Arnstein et al v. Sundance Holdings Group, L.L.C.

Filing 37

Corrected MEMORANDUM DECISION AND ORDER - Sundance's 23 Motion to Dismiss is DENIED. Signed by Judge Robert J. Shelby on 11/25/2024. (mh)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
MEMORANDUM DECISION AND
ORDER

SHANNON ARNSTEIN, et al.,
Plaintiffs,

Case No. 2:24-cv-00344-RJS-DAO

v.

Chief District Judge Robert J. Shelby

SUNDANCE HOLDINGS GROUP, LLC,

Magistrate Judge Daphne A. Oberg

Defendant.

Before the court is Defendant Sundance Holdings Group, LLC’s (Sundance’s) Motion to
Dismiss. 1 Having reviewed the Motion and associated briefing, the court DENIES Sundance’s
Motion.
BACKGROUND
The following factual summary is taken from Plaintiffs’ First Amended Class Action
Complaint (Complaint). 2 When considering a motion to dismiss pursuant to Rules 12(b)(1) and
12(b)(6), the court accepts the well-pleaded allegations contained in the Complaint as true and
construes them in the light most favorable to the Plaintiffs. 3
Sundance is a specialty retailer that sells a variety of clothing and other household
products to consumers. 4 Since January 1, 2004, Sundance has advertised its products via

Dkt. 23, Defendant’s Motion to Dismiss First Amended Complaint [Doc 12] and Memorandum in Support
(Motion).

1

2

Dkt. 12, First Amended Class Action Complaint (Complaint).

Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009) (citation omitted); Garling v. EPA, 849 F.3d 1289,
1293 n.3 (10th Cir. 2017) (“[W]hen a defendant asserts that the . . . complaint fails to allege sufficient facts to
support subject matter jurisdiction, the trial court must apply a standard patterned on Rule 12(b)(6) and assume the
truthfulness of the facts alleged.”).

3

4

Complaint ¶ 64.

1

physical catalogs and a website. 5 As part of its business operations, Sundance maintains a vast
digital database comprised of its customers’ names, home addresses, and purchase histories
(collectively, Private Purchase Information). 6 To supplement its revenues, Sundance shares this
Private Purchase Information with data aggregators who then supplement the information with
additional private information about each Sundance customer, including the customer’s gender,
age, religion, and ethnicity. 7 This enhanced customer list adds value to Sundance’s original list.
Ultimately, Sundance rents, sells, and discloses both the Private Purchase Information and the
enhanced list to third parties, including data aggregators, data cooperatives, list brokers,
aggressive advertisers, direct-marketing companies, political organizations, non-profit
companies, and others. 8
Between 2004 and 2024, each named Plaintiff purchased products from Sundance by
placing orders on Sundance’s website. 9 Sundance completed the sales by shipping the products
to each Plaintiff from a location within Utah. 10 Sundance failed to notify Plaintiffs that it would
disclose Plaintiffs’ Private Purchase Information, and Plaintiffs never authorized Sundance to do
so. 11 At times, Sundance shared Plaintiffs’ Private Purchase Information with various third
parties for compensation. 12

5

Id. ¶ 101.

6

Id. ¶¶ 5, 95.

7

Id. ¶ 96.

8

Id. ¶¶ 1, 98.

9

Id. ¶¶ 9, 14, 19, 24, 29, 34, 39, 44, 49, 54, 59.

10

Id. ¶¶ 11, 16, 21, 26, 31, 36, 41, 46, 51, 56, 61.

11

Id. ¶¶ 10, 15, 20, 25, 30, 35, 40, 45, 50, 55, 60.

12

Id. ¶ 116.

2

Plaintiffs initiated this proposed class action in May 2024, alleging Sundance violated
Utah’s Notice of Intent to Sell Nonpublic Personal Information Act (NISNPIA). 13 In July 2024,
Sundance filed the present Motion to Dismiss pursuant to Federal Rules of Civil Procedure
12(b)(1) and 12(b)(6). 14 The Motion is now ripe for review. 15
LEGAL STANDARDS
To survive a motion to dismiss under Rule 12(b)(6), a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief that is plausible on its face. 16 A claim is
facially plausible “when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” 17 “Threadbare
recitals of the elements of a cause of action, supported by mere conclusory statements, do not
suffice.” 18 The court’s function on a Rule 12(b)(6) motion is not to weigh potential evidence
that the parties might present at trial, but to assess whether the plaintiff’s complaint alone is
legally sufficient to state a claim for which relief may be granted. 19
Rule 12(b)(1) motions to dismiss for lack of subject-matter jurisdiction take two forms:
facial attacks and factual attacks. 20 A facial attack challenges the sufficiency of the complaint,
while a factual attack presents additional evidence. 21 Here, Sundance makes a facial attack. In

13

Dkt. 1, Class Action Complaint.

14

Motion at 1.

See Dkt. 29, Plaintiffs’ Response in Opposition to Defendant’s Motion to Dismiss the First Amended Class Action
Complaint (Opposition); Dkt. 31, Defendant’s Reply in Support of Its Motion to Dismiss First Amended Complaint
[Doc 12] (Reply).
15

16

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

17

Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556).

18

Iqbal, 556 U.S. at 678.

19

Miller v. Glanz, 948 F.2d 1562, 1565 (10th Cir. 1991).

20

Laufer v. Looper, 22 F.4th 871, 875 (10th Cir. 2022).

21

Muscogee (Creek) Nation v. Okla. Tax. Comm’n, 611 F.3d 1222, 1227 n.1 (10th Cir. 2010).

3

evaluating a facial attack, the court “must accept the factual allegations in the complaint as
true,” 22 and “apply a standard patterned on Rule 12(b)(6).” 23
ANALYSIS
Plaintiffs allege Sundance violated NISNPIA by sharing their Private Purchase
Information with third parties without providing Plaintiffs with notice. 24 Plaintiffs also insist this
court has subject matter jurisdiction pursuant to the Class Action Fairness Act (CAFA) because
there are more than 100 class members, the matter in controversy exceeds the sum or value of
$5,000,000, and minimum diversity among the parties exists. 25 In the present Motion, Sundance
argues the Complaint should be dismissed for two reasons. First, the class action bar found in
NISNPIA deprives this court of subject matter jurisdiction over Plaintiffs’ claims because,
“[w]ithout a viable class action, Plaintiffs cannot meet the amount-in-controversy requirement to
establish diversity jurisdiction under 28 U.S.C. § 1332(d).” 26 Second, Sundance argues
Plaintiffs fail to state a claim under NISNPIA because Plaintiffs do not sufficiently allege,
beyond conclusory assertions, that Sundance sold their personal data. 27 The court disagrees with
Sundance. The court finds Rule 23 of the Federal Rules of Civil Procedure governs the issue of
whether Plaintiffs may proceed as a class and ultimately establish diversity jurisdiction. The
court also finds Plaintiffs adequately pleaded a claim for relief under NISNPIA pursuant to Rule
12(b)(6). Each of Sundance’s arguments will be discussed in turn.

22

Safe Streets All. v. Hickenlooper, 859 F.3d 865, 878 (10th Cir. 2017).

23

Garling v. EPA, 849 F.3d 1289, 1293 n.3 (10th Cir. 2017).

24

Complaint ¶ 1.

25

Id. ¶ 65; 28 U.S.C. §§ 1332(d)(2), (5).

26

Motion at 5.

27

Id.

4

I.

NISNPIA’s Class Action Bar Does Not Deprive the Court of Subject Matter
Jurisdiction.

Plaintiffs seek to represent a class of persons who had their Private Purchase Information
obtained and unlawfully disclosed by Sundance in violation of NISNPIA. 28 In its most basic
sense, NISNPIA prohibits a commercial entity from disclosing nonpublic personal information
obtained as a result of a consumer transaction without providing written or oral notice to the
consumer. 29 NISNPIA provides consumers with a private cause of action and imposes liability
of $500 “for each time the commercial entity fails to provide the [required] notice . . . .” 30
However, § 203(3) of NISNPIA prohibits class actions. 31 At issue here is whether Plaintiffs may
avail themselves of the class action mechanism under Federal Rule 23 and establish diversity
jurisdiction under CAFA when Utah Code § 13-37-203(3) precludes class actions altogether.
The Supreme Court’s decision in Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance
Company resolves the contest in favor of Rule 23’s applicability to the present dispute. 32
In Shady Grove, the Court addressed a conflict between Rule 23 and a New York statute
that prohibited class action lawsuits seeking recovery for statutory penalties, including statutory
interest. 33 Five justices held Rule 23, which allows class action recovery of statutory penalties,
controlled. 34 The decision was fragmented: Justice Scalia wrote for the plurality, Justice Stevens
joined in the holding but concurred separately, and four justices dissented. 35 In light of this split,

28

Utah Code § 13-37 et seq.

29

See id.

30

Id. § 13-37-203(1)–(2).

31

Id. § 13-37-203(3) (“A person may not bring a class action under this chapter.”).

32

559 U.S. 393 (2010).

33

Id. at 397 (plurality opinion).

34

See id. at 436 (Stevens, J., concurring).

35

Id. at 396 (plurality opinion).

5

the Tenth Circuit instructs that Justice Stevens’s concurrence is controlling. 36 Because Justice
Stevens joined in Sections I and II–A of the plurality opinion, those parts of the plurality opinion
also control. 37
As explained in Shady Grove, federal courts sitting in diversity generally apply state
substantive law and federal procedural law. 38 But “[w]hen both a federal rule and a state law
appear to govern a question before a federal court sitting in diversity,” a familiar two-step
framework applies for federal courts to “negotiate this thorny area” and determine which law
controls. 39 The first step requires courts to determine whether the federal rule directly conflicts
with the state law. 40 If there is no conflict, the court engages in the traditional Rules of Decision
Act inquiry under Erie Railroad Company v. Tompkins 41 and its progeny. 42 If there is a conflict,
the court proceeds to the second step and must apply the federal rule as long as it represents a
valid exercise of Congress’s rulemaking authority under the Rules Enabling Act by not
abridging, enlarging, or modifying any substantive right. 43 These two steps will be referred to as

James River Ins. Co. v. Rapid Funding, LLC, 658 F.3d 1207, 1217 (10th Cir. 2011) (“[T]he Tenth Circuit has
understood [Justice Stevens's] concurrence to be the controlling opinion in Shady Grove.”); Racher v. Westlake
Nursing Home Ltd. P'ship, 871 F.3d 1152, 1162 (10th Cir. 2017) (“When faced with a choice between a state law
and an allegedly conflicting federal rule, we follow the framework described by the Supreme Court in Shady Grove,
as laid out by Justice Stevens in his concurring opinion.”).
36

See Shady Grove, 559 U.S. at 411 (plurality opinion) (explaining how the concurrence “departs from us only with
respect to the second part of the test, i.e., whether application of the Federal Rule violates [the Enabling Act]”);
Roberts v. C.R. England, Inc., 321 F. Supp. 3d 1251, 1254 (D. Utah 2018) (citing Lisk v. Lumber One Wood
Preserving, LLC, 792 F.3d 1331, 1335 (11th Cir. 2015)); Curry v. Mrs. Fields Gifts, Inc., No. 2:22-cv-00651-JNPDBP, 2023 WL 6318108, at *3 (D. Utah Sept. 28, 2023); Abbas v. Foreign Pol’y Grp., LLC, 783 F.3d 1328, 1333
n.1 (D.C. Cir. 2015).

37

38

559 U.S. at 417 (Stevens, J., concurring) (citing Hanna v. Plumer, 380 U.S. 460, 465 (1965)).

39

Id. at 421.

40
See Stender v. Archstone-Smith Operating Tr., 958 F.3d 938, 943 (10th Cir. 2020) (citing Shady Grove, 559 U.S.
at 399).
41

304 U.S. 64 (1938).

42

Shady Grove, 559 U.S. at 421 (Stevens, J., concurring).

43

Id. (citing 28 U.S.C. § 2072(b)).

6

Step One and Step Two respectively. An analysis of each step requires this court to apply Rule
23 to the present dispute.
A. Rule 23 and § 203(3) Are in Direct Conflict under Step One.
Because Justice Stevens joined the plurality’s analysis of Step One in Shady Grove, the
plurality opinion and Justice Stevens’s concurrence guide this part of the analysis. 44 A state law
and federal rule are in conflict when the federal rule “answers the question in dispute,” 45 leaves
“‘no room for the operation’ of seemingly conflicting state law,” or is in “direct collision” with
the state law. 46 The “question in dispute” in this case is identical to the question presented in
Shady Grove: “whether [Plaintiffs’] suit may proceed as a class action.” 47
Critically, the plurality opinion in Shady Grove interpreted Rule 23 as creating “a
categorical rule entitling a plaintiff whose suit meets the specified criteria to pursue his claim as
a class action.” 48 The Court also clarified how Rule 23’s use of the word “may” in the phrase
“[a] class action may be maintained” affords discretion to maintain a class action to the plaintiff,
not the court. 49 Thus, a federal district court is required to entertain a class action once a
plaintiff makes the required showings under 23(b), 50 and state statutes that impose heightened
class action requirements or limit the claims eligible for class action adjudication necessarily

Id. at 411 (plurality opinion) (explaining how the concurrence “departs from us only with respect to the second
part of the test, i.e., whether application of the Federal Rule violates [the Enabling Act]”); see also Roberts, 321 F.
Supp. 3d at 1254 (“Because Justice Stevens joined in Sections I and II-A of the plurality opinion, those parts also
control.”); Curry, 2023 WL 6318108, at *3 (explaining how Justice Stevens joined the plurality’s holding with
respect to Step 1).
44

45

Id. at 398 (citation omitted).

46

Id. at 421–22 (Stevens, J., concurring) (citations omitted).

47

Id. at 398 (plurality opinion).

48

Id.

49

Id. at 400 (citing Fed. R. Civ. P. 23(b) and explaining how “[c]ourts do not maintain actions; litigants do”).

50
See id. (“Rule 23 automatically applies ‘in all civil actions and proceedings in the United States district courts.’”
(citation omitted) (emphasis in original)).

7

conflict with Rule 23. 51 Said differently, “Rule 23 provides a one-size-fits-all formula for
deciding the class action question.” 52 This binding interpretation requires this court to conclude
Rule 23 answers the question in dispute in this case. Under Rule 23(b), a plaintiff can always
maintain a class action once certain requirements are met, regardless of the claim. Under §
203(3), a plaintiff is never allowed to bring a class action under NISNPIA. The two rules “are in
direct, unavoidable conflict,” 53 and there is no room for § 203(3) to operate.
Sundance contends recent decisions in this District should persuade this court to find
Rule 23 and NISNPIA are reconcilable. 54 But this court is not persuaded by the reasoning in
those cases. First, in Callegari, this court found no conflict between Rule 23 and the Utah
Consumer Sales Practices Act’s (UCSPA’s) tolerance of class actions only when a plaintiff
pleads damages “caused by an act or practice” as specified under the UCSPA. 55 The court
concluded the two rules could operate “side by side” because “[t]he language of Rule 23 may be
read to be permissive” and “Rule 23 does not explicitly set forth exclusive procedural
requirements for maintaining a class action.” 56 Similarly, in Fullmer, this court relied on the
reasoning in Callegari to conclude there was no conflict between Sections 13-11-19(2) and
(4)(a) of the UCSPA and Rule 23. 57 The court applied “[t]he same logic” as in Callegari and
found “UCSPA subsections (2) and (4)(a) and Rule 23 . . . capable of coexisting,” despite the

51
Id. at 401 (“[A] State cannot limit [Rule 23’s] permission by structuring one part of its statute to track Rule 23 and
enacting another part that imposes additional requirements.”).
52

Id. at 399.

53

Curry, 2023 WL 6318108, at *3.

54
Motion at 9 (citing Callegari v. Blendtec, Inc., No. 2:18-CV-308-DB, 2018 WL 5808805 (D. Utah Nov. 6, 2018)
and Fullmer v. A-1 Collection Agency, LLC, No. 4:20-CV-00143-DN-PK, 2022 WL 1538675 (D. Utah May 16,
2022).
55

Callegari, 2018 WL 5808805, at *2 (D. Utah Nov. 6, 2018).

56

Id. at *4.

57

Fullmer, 2022 WL 1538675, at *3.

8

UCSPA’s class action limitation. 58 But this court respectfully disagrees with the reasoning in
Callegari and Fullmer. As the Supreme Court instructed in Shady Grove, Rule 23 creates a
categorical rule entitling a plaintiff to pursue his claim as a class action. 59 Once a plaintiff elects
to bring a class action and satisfies Rule 23’s requirements, courts must permit plaintiffs to
proceed as a class. 60 As such, Rule 23 cannot be read to be permissive under Step One, 61 and
any state statute—like NISNPIA or the UCSPA—restricting a party’s ability to bring a class
action more than what is already articulated in Rule 23 necessarily and directly conflicts with the
Rule.
Thus, having determined Rule 23 and § 203(3) are in direct conflict, Rule 23 will govern
unless it violates the Enabling Act. 62
B. Rule 23’s Operation Does Not Abridge, Enlarge, or Modify any Substantive
Right or Remedy Created by NISNPIA.
Justice Stevens departed from the majority’s holding in Shady Grove with respect to Step
Two. His concurrence therefore controls this part of the analysis in the Tenth Circuit. 63 Under
this Step, a conflicting federal rule controls unless it violates the Enabling Act by abridging,

58

Id.

59

Shady Grove, 559 U.S. at 398 (plurality opinion).

60

See id. at 400–01.

61

See id.

62

See id. at 421 (Stevens, J., concurring) (citing 28 U.S.C. § 2072(b)).

63
Id. at 411 (plurality opinion) (“The concurrence . . . departs from us only with respect to the second part of the
test, i.e., whether application of the Federal Rule violates § 2072(b) . . . .”); Marks v. United States, 430 U.S. 188,
193 (1977) (“When a fragmented Court decides a case and no single rationale explaining the result enjoys the assent
of five Justices, the holding of the Court may be viewed as that position taken by those Members who concurred in
the judgments on the narrowest grounds.” (quotations omitted)); Curry, 2023 WL 6318108, at *3 (“The Stevens
concurrence is controlling in the Tenth Circuit as to Shady Grove Step Two . . . .” (citations omitted)); Garman v.
Campbell Cnty. Sch. Dist. No. 1, 630 F.3d 977, 985 (10th Cir. 2010) (relying on the Stevens concurrence to
determine “whether the state law actually is part of a State’s framework of substantive rights or remedies” (citation
omitted)).

9

enlarging, or modifying a state’s rights or remedies. 64 Instead of joining the plurality and finding
an Enabling Act violation based on the form of the state law—i.e., whether it is traditionally
substantive or procedural—Justice Stevens directs federal courts to focus on whether the state
rule “function[s] as a part of the [s]tate’s definition of substantive rights and remedies.” 65 Thus,
states may use “a traditionally procedural vehicle as a means of defining the scope of substantive
rights or remedies,” 66 and federal courts must respect that choice. This situation is rare,
however. Justice Stevens cautions “the bar for finding an Enabling Act problem is a high one” 67
and there must be “little doubt” that application of a federal rule would alter a state-created right
or remedy. 68 Indeed, “few seemingly [state] ‘procedural’ rules define the scope of a substantive
right or remedy.” 69 These state procedural rules “make it significantly more difficult to bring or
to prove a claim, thus serving to limit the scope of that claim” or “define the amount of
recovery.” 70
Here, Sundance insists NISNPIA’s text and legislative history prove § 203(3) operates to
define the scope of NISNPIA’s substantive rights or remedies. To support these arguments,
Sundance first relies on the plain language of NISNPIA and the placement of § 203(3) in the
“Liability” section of the statute. 71 NISNPIA reads in relevant part:

64

Shady Grove, 559 U.S. at 431 (Stevens, J., concurring).

65

Id. at 416–17.

66

Id. at 420.

67

Id. at 432.

68

Id. at 432.

69

Id. at 428.

70
Id. at 420 (emphasis added). Examples include requiring “plaintiffs to post bond before suing,” “state statute[s] of
limitations,” “state-imposed burdens of proof,” or “state procedure for examining jury verdicts as means of capping
the available remedy.” Id. at 420, 420 n.4 (citing Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 555 (1949),
Guar. Tr. Co. v. York, 326 U.S. 99 (1945), and Gasperini v. Ctr. for Humans., Inc., 518 U.S. 415, 427 (1996)).
71

See Motion at 10.

10

13-37-203 Liability.
(1) A person may bring an action against a commercial entity in a court of competent
jurisdiction in this state if: (a) the commercial entity enters into a consumer transaction
with that person; (b) as a result of the consumer transaction described in Subsection
(1)(a), the commercial entity obtains nonpublic personal information concerning that
person; and (c) the commercial entity violates this chapter.
(2) In an action brought under Subsection (1), a commercial entity that violates this
chapter is liable to the person who brings the action for: (a) $500 for each time the
commercial entity fails to provide the notice required by this section in relation to the
nonpublic personal information of the person who brings the action; and (b) court costs.
(3) A person may not bring a class action under this chapter.
Substantive rights are “the rules of decision by which [a] court will adjudicate [a party’s]
rights.” 72 And a “rule of decision” is “[a] rule, statute, body of law, or prior decision that
provides the basis for deciding or adjudicating a case.” 73 Thus, in its most basic sense, the
substantive right NISNPIA creates is the right for a “person” not to have their nonpublic personal
information, which was obtained as a result of a consumer transaction, disclosed by a
commercial entity without receiving proper notice. 74 This right is created in § 203(1) with
implicit references to §§ 201 (discussing the notice requirements imposed on commercial
entities), 202 (articulating the scope of the prohibited conduct), and 102 (defining various terms
used throughout the statute). The right created in § 203(1) creates corresponding duties owed by
commercial entities—duties to either provide the statutorily defined notice to consumers or to
avoid disclosing nonpublic personal information altogether. 75

Shady Grove, 559 U.S. at 407 (plurality opinion) (citation omitted); Lisk v. Lumber One Wood Preserving, LLC,
792 F.3d 1331, 1337 (11th Cir. 2015) (citations omitted).
72

73

Rule of Decision, Black’s Law Dictionary (12th ed. 2024).

74

See Utah Code § 13-37-203(1).

Id. § 13-37-201(1)(a) (“In accordance with this section, a commercial entity shall provide the notice described in
this section . . .”); Id. § 13-37-202(1) (“A commercial entity may not disclose nonpublic personal information that
the commercial entity obtained on or after January 1, 2004, as a result of a consumer transaction if the commercial
entity fails to comply with Section 13-37-201.”).
75

11

A “remedy” consists of what “a court can do for a litigant who has been wronged or is
about to be wronged.” 76 Section 203(2) clearly provides a remedy of “$500” and “court costs”
for “the person who brings the action.” Section 203(2) references § 203(1) and, like § 203(1),
implicitly references §§ 201, 202, and 102. But §§ 203(1) and 203(2)—the provisions creating
the rights, duties, and remedies—never reference, acknowledge, or incorporate § 203(3)—the
class action bar. In fact, besides being codified in the same “Liability” section, these subsections
are entirely ignorant of § 203(3). Thus, the procedural device Utah elects to employ or avoid in
order to aggregate or adjudicate NISNPIA claims does not appear to affect the rights or remedies
created under the statute as § 203(3) stands alone from any statutory discussion of or internal
references to NISNPIA’s substantive components.
Shady Grove counsels that the ability to join together as a class is “a traditionally
procedural question.” 77 It would therefore be rare for a state’s class action bar to define the
scope of a state statute’s substantive rights or remedies. 78 And § 203(3)’s class action bar does
not implicate one of the rare situations indicating an Enabling Act violation; it does not “make it
significantly more difficult to bring or to prove a claim, thus serving to limit the scope of that

Remedy, Black’s Law Dictionary (12th ed. 2024) (quoting Douglas Laycock, Modern American Remedies 1 (4th
ed. 2010)).
76

Shady Grove, 559 U.S. at 429 (Stevens, J., concurring) (“[W]hether to join plaintiffs together as a class” is “a
traditionally procedural question.”); see also Dish Network L.L.C. v. Ray, 900 F.3d 1240, 1254 (10th Cir. 2018)
(Tymkovich, C.J., concurring) (citing Epic Sys. Corp. v. Lewis, 584 U.S. 497, 511–13 (2018)); Deposit Guar. Nat.
Bank v. Roper, 445 U.S. 326, 332 (1980) (“[T]he right of a litigant to employ Rule 23 is a procedural right only,
ancillary to the litigation of substantive claims.”).
77

See Shady Grove, 559 U.S. at 432 (Stevens, J., concurring) (noting how an Enabling Act violation may be found
when “seemingly procedural rules . . . make it significantly more difficult to bring or to prove a claim, thus serving
to limit the scope of that claim” or “define the amount of recovery” while explaining how “[t]he mere possibility
that a federal rule would alter a state-created right is not sufficient. There must be little doubt.”); see also Curry,
2023 WL 6318108, at *6 (explaining how because “Rule 23 is merely a ‘species of joinder,’ . . . [t]he traditionally
procedural class action form in a particular statute must, then, be truly inseparable from the substantive rights and
remedies before a Rule Enabling Act problem arises.” (citing Shady Grove, 559 U.S. at 423)).
78

12

claim,” nor does it “define the amount of recovery.” 79 While an attempt to bring a class action
under NISNPIA in Utah state court would undoubtedly be met with decertification, the
corresponding rights, duties, and remedies imposed and available under NISNPIA would remain
untouched. Plaintiffs would retain their right to sue and likely could pursue joint actions under
Utah Rule of Civil Procedure 20 80 or proceed individually. Further, the path to proving a
NISNPIA violation would be the same, and plaintiffs would be entitled to the same $500 remedy
under § 203(2), regardless of whether a joinder device is employed. Certainly, § 203(3)’s class
action bar makes it less likely that some plaintiffs will bring a NISNPIA claim in Utah state
court, but it does not make it significantly more difficult. As Justice Scalia observed in Shady
Grove, “[t]he likelihood that some (even many) plaintiffs will be induced to sue by the
availability of a class action is just the sort of ‘incidental effec[t]’ we have long held does not
violate [the Enabling Act].” 81
The court is equally unpersuaded by Sundance’s argument that the use of the word
“person” in the singular in § 203(1) is significant, suggesting a limitation of class actions within
the text of the subsection creating the right. 82 Sundance acknowledges the Utah Rules of
Construction provide “[t]he singular includes the plural, and the plural includes the singular.” 83
Still, Sundance argues such a construction is impermissible here as it would be “inconsistent
with the manifest intent of the Legislature” and “repugnant to the context of the statute.” 84 As

79

Shady Grove at 420 (emphasis added).

Utah Rule Civ. P. 20 (“All persons may join in one action as plaintiffs if they assert any right to relief jointly,
severally, or in the alternative in respect of or arising out of the same transaction, occurrence, or series of
transactions or occurrences and if any question of law or fact common to all of them will arise in the action.”).
80

81

Shady Grove, 559 U.S. at 408 (plurality opinion) (second alteration in original) (citation omitted).

82

Motion at 17.

83

Id. (citing Utah Code § 68-3-12(1)(b)).

84

Id. (citing Utah Code § 68-3-12(1)(a)).

13

explained below, the court is unable to discern the manifest intent of the Utah Legislature with
respect to § 203(3). And it is difficult to construe “person” as only permitting individual actions
when all substantive portions of the statute ignore § 203(3), and when multiple plaintiffs can join
together pursuant to Utah Rule of Civil Procedure 20 to pursue their claims under NISNPIA.
Moreover, the court is not convinced the placement of § 203(3) in the Liability section of
NISNPIA suggests § 203(3) defines the scope of NISNPIA’s rights and remedies. As the
Eleventh Circuit explained, “the question whether a federal rule abridges, enlarges, or modifies a
substantive right turns on matters of substance—not on the placement of a statute within a state
code.” 85 The court acknowledges that a complete class action bar cabined to a single statutory
section makes the determination of whether § 203(3) defines the scope of NISNPIA’s
substantive rights or remedies a closer call than the universally applicable New York statute at
issue in Shady Grove. 86 The court also recognizes there are additional, practical consequences
faced by some defendants when class action joinder is tolerated. Indeed, class actions often
subject defendants to more costly and financially risky litigation. But what is missing here are
arguments and evidence leaving the court with “little doubt” that the application of a traditionally
procedural joinder device like Rule 23 would alter NISNPIA’s substantive rights or remedies. 87
The practical consequences of class actions born by defendants have long been deemed by the

85

Lisk, 792 F.3d at 1336 (11th Cir. 2015).

See Roberts, 321 F. Supp. 3d at 1257–58 (recognizing how a complete bar to class action certification and the fact
that the provision is found within the text of the state statute “touches more directly on a potential plaintiff’s
substantive rights”).
86

87

Shady Grove, at 432 (Stevens, J., concurring).

14

Supreme Court to be incidental, not substantive. 88 And the fact that NISNPIA’s substantive
sections do not incorporate or reference § 203(3) undermines Sundance’s attempt to demonstrate
an Enabling Act violation. In fact, all state statutes cited by Sundance in its briefs that were
found to control over Rule 23 acknowledged or created the class action limitation within the very
sentence or subsection that created the corresponding right or remedy. 89 Such a statutory scheme
is missing here, which would have provided much stronger evidence suggesting the class action
bar is actually bound up with a state right or remedy.
Finally, nothing in the legislative history encourages a different result. Sundance points
to two statements made by NISNPIA’s sponsor, Representative Aagard, indicating he
purposefully and cautiously drafted NISNPIA to limit the “penalties” available under the Act. 90

Id. at 408 (plurality opinion) (“The likelihood that some (even many) plaintiffs will be induced to sue by the
availability of a class action is just the sort of ‘incidental effect[t] we have long held does not violate [the Enabling
Act].” (first alteration in original) (citation omitted)); id. at 434 (Stevens, J., concurring) (“Any device that makes
litigation easier makes it easier for plaintiffs to recover damages.”); see also Roper, 445 U.S. at 332 (“[T]he right of
a litigant to employ Rule 23 is a procedural right only, ancillary to the litigation of substantive claims.”).
88

See Colo. Rev. Stat. § 6-1-113(2) (“Except in a class action or a case brought for a violation of section 6-1-709,
and notwithstanding any other law, any person who, in a private civil action, is found to have engaged in or caused
another to engage in any deceptive trade practice listed in this article 1 is liable in an amount equal to . . . [t]he
greater of . . . [t]he amount of actual damages sustained . . . [f]ive hundred dollars; or . . . [t]here times the amount of
actual damages sustained, if it is established by clear and convincing evidence that such person engaged in bad faith
conduct . . . .”); Tenn. Code Ann. § 47-18-109(a)(1) (“Any person who suffers an ascertainable loss of money or
property, . . . as a result of the use or employment by another person of an unfair or deceptive act or practice
described in § 47-18-104(b) and declared to be unlawful by this part, may bring an action individually to recover
actual damages.”); S.C. Code Ann. § 39-5-140(a) (“Any person who suffers any ascertainable loss of money or
property, real or personal, as a result of the use or employment by another person of an unfair or deceptive method,
act or practice declared unlawful by Section 39-5-20 may bring an action individually, but not in a representative
capacity, to recover actual damages.”); 740 Ill. Comp. Stat. § 10/7(2) (“Any person who has been injured in his
business or property, or is threatened with such injury, by a violation of Section 3 of this Act may maintain an action
in the Circuit Court for damages, or for an injunction, or both, against any person who has committed such violation.
. . . Provided further that no person shall be authorized to maintain a class action in any court of this State for
indirect purchasers asserting claims under this Act, with the sole exception of this State's Attorney General, who
may maintain an action parens patriae as provided in this subsection.”).
89

Specifically, Representative Aagard, stated: “I purposely limited the penalties just to avoid, uh, to take care of any
unintended consequences. So I think we’re fine.” H.B. 40s1, 55 Leg., Gen. Sess., Day 12 (Utah, Jan. 29, 2003). He
later explained “[a]nd my course of action, what I’ve chosen to do is take one bite at a time on this and deal with
things as they move along. I don’t want to move too fast ‘cause we need to be very careful for this type of issue just
because of where it reaches. . . . So I’m just trying to take a cautious approach so that we don’t have some
problems.” Id.
90

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These statements, Sundance argues, suggest the class action bar in § 203(3) was intended to
define the scope of the state-created rights and remedies. 91 The court disagrees.
When evaluating legislative history under Shady Grove, Justice Stevens explained, “it is
necessary to distinguish between procedural rules adopted for some policy reason and seemingly
procedural rules that are intimately bound up in the scope of a substantive right or remedy.
Although almost every rule is adopted for some reason and has some effect on the outcome of
litigation, not every state rule ‘defines the dimensions of [a] claim itself.’” 92 In fact, even
statements indicating the legislature desired to avoid “annihilating punishment of the
defendant” 93 in Shady Grove were not particularly strong evidence of an Enabling Act problem
because “[a]ny device that makes litigation easier makes it easier for plaintiffs to recover
damages.” 94
Here, Representative Aagard’s statements are insufficient to demonstrate an Enabling Act
violation. His statements at best provide weak, speculative evidence of the Utah Legislature’s
intent as they are devoid of any reference to particular words in NISNPIA’s statutory text. 95 It is
also unclear whether his references to limited “penalties” were directed at § 203(3). It is just as
likely “penalties” referred only to the modest $500 remedy available under § 202(2). While §

91

Motion at 3.

92

Shady Grove, 559 U.S. at 433–34 (Stevens, J., concurring).

93

Id. at 434.

94

Id.

It is well-established that “[t]he contemporaneous remarks of a sponsor of legislation are certainly not controlling
in analyzing legislative history.” Weinberger v. Rossi, 456 U.S. 25, 35 n.15 (1982). Although courts should be
“extremely wary of testimony before committee hearings and debates on the floor of Congress,” courts may make an
exception for “precise analyses of statutory phrases by the sponsors of the proposed laws.” S & E Contractors, Inc.
v. U.S., 406 U.S. 1, 13 n.9 (1972); see also Glaxo Operations UK Ltd. v. Quigg, 894 F.2d 392, 398 (Fed. Cir. 1990)
(acknowledging that a sponsor’s remarks should be afforded some weight as to the meaning of a bill but that this
weight is only justified when the remarks are directed to the intended meaning of particular words in a statute)
(citing Regan v. Wald, 468 U.S. 222, 237 (1984)).
95

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203(3) was undoubtedly adopted for some policy reason, the court cannot conclude it was
adopted with the intent to define the scope of NISNPIA’s rights or remedies. In Justice
Stevens’s words, the legislative history cited by Sundance fails to “clearly describe a judgment”
that § 203(3) is “intimately bound up” in the substantive rights and remedies of NISNPIA. 96 It is
therefore insufficient to satisfy Sundance’s heavy burden to show an Enabling Act violation.
Ultimately, because there is a direct conflict between Rule 23 and § 203(3), Rule 23
governs unless it violates the Enabling Act. And in light of Sundance’s heavy burden and the
lack of any clear evidence suggesting § 203(3) defines the scope of NISNPIA’s rights or
remedies, the court determines Rule 23 does not violate the Enabling Act. Plaintiffs are
therefore entitled to maintain their class action, provided Rule 23’s other requirements are
satisfied, and are capable of demonstrating the amount-in-controversy requirement necessary to
establish diversity jurisdiction under CAFA.
II.

The Factual Allegations in the Complaint are Sufficient to State a Claim for
Relief under NISNPIA.

Sundance alternatively argues Plaintiffs’ claims fail because “they do not adequately
allege, beyond mere conclusion, that Sundance disclosed their ‘nonpublic personal
information.’” 97 Sundance insists the Complaint omits any specific facts that tie Plaintiffs’
information to the alleged practice of maintaining customer lists and selling the list to third
parties. 98 According to Sundance, Plaintiffs only rely on an impermissible inference that

96

Shady Grove, 559 U.S. at 432 (Stevens, J., concurring).

97

Motion at 20.

98

Id. at 21.

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because Sundance sold all its customers’ Private Purchase Information, and because Plaintiffs
were Sundance customers, Sundance must have sold Plaintiffs’ information too. 99
The court disagrees with Sundance. A review of the allegations in the First Amended
Complaint reveals how between 2004 and 2024, each named Plaintiff purchased products from
Sundance by placing orders on Sundance’s website. 100 Sundance completed the sales by
shipping the products to each Plaintiff from a location within Utah. 101 Sundance thereafter failed
to notify Plaintiffs that it would disclose Plaintiffs’ Private Purchase Information, and Plaintiffs
never authorized Sundance to do so. 102 And at times, Sundance disclosed each Plaintiffs’ Private
Purchase Information to various third parties for compensation. 103 In addition to these Plaintiffspecific allegations, Plaintiffs also allege more broadly that Sundance disclosed “all of its
customers’ Private Purchase Information,” 104 which would necessarily encompass Plaintiffs’
information.
Still, Sundance contends “[t]here are no allegations specific to any Plaintiff that states
what information was gathered from that Plaintiff, what information was disclosed, and to
whom.” 105 This is incorrect. There are clearly allegations indicating as much. The information
gathered consisted of each Plaintiff’s name, home address, and purchase history. 106 This
information was later “enhanced” to include each Plaintiff’s gender, age, religion, and

99

Reply at 10.

100

Complaint ¶¶ 9, 14, 19, 24, 29, 34, 39, 44, 49, 54, 59.

101

Id. ¶¶ 11, 16, 21, 26, 31, 36, 41, 46, 51, 56, 61.

102

Id. ¶¶ 10, 15, 20, 25, 30, 35, 40, 45, 50, 55, 60.

103
Id. ¶¶ 116–17 (“Sundance disclosed customer lists containing the Private Purchase Information of all of its
customers, including that of each of the Plaintiffs and Class members . . . .”).
104

Id. ¶ 5.

105

Motion at 21.

106

Complaint ¶¶ 5, 95.

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ethnicity. 107 Sundance disclosed, without authorization or notice, each Plaintiff’s Private
Purchase Information to third parties, including data aggregators, data cooperatives, list brokers,
aggressive advertisers, direct-marketing companies, political organizations, non-profit
companies, and others. 108 Ultimately, as written, the First Amended Complaint allows “the court
to draw the reasonable inference that the defendant is liable for the misconduct alleged.” 109 As
such, Plaintiffs adequately state a claim for relief under NISNPIA.
CONCLUSION
For the foregoing reasons, Sundance’s Motion to Dismiss is DENIED. 110
SO ORDERED this 25th day of November 2024.
BY THE COURT:

____________________________
ROBERT J. SHELBY
United States Chief District Judge

107

Id. ¶ 96.

108

Id. ¶¶ 1, 12, 22, 27, 32, 37, 42, 47, 52, 57, 62, 98.

109

Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556).

110

Dkt. 23.

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