Zynga wins bids to compel arbitration, toss data breach case

(Reuters) - A California federal judge on Friday dealt a blow to plaintiffs suing mobile game developer Zynga Inc over a 2019 data breach, greenlighting a bid to compel arbitration of some users' claims and granting a motion to dismiss the rest.

The ruling in consolidated litigation before U.S. District Judge Yvonne Gonzalez Rogers in Oakland is a victory for San Francisco-based Zynga, which operates online games including Words With Friends and Draw Something.

Elizabeth Deeley of Latham & Watkins, an attorney for Zynga, didn't immediately respond to a request for comment. Nor did Adam Zapala of Cotchett, Pitre & McCarthy, who represents the plaintiffs.

Zynga originally moved to compel arbitration last year before the plaintiffs filed their consolidated lawsuit combining four cases. In January, the judge ordered the app users to hand over information in discovery associated with their accounts to help determine whether the claims belong in arbitration.

Plaintiffs filed a 27-count consolidated class action complaint in March, faulting Zynga for allegedly failing to protect customers' personal information in relation to a September 2019 breach of its customer database. Zynga renewed its motion to compel, asserting that the information it got through discovery led to records showing three plaintiffs accepted the company's 2019 terms of service. Zynga also moved to dismiss the action as to the remaining plaintiffs for lack of standing.

The judge on Friday found the three plaintiffs entered into an arbitration agreement when accepting the 2019 service terms. She also concluded the agreement "clearly and unmistakably delegated questions of arbitrability to the arbitrator," and the plaintiffs don't "raise a valid unconscionability challenge specifically directed at the delegation clause."

The judge granted the motion to dismiss the rest of the plaintiffs' claims with leave to amend. Citing the U.S. Supreme Court's recent decision in TransUnion LLC v. Ramirez, she found the complaint as currently pled doesn't satisfy a standing requirement to show a concrete injury-in-fact.

The case is I.C., et al v. Zynga Inc, U.S. District Court for the Northern District of California, No. 4:20-cv-01539.

For Zynga: Elizabeth Deeley of Latham & Watkins

For the plaintiffs: Adam Zapala of Cotchett, Pitre & McCarthy

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