Privacy Suit Against NBA, Dapper Labs Over Top Shot NFT Will Continue After Motion Rejection

On Tuesday, July 2, 2024, the United States District Court for the Northern District of California denied a motion to dismiss a lawsuit against the professional basketball league and website operator.

NBA Properties Inc., which licenses intellectual property for the National Basketball Association, sought to dismiss a putative class action claim that alleged violations of user privacy on the NBA Top Shot website. NBA Top Shot is a platform where users can purchase and trade video clips from NBA games as non-fungible tokens (NFTs). The plaintiff, Thomas Fan, claimed that defendants NBA Properties and Dapper Labs, which operates NBA Top Shot, improperly collected and shared personal information about users’ video viewing habits without consent as required by law.

In a previous order, the court had dismissed Fan’s initial claims against NBA Properties, finding the allegations of a joint venture or partnership between NBA Properties and Dapper Labs to be insufficient. Fan then filed a second amended complaint with new details to support the joint venture theory. The new complaint pointed to public statements from Dapper Labs’ CEO and NBA commissioner that indicated collaboration between the parties. It also noted features on the NBA Top Shot site that could suggest a shared business model.

In its ruling, the court found Fan’s revised allegations were sufficient at the pleading stage to potentially hold NBA Properties liable as part of the alleged joint venture. The court acknowledged that proving the existence of a joint venture is a factual matter that normally requires evaluation well beyond the complaint. However, it also recognized that Fan cited case law supporting that a partnership could exist even where the parties attempt to disclaim that status in agreements.

Ultimately, the court determined the question whether NBA Properties and Dapper Labs formed a joint venture was better addressed later in the litigation process after both sides have a chance to present evidence. It denied the motion to dismiss on these grounds, allowing Fan’s claims against both defendants to proceed to the next stage.

Please contact BlockTribune for access to a copy of this filing.