Oeste v. Zynga, Inc.

Background

The plaintiffs sued Zynga, Inc. after an alleged data breach affecting as many as 173 million user accounts. They asserted eleven claims on behalf of themselves and a proposed nationwide class of people whose personal identifying information was disclosed in the breach. The complaint alleged that Zynga failed to adequately protect users’ information and failed to notify users directly about the breach.

Zynga moved under 28 U.S.C. § 1404(a) to transfer the case to the U.S. District Court for the Northern District of California, or alternatively to dismiss for lack of personal jurisdiction and improper venue. The plaintiffs did not dispute that they had agreed to Zynga’s Terms of Service. They also filed motions seeking reconsideration of Zynga’s counsel’s admission, striking of Zynga’s exhibits and arguments, and limited discovery about Zynga’s contacts with Maryland residents.

Transfer Analysis

Section 1404(a) permits a federal district court to transfer a civil action to another federal district where the case could have been brought when transfer would better serve the convenience of the parties and witnesses and the interests of justice.

The court interpreted Sections 15 and 17 of Zynga’s Terms of Service together. Section 15 required most claims to be resolved through binding arbitration, while certain exceptions could be brought in court. Section 17 required judicial proceedings falling within those exceptions to be brought in state or federal court in San Francisco, California, unless the parties agreed to another location. The court concluded that the plaintiffs’ decision to sue in court meant they were asserting claims within the exceptions, and therefore they were required to file in San Francisco.

The court also concluded that the transfer factors independently supported California. The plaintiffs conceded that the case could have been brought in the Northern District of California. Because the case was a proposed class action, the court gave the plaintiffs’ choice of forum little weight. Zynga’s computer systems and relevant documents were primarily in San Francisco, and most current and former employees with relevant knowledge worked at Zynga’s San Francisco office. The court also noted that three related nationwide class actions involving the same data breach, proposed class, and statutory claims were pending in the Northern District of California. The court found that transferring the case would promote judicial efficiency and consistent results.

Other Motions and Disposition

The court rejected the plaintiffs’ complaints about Zynga’s counsel and found no reason to revoke counsel’s permission to appear in the case or strike the affidavits submitted with the transfer motion. It therefore denied the Motion to Reconsider and the Motion to Strike.

The court denied the Motion for Limited Discovery as moot because it was transferring the case and therefore did not need to decide whether Maryland had personal jurisdiction over Zynga. The court granted Zynga’s Motion to Transfer Case and ordered that the matter be transferred to the Northern District of California. The opinion did not separately state a disposition of Zynga’s alternative request to dismiss for lack of personal jurisdiction or improper venue.