Rodriguez v. Sony Computer Entertainment America, LLC

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DANIEL RODRIGUEZ, individually No. 12-17391
and on behalf of all others similarly
situated, D.C. No.
Plaintiff-Appellant, 4:11-cv-04084-
PJH
v.
SONY COMPUTER ENTERTAINMENT OPINION
AMERICA, LLC, a Delaware limited
liability company; SONY NETWORK
ENTERTAINMENT INTERNATIONAL,
LLC, a Delaware limited liability
company,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of California
Phyllis J. Hamilton, Chief District Judge, Presiding
Argued and Submitted
February 6, 2015—San Francisco, California
Filed September 4, 2015
2 RODRIGUEZ V. SONY COMPUT. ENTM’T AM.
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 court’s dismissal of an
action under the Video Privacy Protection Act.
The plaintiff alleged that two Sony corporations violated
the Act by retaining his personally identifiable information
beyond the Act’s statutory limits and by disclosing his
personal information between Sony entities. Agreeing with
the Sixth and Seventh Circuits, the panel held that the Act
does not provide a private right of action to enforce its
retention requirements for video service providers. The panel
held that the alleged inter-corporate disclosures were exempt
from the Act’s 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 has
been prepared by court staff for the convenience of the reader.
RODRIGUEZ V. SONY COMPUT. ENTM’T AM. 3
COUNSEL
Roger Perlstadt (argued), Edelson PC, Chicago, Illinois; Sean
Reis, 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, Palo
Alto, California; Michelle Doolin, Cooley LLP, San Diego,
California, for Defendants-Appellees.
OPINION
RAWLINSON, Circuit Judge:
Appellant Daniel Rodriguez (Rodriguez) challenges the
district court’s dismissal of his second amended complaint
alleging that Appellees Sony Computer Entertainment
America LLC (Sony Computer) and Sony Network
Entertainment (Sony Network) International LLC
(collectively Sony) violated the Video Privacy Protection Act
(the Act) by retaining Rodriguez’s personally identifiable
information (personal information) beyond the Act’s statutory
limits, and disclosing his personal information between Sony
entities. Rodriguez contends that the district court erred in
concluding that the Act does not provide a private right of
action to enforce its retention requirements. Rodriguez also
takes issue with the district court’s conclusion that the intra-
corporate disclosures were exempt from the Act’s non-
disclosure requirements. We affirm the district court’s
rulings.
4 RODRIGUEZ V. SONY COMPUT. ENTM’T AM.
I. BACKGROUND
A. Statutory Background
The Act was promulgated in 1988 after the Washington
City Paper published Judge Robert Bork’s video rental
history during his failed Supreme Court confirmation
proceedings. 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 provider’s retention and
disclosure of a consumer’s personal information. See
18 U.S.C. § 2710(b). A video service provider “means any
person, engaged in the business, in or affecting interstate or
foreign commerce, of rental, sale, or delivery of prerecorded
video cassette tapes or similar audio visual materials, or any
person 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 video
tape service provider[.]” Id. at § 2710(a)(1). The Act defines
“personally identifiable information” as including
“information which identifies a person as having requested or
obtained specific video materials or services from a video
tape service provider[.]” Id. at § 2710(a)(3). With respect to
the retention of a consumer’s personal information, the Act
mandates that:
A person subject to this section shall destroy
personally identifiable information as soon as
practicable, but no later than one year from
the date the information is no longer
necessary for the purpose for which it was
collected and there are no pending requests or
orders for access to such information under
RODRIGUEZ V. SONY COMPUT. ENTM’T AM. 5
subsection (b)(2) or (c)(2) or pursuant to a
court order.
Id. at § 2710(e).
The Act also imposes liability for unlawful disclosure of
a consumer’s personal information:
(1) A video tape service provider who
knowingly discloses, to any person,
personally identifiable information concerning
any consumer of such provider shall be liable
to the aggrieved person for the relief provided
in subsection (d).1
1
The Act limits any relief to that provided in 18 U.S.C. § 2710(d). See
18 U.S.C. § 2710(b). In turn, 18 U.S.C. § 2710(d) provides:
Personally identifiable information obtained in any
manner other than as provided in this section shall not
be received in evidence in any trial, hearing, arbitration,
or other proceeding in or before any court, grand jury,
department, officer, agency, regulatory body, legislative
committee, or other authority of the United States, a
State, or a political subdivision of a State.
As the Seventh Circuit observed, it appears that § 2710(b) mistakenly
references § 2710(d) as a remedies provision. See Sterk v. Redbox
Automated 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 only
because the only ‘relief’ provided there is exclusion of the personally
identifiable information from evidence, but also because it is very unlikely
that a video tape service provider would ever be submitting, as evidence
in a legal proceeding, personally identifiable information that the provider
had disclosed”).
6 RODRIGUEZ V. SONY COMPUT. ENTM’T AM.
Id. at § 2710(b). The Act also provides that “[a]ny person
aggrieved by any act of a person in violation of this section
may bring a civil action in a United States district court.”
18 U.S.C. § 2710(c).
Relevant to the present appeal, video service providers are
exempt from liability for disclosure “if the disclosure is
incident to the ordinary course of business of the video tape
service provider[.]” 18 U.S.C. § 2710(b)(2)(E). The Act
defines “ordinary course of business” as “debt collection
activities, order fulfillment, request processing, and the
transfer of ownership[.]” Id. at § 2710(a)(2).
B. Rodriguez’s Claims Under the Act
There have been several permutations of Rodriguez’s
claims against various Sony entities premised on the
provisions of the Act. In his original class action complaint,
Rodriguez alleged that Sony Computer, as a video service
provider, violated the Act by maintaining and storing its
customers’ personal information rather than destroying the
information no later than one year after it was collected.
Rodriguez averred that, in 2008, he was a registered user of
Sony’s PlayStation Network, which provides online gaming
and video services streamed to a customer’s television.
Rodriguez rented and purchased several video games and
movies through the PlayStation Network in 2009, but did not
purchase or rent any movies after Sony modified its
streaming system in April, 2010. According to Rodriguez,
Sony continued to store his personal information relating to
the movies that he had rented and purchased in violation of
the Act’s time limits for the storage of such information.
Based on these allegations, Rodriguez sought statutory and
RODRIGUEZ V. SONY COMPUT. ENTM’T AM. 7
punitive damages, as well as injunctive relief and attorneys’
fees.
Sony sought dismissal of Rodriguez’s complaint on the
basis that Rodriguez lacked standing to pursue his claims
under the Act, and failed to properly allege any injury-in-fact.
Sony also maintained that Rodriguez consented to Sony’s
retention of his information pursuant to Sony’s terms of
service and privacy policy.
In response, Rodriguez filed a first amended class action
complaint adding Sony Network as a defendant, and ten John
Doe defendants. Rodriguez asserted that, subsequent to his
registration as a PlayStation Network customer, Sony
Network assumed control over the PlayStation Network and
its related services. Rodriguez alleged that Sony Computer
and Sony Network violated the Act when they impermissibly
shared Rodriguez’s personal information with each other
during the change in Sony’s operations.
Rodriguez also alleged that Sony Network’s utilization of
his personal information for “marketing purposes and
demographic studies” demonstrated that his personal
information had monetary value and that he never entered
into an agreement permitting use of his personal information
for these purposes. Rodriguez sought damages and injunctive
relief.
Sony filed a motion to dismiss Rodriguez’s first amended
complaint, which the district court granted. The district court
dismissed with prejudice Rodriguez’s claim premised on
retention of his personal information because the Act does not
provide a private right of action for retention of information.
The district court also dismissed with prejudice Rodriguez’s
8 RODRIGUEZ V. SONY COMPUT. ENTM’T AM.
unlawful disclosure claim because the Act permits disclosure
of personal information between related corporate entities
during the ordinary course of business. The district court
held that the disclosures by Sony Computer and Sony
Network were permitted because the disclosures occurred
during the transfer of operations. The district court also
concluded that Rodriguez failed to allege any unlawful
disclosures to the Doe defendants. The district court
dismissed Rodriguez’s unlawful disclosure claim with
prejudice 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 court’s
dismissal order, Rodriguez filed a second amended class
action complaint with significantly revamped claims.
Rodriguez alleged that, between 2009 and 2011, he rented
movies from Sony Computer, but had not rented or purchased
any movies since August 28, 2011. Rodriguez averred that,
although Sony Network assumed management over the
PlayStation Network in 2011, “the change in management did
not involve any transfer of ownership . . .” According to
Rodriguez, Sony Computer’s disclosure of his personal
information occurred prior to the change in management.
Rodriguez’s original claim based on violations of the Act
was restated as three claims premised on unlawful retention,
unlawful disclosure, and a newly minted breach of contract
claim. In support of his claim for unlawful retention,
Rodriguez alleged that Sony Computer and Sony Network
retained his personal information for an indefinite period of
time in violation of the Act and lacked policies for the timely
destruction of this information. Rodriguez asserted that he
was injured because the unlawful retention was a violation of
his privacy rights and he suffered economic damages
RODRIGUEZ V. SONY COMPUT. ENTM’T AM. 9
stemming from Sony’s unauthorized use of his personal
information. According to the Complaint, Rodriguez
incurred monetary damages because a portion of the purchase
price for each movie or video game “was intended to pay for
[Sony Computer’s] costs in timely destroying [customers’
personal information]. . . .” Rodriguez alleged that he
overpaid for his movie purchases because the purchase or
rental prices included costs associated with compliance with
the Act. Rodriguez also asserted that he was entitled to relief
pursuant to the Stored Communications Act for Sony’s
willful and intentional violations.
For his unlawful disclosure claim, Rodriguez alleged that
Sony Computer disclosed without consent Rodriguez’s
personal information to Sony Network prior to the transfer of
management in September, 2011. Rodriguez stated that these
disclosures deprived him of control over his personal
information and his ability to market that information for his
own financial gain.
In support of his breach of contract claim, Rodriguez
asserted that he entered into a binding contract with Sony
Computer for the purchase and rental of video games and
movies. According to Rodriguez, Sony Computer and Sony
Network breached this contract that incorporated the Act’s
retention requirements, resulting in actual damages.
The district court again granted Sony’s motion to dismiss.
The district court observed that, despite the prior dismissal of
Rodriguez’s unlawful retention claim with prejudice,
Rodriguez’s claim “has resurfaced in a variety of different
packages. . . .” The district court determined that Rodriguez
could not reshape his dismissed unlawful retention claim as
a breach of contract claim because he failed to identify any
10 RODRIGUEZ V. SONY COMPUT. ENTM’T AM.
agreement memorializing the Act’s requirements as
contractual obligations. The district court also held that
dismissal of Rodriguez’s unlawful disclosure claim was
warranted because leave to amend was granted only as to any
unlawful disclosures made to the Doe defendants.
Rodriguez filed a timely notice of appeal.
II. STANDARDS OF REVIEW
“We review de novo the district court’s dismissal of
[Rodriguez’s] Amended Complaint under Federal Rule of
Civil Procedure 12(b)(6) and accept all factual allegations in
the Amended Complaint as true.” Or. Pub. Emps. Ret. Fund
v. 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 of
Personal Information
Rodriguez maintains that the plain language of 18 U.S.C.
§ 2710(c)(1) provides a private right of action because it
permits a civil action for “violation of this section.”
Although we have not previously addressed this issue, the
Seventh Circuit has rejected the same argument. In Sterk I,
the Seventh Circuit considered whether the plaintiff could
pursue an unlawful retention claim stemming from Redbox’s
RODRIGUEZ V. SONY COMPUT. ENTM’T AM. 11
retention of personal information related to its rental services.
See Sterk I, 672 F.3d at 536. The Seventh Circuit observed
that, because § 2710 was “not well drafted,” application of its
statutory language posed several challenges. Id. at 538. The
Seventh Circuit emphasized that “[t]he biggest interpretive
problem” stems from failure to specify the scope of relief
afforded in § 2710(c). Id. The Seventh Circuit resolved the
interpretive problem by reasoning that § 2710(c) created a
private right of action only for unlawful disclosure of
personal information and not for unlawful retention beyond
the destruction provisions in the Act. See id. The Seventh
Circuit 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 any
violator of any of the prohibitions could be
sued for damages. But instead (c) appears
after just the first prohibition, the one in
subsection (b), prohibiting disclosure. . . .
Id. The Seventh Circuit acknowledged that the language
placement could have been an accident of legislative drafting,
but agreed with the Sixth Circuit that “the more plausible
interpretation is that it is limited to enforcing the prohibition
of disclosure. . . .” Id. (citing Daniel v. Cantrell, 375 F.3d
377, 384–85 (6th Cir. 2004)).
The Seventh Circuit further observed that awarding
damages or other forms of relief would be illogical for
unlawful retention because no injury would occur absent
disclosure. As the Seventh Circuit articulated:
12 RODRIGUEZ V. SONY COMPUT. ENTM’T AM.
How could there be injury, unless the
information, not having been destroyed, were
disclosed? If, though not timely destroyed, it
remained secreted in the video service
provider’s files until it was destroyed, there
would be no injury. True, subsection
(c)(2)(A) allows $2,500 in liquidated
damages, without need to prove actual
damages, but liquidated damages are intended
to be an estimate of actual damages, and if
failure of timely destruction results in no
injury at all because there is never any
disclosure, the only possible estimate of actual
damages for violating subsection (e) would be
zero. . . .
Id. (internal quotation marks omitted).
Although Rodriguez contends that the Seventh Circuit’s
opinion was wrongly decided, the Seventh Circuit’s approach
to statutory interpretation was sound. The Seventh Circuit
astutely noted the limited guidance provided by the statutory
language. See id. The unlawful disclosure provision
provides that “[a] video tape service provider who knowingly
discloses, to any person, personally identifiable information
concerning any consumer of such provider shall be liable to
the aggrieved person for the relief provided in subsection
(d).” 18 U.S.C. § 2710(b). As discussed, § 2710(d) is a dead
end for any damages remedy, as it merely precludes the
introduction of personal information as evidence “in any trial,
hearing, arbitration, or other proceeding” and does not
otherwise provide for relief. 18 U.S.C. § 2710(d).
RODRIGUEZ V. SONY COMPUT. ENTM’T AM. 13
There are other notable distinctions between the unlawful
disclosure and unlawful retention provisions. The unlawful
disclosure provision explicitly provides for liability “to the
aggrieved person.” 18 U.S.C. § 2710(c). However, the
unlawful retention provision does not specify that a video
service provider is liable for the knowing retention of
personal information. That provision lacks any mens reas
articulation and does not specify any form of available relief
to an aggrieved party. See 18 U.S.C. § 2710(e). Instead, the
provision 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 directed
toward the entity being regulated, rather than the party
seeking relief, we have not recognized a private right of
action. See Logan v. U.S. Bank Nat’l Ass’n, 722 F.3d 1163,
1171 (9th Cir. 2013) (articulating that “[s]tatutes containing
general proscriptions of activities or focusing on the regulated
party rather than the class of beneficiaries whose welfare
Congress intended to further do not indicate an intent to
provide for private rights of action”) (citations, alteration, and
internal quotation marks omitted). Faced with this drafting
conundrum, the Seventh Circuit understandably considered
the statute’s structure in resolving the private right of action
issue.
2
The Seventh Circuit’s decision in Graczyk v. West Pub. Co., 660 F.3d
275 (7th Cir. 2011), relied on by Rodriguez, does not compel a contrary
conclusion. In Graczyk, the Seventh Circuit determined that the plaintiff
possessed standing to pursue a civil action for unlawful disclosures in
violation of the Driver’s Privacy Protection Act, and that the statute
created a federal right of action. See Graczyk, 660 F.3d at 278. No
retention claim was at issue.
14 RODRIGUEZ V. SONY COMPUT. ENTM’T AM.
Courts “must interpret the statute as a whole, giving effect
to each word and making every effort not to interpret a
provision in a manner that renders other provisions of the
same 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 light
of the overall purpose and structure of the whole statutory
scheme.” Id. (citation, alteration, and internal quotation
marks omitted). Rather than focusing on the phrase “in this
section,” as urged by Rodriguez to support creating a right of
action for all subsections, the Seventh Circuit employed
accepted principles of statutory construction to interpret an
imperfectly drafted statute.
The Seventh Circuit’s decision is consistent with the
rationale utilized by the Sixth Circuit, the only other court to
have addressed the Act’s reach. In Daniel, the plaintiff sued
video store owners for disclosing personal information related
to his video rentals. See 375 F.3d at 379–80. Affirming
summary judgment in favor of the defendants, see id. at 379,
the Sixth Circuit concluded that only the unlawful disclosure
provision “includes language related to liability. Neither
section (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 that
a civil action may be brought based on only a
violation of section (b). Immediately after
section (b), section (c) discusses the rules for
bringing a civil action. After section (c),
sections (d) and (e) discuss receiving personal
information into evidence and destruction of
old records. If these later sections were to be
RODRIGUEZ V. SONY COMPUT. ENTM’T AM. 15
a basis for liability, it would make sense that
the section on civil actions would come at the
end of the statute, rather than preceding these
sections.
Id. (footnote reference and internal quotation marks omitted).
Finally, the Act’s legislative history does not evince any
Congressional intent to create a private right of action for a
video service provider’s retention of a consumer’s personal
information beyond the statutorily proscribed time
limitations. When the Act was passed in 1988, its purpose
was “[t]o preserve personal privacy with respect to the rental,
purchase or delivery of video tapes or similar audio visual
materials.” S. Rep. No. 100-599, at 1 (1988), reprinted in
1988 U.S.C.C.A.N. 4342-1.3 It appears that Congress
intended to fulfill its expressed purpose by providing a civil
remedy for the unlawful disclosure of personal information,
but not for unlawful retention of that information. The Senate
Report confirms that the Act “prohibits video stores from
disclosing personally identifiable information – information
that links the customer or patron to particular materials or
services. In the event of an unauthorized disclosure, an
individual may bring a civil action for damages.” Id. at 7
(emphasis added). The Senate Report explains that “[t]he
civil remedies section puts teeth into the legislation, ensuring
that the law will be enforced by individuals who suffer as the
result of unauthorized disclosures. . . .” Id. at 8 (emphasis
added). Additionally, in summarizing the subsections, the
Senate Report reiterates that “Section 2710(c) imposes
liability 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).
16 RODRIGUEZ V. SONY COMPUT. ENTM’T AM.
knowingly discloses personally identifiable information
concerning any consumer. . . .” Id. at 14 (emphasis added).
No similar language of liability appears in the discussion
of 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 individual’s privacy
will be invaded, by requiring the destruction of information
in an expeditious fashion, appropriate to the circumstances
and to the policies protected by this Act.” Id. at 15. This
legislative history persuades us that Congress did not intend
to impose civil liability for violations of the retention
provision.
Further indication of Congressional intent may be
garnered from the 2013 amendment to 18 U.S.C. § 2710,
subsequent to the decisions of the Sixth and Seventh Circuits
denying a private right of action for violation of the retention
provisions of the Act. The amendment clarified that written
consent of the consumer for disclosures may be obtained via
the 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 a
private right of action for retention of a consumer’s personal
information in light of the Sixth and Seventh Circuit’s
decisions. See 18 U.S.C. § 2710(c) & (e) (2013).
“Under the rules of statutory construction, we presume
that Congress acts with awareness of relevant judicial
decisions.” United States v. Alvarez-Hernandez, 478 F.3d
1060, 1065 (9th Cir. 2007) (citations and internal quotation
marks omitted). “We also presume that when Congress
amends a statute, it is knowledgeable about judicial decisions
interpreting the prior legislation, and when judicial
RODRIGUEZ V. SONY COMPUT. ENTM’T AM. 17
interpretations have settled the meaning of an existing
statutory provision, repetition of the same language in a new
statute indicates, as a general matter, the intent to incorporate
its judicial interpretations as well.” Id. (citations and internal
quotation marks omitted). Congress’ failure to amend
18 U.S.C. § 2710 provides further support for our conclusion
of Congressional intent to limit any private right of action to
claims involving unlawful disclosure. See id.4
Rodriguez asserts that, even if Sterk I was properly
decided, the district court misapplied Sterk I as precluding
any form of relief because the Seventh Circuit’s opinion was
limited to an award of damages. However, the Seventh
Circuit specifically held:
It is true that subsection (c) authorizes other
relief besides just damages, relief less
obviously inappropriate to a violation of (d).
That is particularly true of equitable relief,
authorized in subsection (c)(2)(D). But when
all that a plaintiff seeks is to enjoin an
unlawful act, there is no need for express
4
Rodriguez relies on Cent. Bank of Denver, N.A. v. First Interstate Bank
of Denver, N.A., 511 U.S. 164 (1994), for the proposition that we may not
consider Congress’ failure to amend 18 U.S.C. § 2710 as Congressional
endorsement of the decisions of the Sixth and Seventh Circuits. In Cent.
Bank of Denver, a case involving the interpretation of § 10(b) of the
Securities Exchange Act of 1934, the Supreme Court observed that
“[w]hen Congress reenacts statutory language that has been given a
consistent judicial construction, we often adhere to that construction in
interpreting the reenacted statutory language.” 511 U.S. at 166, 185
(citations omitted). However, the Supreme Court did not apply that rule
of statutory construction because “Congress has not reenacted the
language of § 10(b) since 1934 . . .” Id. at 185 (citation omitted).
18 RODRIGUEZ V. SONY COMPUT. ENTM’T AM.
statutory authorization; absent the clearest
command to the contrary from Congress,
federal courts retain their equitable power to
issue injunctions in suits over which they have
jurisdiction.
Sterk I, 672 F.3d at 539 (citations and internal quotation
marks omitted). As the Seventh Circuit observed, the Act’s
mere mention of equitable relief in a provision that is
inapplicable to retention of a consumer’s personal
information does not support Rodriguez’s assertion of a
private right of action. See id. In other words, the equitable
relief provided in subsection (c)(2)(D) does not provide an
independent basis for a private right of action because it
merely delineates relief that is traditionally within the court’s
inherent authority. See Owner-Operator Indep. Drivers
Ass’n, Inc. v. Swift Transp. Co., Inc.(AZ), 632 F.3d 1111,
1121 (9th Cir. 2011) (articulating that “unless otherwise
provided by statute, the court retains its full equitable
powers”) (citations and internal quotation marks omitted).
Thus, Rodriguez’s action for injunctive relief fares no better
under Sterk I.
After carefully examining the legislative history, structure
and language of 18 U.S.C. § 2710 as a whole, we agree with
the Sixth and Seventh Circuits, and conclude that the district
court properly dismissed Rodriguez’s unlawful retention
claim for lack of a private right of action.
B. Rodriguez’s Unlawful Disclosure Claim
Rodriguez contends that the district court erred in
dismissing his unlawful disclosure claim pursuant to the
ordinary course of business exception provided in 18 U.S.C.
RODRIGUEZ V. SONY COMPUT. ENTM’T AM. 19
§ 2710. Rodriguez specifically asserts that he sufficiently
alleged an unlawful disclosure claim premised on disclosure
of his personal information between distinct corporate entities
to which the exception was inapplicable, and that Sony’s
transfer of ownership between Sony Computer and Sony
Network was a factual issue not resolvable at the motion to
dismiss stage.5
The district court properly dismissed Rodriguez’s
unlawful disclosure claim pursuant to the Act’s exemption for
disclosures made “incident to the ordinary course of business
of the video tape service provider[.]” 18 U.S.C.
§ 2710(b)(2)(E). The Act defines “ordinary course of
business” as meaning “debt collection activities, order
fulfillment, request processing, and the transfer of
ownership.” 18 U.S.C. § 2710(a)(2). In the First Amended
Complaint that was subject to the district court’s first order of
dismissal, Rodriguez expressly alleged that Sony Computer
“shared, sold, and/or transferred” his personal information to
Sony Network after Sony Network “took over the
[Playstation Network].” The plain language of the Act
5
Sony challenges Rodriguez’s standing to pursue an unlawful disclosure
claim because he failed to allege an injury-in-fact. The Seventh Circuit
has rejected a similar challenge to a plaintiff’s standing under the Act. See
Sterk v. Redbox Automated Retail, LLC, 770 F.3d 618, 623 (7th Cir. 2014)
(Sterk II). The Seventh Circuit observed that “Redbox appears to confuse
the separate issue of whether plaintiffs have suffered financial harm as a
result of the disclosure with Article III’s injury-in-fact requirement for
purposes of constitutional standing to bring suit in the first place.” Id.
(footnote reference omitted). “By alleging that Redbox disclosed their
personal information in violation of the [Act, the plaintiffs] have met their
burden of demonstrating that they suffered an injury in fact that success
in this suit would redress.” Id. We reach a similar conclusion as to
Rodriguez’s standing. See id.
20 RODRIGUEZ V. SONY COMPUT. ENTM’T AM.
exempts the transfer of ownership alleged in the First
Amended Complaint. See id.
Rodriguez’s subsequent attempt to thwart the statutory
language by artfully pleading that Sony Network assumed the
management of the PlayStation Network as opposed to
assuming ownership is unconvincing, especially considering
that the more recent pleading completely contradicts the
earlier pleading. See Saldana v. Occidental Petroleum Corp.,
774 F.3d 544, 551 (9th Cir. 2014) (“We . . . need not accept
as true legal conclusions contained in the complaint.”)
(citation omitted); see also United States v. Corinthiam
Colls., 655 F.3d 984, 995 (9th Cir. 2011) (explaining that an
amended complaint should aver “additional allegations that
are consistent with the challenged pleading and that do not
contradict the allegations in the original complaint”) (citation
and internal quotation marks omitted).6
We also agree with the Seventh Circuit that intra-
corporate disclosures are not unauthorized disclosures under
the Act. In Sterk II, Redbox provided Stream Global Services
a database containing the personal information of Redbox
customers to enable Stream Global to service customers on
behalf of Redbox. See 770 F.3d at 620–21. The Seventh
Circuit concluded that Redbox’s “wholesale disclosure of
information pertaining to all customers” did not contravene
the Act because the disclosures were intended to support
Redbox’s services. Id. at 627. As the Seventh Circuit
cogently observed, the Senate Report reflects Congress’
6
We do not agree with Rodriguez that the determination of whether the
exemption applies is a factual determination. See Miranda v. Anchondo,
684 F.3d 844, 849 (9th Cir. 2012), as amended (“The construction or
interpretation of a statute is a question of law . . .”) (citation omitted).
RODRIGUEZ V. SONY COMPUT. ENTM’T AM. 21
awareness of the unremarkable fact that no business is an
island and that video tape services providers, like many other
businesses, “may use third parties in their business
operations. . . .” Id. at 624 (quoting Senate Report No. 100-
599 at 14). The functions performed by these third parties
fall within the definition of “order fulfillment” or “request
processing.” Id. (quoting S. Rep. No. 100-599 at 14). Thus,
even if the district court accepted the contradictory
allegations of the Second Amended Complaint as true, the
outcome for Rodriguez would not change. The reason is
simple – if Sony Network assumed management of the
Playstation Network on behalf of Sony Computer, that
service would fall comfortably within the “order fulfillment”
or “request processing” exemptions set forth in § 2710(a)(2),
(b)(2)(E). Either way, Rodriguez loses.
IV. CONCLUSION
The district court properly dismissed Rodriguez’s
unlawful retention claim. We join the Sixth and Seventh
Circuits in holding that the Act does not provide a private
right of action for the retention of a consumer’s personal
information beyond the time limitations established in
18 U.S.C. § 2710(e). The Act’s legislative history and the
language and structure of 18 U.S.C. § 2710 reflect that
Congress limited any civil remedies to the unlawful
disclosure of a consumer’s personal information.
The district court also properly dismissed Rodriguez’s
unlawful disclosure claim. Rodriguez failed to sufficiently
allege that intra-corporate disclosures of consumers’ personal
22 RODRIGUEZ V. SONY COMPUT. ENTM’T AM.
information between Sony entities to sustain the operations of
the PlayStation Network violated the Act.
AFFIRMED.