Judge Pares Down Sony PlayStation Data Breach Class Action Again

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A class action lawsuit against Sony Corp. over a PlayStation Network data breach in 2011 was partially dismissed by a California federal judge last week, with the allegations regarding state consumer protection laws retained.

However, 43 of the 51 charges against Sony were dismissed by U.S. District Judge Anthony J. Battaglia on Jan. 21, including claims of negligence, negligent misrepresentation, breach of contract and unjust enrichment.

The Sony data breach class action lawsuit alleged violations of consumer protection laws in nine separate states, and Battaglia kept the claims in four of them: California, Florida, Michigan and New Hampshire.

The federal judge concluded that the plaintiffs had enough evidence to use against Sony that the company allegedly misrepresented or omitted information about the PlayStation’s network security.

In April 2011, Sony learned that hackers had managed to break through its computer network and stole customer information from the PlayStation Network and Qriocity database, which affected about 31 million users. The data that was breached included credit and debit card information.

A week after the incident occurred, Sony made an announcement to the public informing them of the PlayStation Network data breach and that there “may have been a financial impact on our loyal customers.”

The announcement kicked off a flurry of class action lawsuits from PlayStation Network members accusing Sony of violating its terms of service by failing to protect their personal information from being stolen. Enough lawsuits were filed against Sony that the Judicial Panel on Multidistrict Litigation combined a large share of them into a single MDL in August 2011.

Judge Battaglia dismantled the case in October 2012 by dismissing the majority of claims against Sony, but allowed the plaintiffs to refile and amend their claims. An amended complaint was filed against Sony in December 2012, and Sony responded with a motion to dismiss in February 2013.

The plaintiffs accuse Sony of not following “basic industry-standard protocols” necessary to make sure that its network was secure, and that the electronics company should have been aware that it had poor security in place.

The charges that were kept by the California federal judge were allegations that Sony violated California’s Unfair Competition Law, False Advertising Law and Consumer Legal Remedies Act — at least the parts that related to the claims of misrepresentation and omissions by Sony. Battaglia wrote that the plaintiffs made reasonable allegations regarding reasonable or adequate security measures that the electronics company should have had in place.

Similar arguments were used by Battaglia for why he kept the allegations concerning the consumer protection laws of Florida, Michigan and New Hampshire.

The California subclass was told by the federal judge that they were potentially owed restitution since Sony did profit from the money the company made from selling the PlayStation 3.

The plaintiffs are represented by Paul J. Geller of Robbins Geller Rudman & Dowd LLP, Adam J. Levitt of Wolf Haldenstein Adler Freeman & Herz LLC, Ben Barnow of Barnow & Associates PC, Brian R. Strange of Strange & Carpenter, David A. McKay of Herman Gerel LLP, Timothy G. Blood of Blood Hurst & O’Reardon LLP, and Gayle M. Blatt of Casey Gerry Schenk Francavilla Blatt & Penfield LLP.

The Sony PlayStation Network Data Breach Class Action Lawsuit is In re: Sony Gaming Networks and Customer Data Security Breach Litigation, Case No. 3:11-md-02258, in the U.S. District Court for the Southern District of California.

UPDATE: Sony has agreed to pay $15 million to settle the PlayStation Network data breach class action lawsuit, according to court documents filed July 13, 2014.

UPDATE 2: Instructions on how to file a claim for the PlayStation Network data breach class action settlement are now available! Click here