In re Sony Gaming Networks & Customer Data Sec. Breach Litig.

903 F.Supp.2d 942

In re SONY GAMING NETWORKS AND CUSTOMER DATA SECURITY BREACH LITIGATION.

MDL No. 11md2258 AJB (MDD).

Civil Case Nos. 11cv2119, 11cv2120.

United States District Court, S.D. California.

Oct. 11, 2012.

Ben Barnow, Barnow and Associates PC, Bradley M. Baglien, Christopher L. Dore, Jay Edelson, Edelson McGuire LLC, Michael J. Aschenbrener, Aschenbrener Law P.C., Joseph J. Siprut, Siprut PC, Chicago, IL, Brian Russell Strange, Strange & Carpenter, Lionel Z. Glancy, Marc L. Godino, Michael M Goldberg, Glancy, Binkow & Goldberg, LLP, Jon Anders Tostrud, Tostrud Law Group PC, Sandra Watson Cuneo, Cuneo Gilbert & Laduca, LLP, Justin B. Farar, Kaplan Fox and Kilsheimer LLP, Robert R. Ahdoot, Theodore Walter Maya, Tina Wolfson, Ahdoot & Wolfson APC, David E. Azar, Milberg LLP, Jeff S. Westerman, Westerman Law Corp., David E. Bower, Faruqi & Faruqi, LLP, Andrew Joseph Sokolowski, Raul Perez, Matthew T. Theriault, Initiative Legal Group APC, David Lishian Cheng, Miriam L. Schimmel, Rebecca Maria Labat, Capstone Law APC, Los Angeles, CA, Robert R. Henssler, Jr., Douglas R. Britton, Rachel L. Jensen, Robbins Geller Rudman & Dowd LLP, Timothy Gordon Blood, Thomas Joseph O'Reardon, II, Blood Hurst & O'Reardon LLP, John Miller Turner, III, Mark A. Maasch, Turner and Maasch, Gayle M. Blatt, Casey, Gerry, Schenk, Francavilla, Blatt & Penfield LLP, Mark Alan Milstein, Lincoln Gustafson and Cercos, Betsy Carol Manifold, Francis Michael Gregorek, Francis Michael Gregorek, Patrick Hugh Moran, Rachele R. Rickert, Wolf, Haldenstein, Adler, Freeman & Herz, LLP, William James Doyle, II, Doyle Lowther LLP, Daniel Roman Tamez, Gnau & Tamez Law Group, LLP, San Diego, CA, Lance A. Harke, Harke Clasby & Bushman LLP, Miami, FL, Seth R. Gassman, Labaton Sucharow LLP, Brian Philip Murray, Gregory Bradley Linkh, Murray Frank LLP, Joe R. Whatley, Jr., Whatley Drake & Kallas LLC, Patrick J. Sheehan, Whatley Kallas, LLC, Shujah Ahmad Awan, Shujah Awan, Lester L. Levy, Wolf Popper, Curtis V. Trinko, Jennifer Elizabeth Traystman, Law Offices of Curtis V. Trinko, Scott A. Bursor, Bursor & Fisher, PA, Bruce E. Gerstein, Garwin Gerstein & Fisher LLP, Scott W. Fisher, Garwin Bronzaft Gerstein & Fisher LLP, Ted Trief, Trief & Olk, New York, NY, James D. Hoey, III, The Hoey Law Firm, La Jolla, CA, Thomas Gourrier Bousquet, Bousquet Law, P.C., Muhammad Suleiman Aziz, Abraham Watkins Nichols Sorrels and Friend, Cory S. Fein, Cynthia B. Chapman, Michael A. Caddell, Caddell & Chapman, Houston, TX, Caleb L.H. Marker, Christopher Paul Ridout, Devon M. Lyon, Ridout & Lyon, LLP, Long Beach, CA, Gillian L. Wade, Sara Dawn Avila, Milstein Adelman LLP, Santa Monica, CA, Mark Schlachet, Law Offices of Mark Schlachet, Cleveland, OH, Paul C. Whalen, Paul C. Whalen, Esq., Manhasset, NY, Christopher D. Jennings, John G. Emerson, Jr., Scott E. Poynter, William T. Crowder, Emerson Poynter LLP, Little Rock, AR, David I. Pankin, Brooklyn, NY, Daniel E. Becnel, Jr., Jennifer L. Crose, Becnel Law Firm, LLC, Reserve, LA, Matthew B. Moreland, Matthew B. Moreland, Attorney at Law, Allan Kanner, Kanner & Whiteley, LLC, New Orleans, LA, Thomas D. Mauriello, Mauriello Law Firm APC, San Clemente, CA, Laurence D. King, Linda M. Fong, Kaplan, Fox & Kilsheimer, LLP, Jonas Palmer Mann, Joshua Caleb Ezrin, Kevin Lee Thomason, William M. Audet, Audet & Partners LLP, J. Kirk Boyd, Public Interest Lawyers Group, Michael F. Ram, Ram, Olson, Cereghino & Kopczynski LLP, Mark E. Burton, Jr., Hersh and Hersh, Shawn A. Williams, Robbins Geller Rudman & Dowd LLP, Jennie Lee Anderson, Andrus Anderson LLP, Stuart George Gross, Gross Law, Aaron Hillel Darsky, Schubert and Reed, Josef D. Cooper, Cooper & Kirkham, PC, Mark F. Anderson Anderson, Ogilvie & Brewer LLP, San Francisco, CA, Sean Patrick Reis, Edelson McGuire LLP, Rancho Santa Margarita, CA, Todd Goldberg, Goldfarb Branham LLP, Jeremy Reade Wilson, Wilson Trosclair & Lovins, Kenneth P. Trosclair, Nabil Majed Nachawati, II, Fears Nachawati Law Firm, Dallas, TX, Robert K. Shelquist, Lockridge Grindal Nauen P.L.L.P., Executive Committee Member, Daniel C. Hedlund, Gustafson Gluek PLLC, Minneapolis, MN, Curtis Brooks Cutter, John R. Parker, Jr., Stuart C. Talley, William Alter Kershaw, Kershaw, Cutter & Ratinoff, LLP, Sacramento, CA, Ira Perry Rothken, Jared Robinson Smith, Rothken Law Firm, Novato, CA, Lawrence Timothy Fisher, Sarah N. Westcot, Bursor & Fisher, PA, Walnut Creek, CA, Cullin Avram O'Brien, Mark Jeffrey Dearman, Paul J. Geller, Stuart A. Davidson, Robbins Geller Rudman & Dowd LLP, Boca Raton, FL, Mark S. Reich, Coughlin Stoia Geller Rudman & Robbins LLP, Samuel H. Rudman, Lerach Coughlin Stoia Geller Rudman and Robbins, Melville, NY, Brian W. Smith, Smith Vanture & Rivera LLP, West Palm Beach, FL, Gerald H. Clark, Clark Law Firm, West Long Branch, NJ, Brian Scott Cohen, Cohen Law Group, P.C., Greenwich, CT, Kenneth G. Gilman, Gilman and Pastor, LLP, Wareham, MA, Michele Monique Desoer, Wites & Kapetan P.A., Reginald Terrell, The Terrell Law Group, Oakland, CA, Richard Alan Proaps, Law Offices of Richard A. Proaps, Fair Oaks, CA, David Pastor, Pastor Law Office, LLP, Gary Klein, Shennan Kavanagh, Klein Kavanagh Costello, LLP, Boston, MA, Seth Michael Lehrman, Farmer, Jaffe, Weissing, Edwards, Fistos & Lehrman, P.L., Fort Lauderdale, FL, Mark A. Chavez, Nance Felice Becker, Chavez and Gertler LLP, Mill Valley, CA, Peter S. Pearlman, Cohn Lifland Pearlman Hermann & Knopf LLP, Saddle Brook, NJ, Donald Chidi Amamgbo, Esq., Amamgbo & Associates, Culver City, CA, David M. Honigman, Mantese Honigman Rossman & Williamson, PC, Troy, MI, Jeffrey A. Hank, East Lansing, MI, Nancy L. Fineman, Carr McClellan Ingersoll Thompson and Horn, Steven Noel Williams, Victor Santiago Elias, Cotchett, Pitre & McCarthy LLP, Burlingame, CA, Irwin Levin, Lynn A. Toops, Richard E. Shevitz, Cohen and Malad LLP, Richard P. Batesky, Batesky Law Office, Indianapolis, IN, Craig Frank Holthaus, John W. DeGravelles, DeGravelles, Palmintier, Holthaus & Fruge, Gerald J. Asay, Scott E. Frazier, Kracht & Frazier, LLP, Baton Rouge, LA, for Plaintiffs.

Amanda Catherine Fitzsimmons, William S. Boggs, DLA Piper LLP, San Diego, CA, David Alan Walton, Beirne Maynard et al., Houston, TX, Douglas H. Meal, Harvey J. Wolkoff, Robert B. Gordon, Mark P. Szpak, Ropes & Gray, LLP, Boston, MA, Karin Pagnanelli, Mitchell, Silberberg & Knupp LLP, Los Angeles, CA, Morris Weinberg, Jr., Zuckerman Spaeder,Tampa, FL, Rocky C. Tsai, Ropes & Gray LLP, Thad A. Davis, Gibson Dunn & Crutcher LLP, San Francisco, CA, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS PLAINTIFFS' CONSOLIDATED CLASS ACTION COMPLAINT

ANTHONY J. BATTAGLIA, District Judge.

Presently before the Court are (1) Defendants' Motion to Dismiss Plaintiffs' Consolidated Class Action Complaint; and (2) Defendants' Supplemental Request for Judicial Notice. [Doc. 94.] Plaintiffs filed an opposition, [Doc. No. 107], and Defendants filed a reply, [Doc. No. 114]. The Court held a hearing on the motion on Thursday, September 27, 2012.¹ For the reasons set forth below, the Court (1) GRANTS in part and DENIES in part Defendants' motion to dismiss Plaintiffs' Consolidated Class Action Complaint; and (2) GRANTS in part and DENIES in part Defendants' Supplemental Request for Judicial Notice.

BACKGROUND

I. Factual Background

This action arises out of a criminal intrusion into the computer network system used to provide PlayStation Network (“PSN”) services. Plaintiffs, a putative consumer class, allege that Sony Computer Entertainment America, LLC (“SCEA”), Sony Network Entertainment International, LLC and Sony Network Entertainment America, Inc. (collectively, “SNE”), Sony Online Entertainment, LLC (“SOE”), and Sony Corporation of America (“SCA”) (collectively, “Sony” or “Defendants”) failed to follow basic industry-standard protocols to safeguard its customers personal and financial information, thereby creating foreseeable harm and injury to the Plaintiff class.

Sony develops and markets the PlayStation Portable (“PSP”) hand-held device and the PlayStation 3 (“PSP”) console (collectively, “consoles”).² [Compl. ¶¶ 24, 25.] Among their key features are their ability to let users play games, connect to the Internet, access the PlayStation Network (“PSN”), Qriocity, and Sony Online Entertainment (“SOE”) (collectively, “Sony Online Services” or “SOS”), [ Id. ¶¶ 26, 27–29]. For additional fees, the PSN also allows access to various third party services such as Netflix, MLB.TV, and NHL Gamecenter LIVE (“Third Party Services”). [ Id. ¶ 31.] These additional fees are paid to the source of the service rather than to Sony. Many who subscribe to these Third Party Services can only access them through their PSN account. [ Id. ¶¶ 9–11, 14, 38.] As of January 25, 2011, PSN had over 69 million users worldwide, [ Id ], and SOE had over 24.6 million users worldwide, [ Id. ¶ 29].

When establishing accounts with PSN, Qriocity, and SOE, Plaintiffs and other Class members were required to provide personally identifying information to Sony, including their names, mailing addresses, email addresses, birth dates, credit and debit card information (card numbers, expiration dates and security codes) and login credentials (“Personal Information”), which Sony stores and maintains on its Network. [ Id. at 35.] Sony continually monitors and records users' PSN activities, purchases and usage, and maintains this usage data on its Network.³ [ Id. ¶ 36.]

Plaintiffs allege that on April 16 or 17, 2011, hackers accessed Sony's Network, stealing the Personal Information of millions of Sony customers, including Plaintiffs and the other Class members (the “Data Breach”). [ Id. ¶ 46.] On April 17, 2011, Sony discovered that PSN and Qriocity user data had been stolen. [ Id. ¶ 51.] Three days later, Sony took the PSN and Qriocity offline, stating that “[w]e're aware certain functions of PlayStation Network are...