Your Favorite Team is Watching You

Earlier this week, a federal district court in California dismissed a proposed class action lawsuit against the NBA’s Golden State Warriors, and two companies responsible for an innovative app (the Plaintiff and the Court only refer to it as the “App”) that the Warriors offer to their fans. The App’s main purpose is to provide Warrior fans with information on the team (stats, news, etc.) and link the fans and the team through social media. So for example, while attending a Warriors home game at Oracle Arena, fans can access updated stats about the team, view information about the game on Twitter, or use Instagram to upload or view pictures from the arena.

Apps like this are part of an ongoing trend where teams are attempting to enhance the “fan experience.” The belief is that, in the age of mobile devices and social media, fans have greater access to information and shorter attention spans. So they need more engagement, more connectivity and more content than their predecessors.

The Warriors’ App builds on this philosophy. It gathers data on users and then, based on that data, sends them content and advertising tailored to their preferences. The data gathering method is controversial. Essentially, the App tracks users’ locations through connections between the microphone on their phones and audio beacons. When a user turns on the App, the App automatically activates the phone’s microphone. The microphone will then pick up the signals from any audio beacon within range. At this point, the team can pinpoint the user’s location and, from that, better understand the user’s tastes, interests, etc.

The problem that led to the lawsuit is that the microphones pick up more than the audio beacon’s signal. They also capture and record any conversation that the user is having. Theoretically, the Warriors have access to any data from these conversations, which could also help them target the user with content and advertising. For these reasons, Warriors fan Latisha Satchell filed a two-count class action lawsuit against the team alleging that it was “intercepting” and “using” these conversations in violation of the Federal “Wiretap” Act.

The Court dismissed both claims without prejudice, holding that Satchell did not plead “enough facts to state a claim to relief that is plausible on its face.” More specifically, the Court emphasized that Satchell’s complaint did not include any allegations demonstrating that she was talking to a particular person, about a particular topic, while the App was running. So there were no allegations from which the Court could conclude that Defendants intercepted her communications and used them in violation of the Wiretap Act.

Because dismissal was “without prejudice,” Satchell can re-plead the counts. Typically, this is easier in circumstances such as these, where the plaintiff only has to add more specific facts rather than construct an entirely new legal theory.

But in this case, adding specificity presents Satchell with a dilemma. As she gets more particularlized with her allegations, she lessens the potential for certifying a class. This is because her situation would be more unique and, therefore, less amenable to class treatment. In other words, Satchell could be caught between a rock and a hard place, where she cannot rescue her individual claims without damaging her chances for class certification, and she cannot channel her case toward class certification without risking another dismissal. At this point (aside from filing and winning an appeal), it is difficult to see a way forward for her.

Satchell’s dilemma is good news for sports franchises. Victory for the Warriors will allow teams to continue reaching further and further into their fans’ lives. Plaintiffs’ ability to sting them with class action suits challenging their data gathering will be diminished. And as a result, fans can expect more apps, and a growing closeness with their favorite professional teams.