premised on unlawful retention,unlawful disclosure, and a newly minted breach of contractclaim. In support of his claim for unlawful retention,Rodriguez alleged that Sony Computer and Sony Networkretained his personal information for an indefinite period oftime in violation of the Act and lacked policies for the timelydestruction of this information. Rodriguez asserted that hewas injured because the unlawful retention was a violation ofhis privacy rights and he suffered economic damages


stemming from Sonys unauthorized use of his personalinformation. According to the Complaint, Rodriguezincurred monetary damages because a portion of the purchaseprice for each movie or video game was intended to pay for[Sony Computers] costs in timely destroying [customerspersonal information]. . . . Rodriguez alleged that heoverpaid for his movie purchases because the purchase orrental prices included costs associated with compliance withthe Act. Rodriguez also asserted that he was entitled to reliefpursuant to the Stored Communications Act for Sonyswillful and intentional violations.

For his unlawful disclosure claim, Rodriguez alleged thatSony Computer disclosed without consent Rodriguezspersonal information to Sony Network prior to the transfer ofmanagement in September, 2011. Rodriguez stated that thesedisclosures deprived him of control over his personalinformation and his ability to market that information for hisown financial gain.

In support of his breach of contract claim, Rodriguezasserted that he entered into a binding contract with SonyComputer for the purchase and rental of video games andmovies. According to Rodriguez, Sony Computer and SonyNetwork breached this contract that incorporated the Actsretention requirements, resulting in actual damages.

The district court again granted Sonys motion to dismiss. The district court observed that, despite the prior dismissal ofRodriguezs unlawful retention claim with prejudice,Rodriguezs claim has resurfaced in a variety of differentpackages. . . . The district court determined that Rodriguezcould not reshape his dismissed unlawful retention claim asa breach of contract claim because he failed to identify any


agreement memorializing the Acts requirements ascontractual obligations. The district court also held thatdismissal of Rodriguezs unlawful disclosure claim waswarranted because leave to amend was granted only as to anyunlawful disclosures made to the Doe defendants.

Rodriguez filed a timely notice of appeal.

II. STANDARDS OF REVIEW

We review de novo the district courts dismissal of[Rodriguezs] Amended Complaint under Federal Rule ofCivil Procedure 12(b)(6) and accept all factual allegations inthe Amended Complaint as true. Or. Pub. Emps. Ret. Fundv. Apollo Grp. Inc., 774 F.3d 598, 603 (9th Cir. 2014)(citation omitted).

We review the interpretation of a statute de novo. . . . United States v. JDT, 762 F.3d 984, 1000 (9th Cir. 2014)(citation omitted).

III. DISCUSSION

A. Private Right of Action For Unlawful Retention ofPersonal Information

Rodriguez maintains that the plain language of 18 U.S.C. 2710(c)(1) provides a private right of action because itpermits a civil action for violation of this section.

Although we have not previously addressed this issue, theSeventh Circuit has rejected the same argument. In Sterk I,the Seventh Circuit considered whether the plaintiff couldpursue an unlawful retention claim stemming from Redboxs


retention of personal information related to its rental services. See Sterk I, 672 F.3d at 536. The Seventh Circuit observedthat, because 2710 was not well drafted, application of itsstatutory language posed several challenges. Id. at 538. TheSeventh Circuit emphasized that [t]he biggest interpretiveproblem stems from failure to specify the scope of reliefafforded in 2710(c). Id. The Seventh Circuit resolved theinterpretive problem by reasoning that 2710(c) created aprivate right of action only for unlawful disclosure ofpersonal information and not for unlawful retention beyondthe destruction provisions in the Act. See id. The SeventhCircuit observed that:

If (c) appeared after all the prohibitions,which is to say after (d) and (e) as well as (b),the natural inference would be that anyviolator of any of the prohibitions could besued for damages. But instead (c) appearsafter just the first prohibition, the one insubsection (b), prohibiting disclosure. . . .

Id. The Seventh Circuit acknowledged that the languageplacement could have been an accident of legislative drafting,but agreed with the Sixth Circuit that the more plausibleinterpretation is that it is limited to enforcing the prohibitionof disclosure. . . . Id. (citing Daniel v. Cantrell, 375 F.3d377, 38485 (6th Cir. 2004)).

The Seventh Circuit further observed that awardingdamages or other forms of relief would be illogical forunlawful retention because no injury would occur absentdisclosure. As the Seventh Circuit articulated:


How could there be injury, unless theinformation, not having been destroyed, weredisclosed? If, though not timely destroyed, itremained secreted in the video serviceproviders files until it was destroyed, therewould be no injury. True, subsection(c)(2)(A) allows $2,500 in liquidateddamages, without need to prove actualdamages, but liquidated damages are intendedto be an estimate of actual damages, and iffailure of timely destruction results in noinjury at all because there is never anydisclosure, the only possible estimate of actualdamages for violating subsection (e) would bezero. . . .

Id. (internal quotation marks omitted).

Although Rodriguez contends that the Seventh Circuitsopinion was wrongly decided, the Seventh Circuits approachto statutory interpretation was sound. The Seventh Circuitastutely noted the limited guidance provided by the statutorylanguage. See id. The unlawful disclosure provisionprovides that [a] video tape service provider who knowinglydiscloses, to any person, personally identifiable informationconcerning any consumer of such provider shall be liable tothe aggrieved person for the relief provided in subsection(d). 18 U.S.C. 2710(b). As discussed, 2710(d) is a deadend for any damages remedy, as it merely precludes theintroduction of personal information as evidence in any trial,hearing, arbitration, or other proceeding and does nototherwise provide for relief. 18 U.S.C. 2710(d).


There are other notable distinctions between the unlawfuldisclosure and unlawful retention provisions. The unlawfuldisclosure provision explicitly provides for liability to theaggrieved person. 18 U.S.C. 2710(c). However, theunlawful retention provision does not specify that a videoservice provider is liable for the knowing retention ofpersonal information. That provision lacks any mens reasarticulation and does not specify any form of available reliefto an aggrieved party. See 18 U.S.C. 2710(e). Instead, theprovision simply delineates a statutory duty for the[d]estruction of old records by the video service provider,and does not otherwise provide for civil liability. Id.2

Generally, when the language of the statute is directedtoward the entity being regulated, rather than the partyseeking relief, we have not recognized a private right ofaction. See Logan v. U.S. Bank Natl Assn, 722 F.3d 1163,1171 (9th Cir. 2013) (articulating that [s]tatutes containinggeneral proscriptions of activities or focusing on the regulatedparty rather than the class of beneficiaries whose welfareCongress intended to further do not indicate an intent toprovide for private rights of action) (citations, alteration, andinternal quotation marks omitted). Faced with this draftingconundrum, the Seventh Circuit understandably consideredthe statutes structure in resolving the private right of actionissue.

2 The Seventh Circuits decision in Graczyk v. West Pub. Co., 660 F.3d275 (7th Cir. 2011), relied on by Rodriguez, does not compel a contraryconclusion. In Graczyk, the Seventh Circuit determined that the plaintiffpossessed standing to pursue a civil action for unlawful disclosures inviolation of the Drivers Privacy Protection Act, and that the statutecreated a federal right of action. See Graczyk, 660 F.3d at 278. Noretention claim was at issue.


Courts must interpret the statute as a whole, giving effectto each word and making every effort not to interpret aprovision in a manner that renders other provisions of thesame statute inconsistent, meaningless or superfluous. United States v. Neal, 776 F.3d 645, 652 (9th Cir. 2015)(citation, alterations, and internal quotation marks omitted). Additionally, particular phrases must be construed in lightof the overall purpose and structure of the whole statutoryscheme. Id. (citation, alteration, and internal quotationmarks omitted). Rather than focusing on the phrase in thissection, as urged by Rodriguez to support creating a right ofaction for all subsections, the Seventh Circuit employedaccepted principles of statutory construction to interpret animperfectly drafted statute.

The Seventh Circuits decision is consistent with therationale utilized by the Sixth Circuit, the only other court tohave addressed the Acts reach. In Daniel, the plaintiff suedvideo store owners for disclosing personal information relatedto his video rentals. See 375 F.3d at 37980. Affirmingsummary judgment in favor of the defendants, see id. at 379,the Sixth Circuit concluded that only the unlawful disclosureprovision includes language related to liability. Neithersection (d) nor section (e) contains such language. Id. at 384(citation omitted). The Sixth Circuit explained that:

the structure of the statute makes it clear thata civil action may be brought based on only aviolation of section (b). Immediately aftersection (b), section (c) discusses the rules forbringing a civil action. After section (c),sections (d) and (e) discuss receiving personalinformation into evidence and destruction ofold records. If these later sections were to be


a basis for liability, it would make sense thatthe section on civil actions would come at theend of the statute, rather than preceding thesesections.

Id. (footnote reference and internal quotation marks omitted).

Finally, the Acts legislative history does not evince anyCongressional intent to create a private right of action for avideo service providers retention of a consumers personalinformation beyond the statutorily proscribed timelimitations. When the Act was passed in 1988, its purposewas [t]o preserve personal privacy with respect to the rental,purchase or delivery of video tapes or similar audio visualmaterials. S. Rep. No. 100-599, at 1 (1988), reprinted in1988 U.S.C.C.A.N. 4342-1.3 It appears that Congressintended to fulfill its expressed purpose by providing a civilremedy for the unlawful disclosure of personal information,but not for unlawful retention of that information. The SenateReport confirms that the Act prohibits video stores fromdisclosing personally identifiable information informationthat links the customer or patron to particular materials orservices. In the event of an unauthorized disclosure, anindividual may bring a civil action for damages. Id. at 7(emphasis added). The Senate Report explains that [t]hecivil remedies section puts teeth into the legislation, ensuringthat the law will be enforced by individuals who suffer as theresult of unauthorized disclosures. . . . Id. at 8 (emphasisadded). Additionally, in summarizing the subsections, theSenate Report reiterates that Section 2710(c) imposesliability where an individual, in violation of the Act,

3 No House Report was submitted in support of the Act. See S. Rep. No.100-599, at 1 (1988).


knowingly discloses personally identifiable informationconcerning any consumer. . . . Id. at 14 (emphasis added).

No similar language of liability appears in the discussionof the retention subsection. With no mention of civil liability,the Report explains that the purpose of [the retention]provision is to reduce the chances that an individuals privacywill be invaded, by requiring the destruction of informationin an expeditious fashion, appropriate to the circumstancesand to the policies protected by this Act. Id. at 15. Thislegislative history persuades us that Congress did not intendto impose civil liability for violations of the retentionprovision.

Further indication of Congressional intent may begarnered from the 2013 amendment to 18 U.S.C. 2710,subsequent to the decisions of the Sixth and Seventh Circuitsdenying a private right of action for violation of the retentionprovisions of the Act. The amendment clarified that writtenconsent of the consumer for disclosures may be obtained viathe internet on an ongoing basis. See H.R. Rep. No. 112-312,at 1 (2011); see also 18 U.S.C. 2710(b)(2)(B) (2013). Notably, Congress did not amend 2710 to provide for aprivate right of action for retention of a consumers personalinformation in light of the Sixth and Seventh Circuitsdecisions. See 18 U.S.C. 2710(c) & (e) (2013).

Under the rules of statutory construction, we presumethat Congress acts with awareness of relevant judicialdecisions. United States v. Alvarez-Hernandez, 478 F.3d1060, 1065 (9th Cir. 2007) (citations and internal quotationmarks omitted). We also presume that when Congressamends a statute, it is knowledgeable about judicial decisionsinterpreting the prior legislation, and when judicial


interpretations have settled the meaning of an existingstatutory provision, repetition of the same language in a newstatute indicates, as a general matter, the intent to incorporateits judicial interpretations as well. Id. (citations and internalquotation marks omitted). Congress failure to amend18 U.S.C. 2710 provides further support for our conclusionof Congressional intent to limit any private right of action toclaims involving unlawful disclosure. See id.4

Rodriguez asserts that, even if Sterk I was properlydecided, the district court misapplied Sterk I as precludingany form of relief because the Seventh Circuits opinion waslimited to an award of damages. However, the SeventhCircuit specifically held:

It is true that subsection (c) authorizes otherrelief besides just damages, relief lessobviously inappropriate to a violation of (d). That is particularly true of equitable relief,authorized in subsection (c)(2)(D). But whenall that a plaintiff seeks is to enjoin anunlawful act, there is no need for express

4 Rodriguez relies on Cent. Bank of Denver, N.A. v. First Interstate Bankof Denver, N.A., 511 U.S. 164 (1994), for the proposition that we may notconsider Congress failure to amend 18 U.S.C. 2710 as Congressionalendorsement of the decisions of the Sixth and Seventh Circuits. In Cent.Bank of Denver, a case involving the interpretation of 10(b) of theSecurities Exchange Act of 1934, the Supreme Court observed that[w]hen Congress reenacts statutory language that has been given aconsistent judicial construction, we often adhere to that construction ininterpreting the reenacted statutory language. 511 U.S. at 166, 185(citations omitted). However, the Supreme Court did not apply that ruleof statutory construction because Congress has not reenacted thelanguage of 10(b) since 1934 . . . Id. at 185 (citation omitted).


statutory authorization; absent the clearestcommand to the contrary from Congress,federal courts retain their equitable power toissue injunctions in suits over which they havejurisdiction.

Sterk I, 672 F.3d at 539 (citations and internal quotationmarks omitted). As the Seventh Circuit observed, the Actsmere mention of equitable relief in a provision that isinapplicable to retention of a consumers personalinformation does not support Rodriguezs assertion of aprivate right of action. See id. In other words, the equitablerelief provided in subsection (c)(2)(D) does not provide anindependent basis for a private right of action because itmerely delineates relief that is traditionally within the courtsinherent authority. See Owner-Operator Indep. DriversAssn, Inc. v. Swift Transp. Co., Inc.(AZ), 632 F.3d 1111,1121 (9th Cir. 2011) (articulating that unless otherwiseprovided by statute, the court retains its full equitablepowers) (citations and internal quotation marks omitted). Thus, Rodriguezs action for injunctive relief fares no betterunder Sterk I.

After carefully examining the legislative history, structureand language of 18 U.S.C. 2710 as a whole, we agree withthe Sixth and Seventh Circuits, and conclude that the districtcourt properly dismissed Rodriguezs unlawful retentionclaim for lack of a private right of action.

B. Rodriguezs Unlawful Disclosure Claim

Rodriguez contends that the district court erred indismissing his unlawful disclosure claim pursuant to theordinary course of business exception provided in 18 U.S.C.


2710. Rodriguez specifically asserts that he sufficientlyalleged an unlawful disclosure claim premised on disclosureof his personal information between distinct corporate entitiesto which the exception was inapplicable, and that Sonystransfer of ownership between Sony Computer and SonyNetwork was a factual issue not resolvable at the motion todismiss stage.5

The district court properly dismissed Rodriguezsunlawful disclosure claim pursuant to the Acts exemption fordisclosures made incident to the ordinary course of businessof the video tape service provider[.] 18 U.S.C. 2710(b)(2)(E). The Act defines ordinary course ofbusiness as meaning debt collection activities, orderfulfillment, request processing, and the transfer ofownership. 18 U.S.C. 2710(a)(2). In the First AmendedComplaint that was subject to the district courts first order ofdismissal, Rodriguez expressly alleged that Sony Computershared, sold, and/or transferred his personal information toSony Network after Sony Network took over the[Playstation Network]. The plain language of the Act

5 Sony challenges Rodriguezs standing to pursue an unlawful disclosureclaim because he failed to allege an injury-in-fact. The Seventh Circuithas rejected a similar challenge to a plaintiffs standing under the Act. SeeSterk v. Redbox Automated Retail, LLC, 770 F.3d 618, 623 (7th Cir. 2014)(Sterk II). The Seventh Circuit observed that Redbox appears to confusethe separate issue of whether plaintiffs have suffered financial harm as aresult of the disclosure with Article IIIs injury-in-fact requirement forpurposes of constitutional standing to bring suit in the first place. Id.(footnote reference omitted). By alleging that Redbox disclosed theirpersonal information in violation of the [Act, the plaintiffs] have met theirburden of demonstrating that they suffered an injury in fact that successin this suit would redress. Id. We reach a similar conclusion as toRodriguezs standing. See id.


exempts the transfer of ownership alleged in the FirstAmended Complaint. See id.

Rodriguezs subsequent attempt to thwart the statutorylanguage by artfully pleading that Sony Network assumed themanagement of the PlayStation Network as opposed toassuming ownership is unconvincing, especially consideringthat the more recent pleading completely contradicts theearlier pleading. See Saldana v. Occidental Petroleum Corp.,774 F.3d 544, 551 (9th Cir. 2014) (We . . . need not acceptas true legal conclusions contained in the complaint.)(citation omitted); see also United States v. CorinthiamColls., 655 F.3d 984, 995 (9th Cir. 2011) (explaining that anamended complaint should aver additional allegations thatare consistent with the challenged pleading and that do notcontradict the allegations in the original complaint) (citationand internal quotation marks omitted).6

We also agree with the Seventh Circuit that intra-corporate disclosures are not unauthorized disclosures underthe Act. In Sterk II, Redbox provided Stream Global Servicesa database containing the personal information of Redboxcustomers to enable Stream Global to service customers onbehalf of Redbox. See 770 F.3d at 62021. The SeventhCircuit concluded that Redboxs wholesale disclosure ofinformation pertaining to all customers did not contravenethe Act because the disclosures were intended to supportRedboxs services. Id. at 627. As the Seventh Circuitcogently observed, the Senate Report reflects Congress

6 We do not agree with Rodriguez that the determination of whether theexemption applies is a factual determination. See Miranda v. Anchondo,684 F.3d 844, 849 (9th Cir. 2012), as amended (The construction orinterpretation of a statute is a question of law . . .) (citation omitted).


awareness of the unremarkable fact that no business is anisland and that video tape services providers, like many otherbusinesses, may use third parties in their businessoperations. . . . Id. at 624 (quoting Senate Report No. 100-599 at 14). The functions performed by these third partiesfall within the definition of order fulfillment or requestprocessing. Id. (quoting S. Rep. No. 100-599 at 14). Thus,even if the district court accepted the contradictoryallegations of the Second Amended Complaint as true, theoutcome for Rodriguez would not change. The reason issimple if Sony Network assumed management of thePlaystation Network on behalf of Sony Computer, thatservice would fall comfortably within the order fulfillmentor request processing exemptions set forth in 2710(a)(2),(b)(2)(E). Either way, Rodriguez loses.

IV. CONCLUSION

The district court properly dismissed Rodriguezsunlawful retention claim. We join the Sixth and SeventhCircuits in holding that the Act does not provide a privateright of action for the retention of a consumers personalinformation beyond the time limitations established in18 U.S.C. 2710(e). The Acts legislative history and thelanguage and structure of 18 U.S.C. 2710 reflect thatCongress limited any civil remedies to the unlawfuldisclosure of a consumers personal information.

The district court also properly dismissed Rodriguezsunlawful disclosure claim. Rodriguez failed to sufficientlyallege that intra-corporate disclosures of consumers personal


information between Sony entities to sustain the operations ofthe PlayStation Network violated the Act.

AFFIRMED.

Date post:	10-Jan-2016
Category:	Documents
Upload:	mark-h-jaffe
View:	6 times
Download:	0 times

Rodriguez v. Sony Computer Ent. - VPPA.pdf

Documents