ENTER THE WORLD OF YESTERDAY, TOMORROW AND FANTASY: WALT DISNEY WORLD'S CREATION AND ITS IMPLICATIONS ON PRIVACY RIGHTS UNDER THE MAGIC BAND SYSTEM.

• Author: Stone, Kaitlyn

1. Introduction

   In 2015, over 54 million people visited the Walt Disney World resort. (1) In 2014, approximately half of guests to Walt Disney World participated in Disney's Magic Band and My Magic+ systems. (2) These systems allow for smoother and more personalized guest experiences by having guests wear the wristbands to serve as their park ticket, room key, and credit card for purchases in the park. (3) Disney advertises these systems as a benefit for the guests, but most visitors to the park do not realize the company is gaining large amounts of detailed information about individual guest behavior. (4)

   Critics of this system believe that it is akin to the National Security Agency ("NSA") and "Big Brother." (5) Still, most guests do not mind the "creepiness" of someone tracking their every move when it is a company that will provide them with lasting family vacation memories rather than the government. (6) This distinction makes sense until you consider one fact: Walt Disney World ("Disney World") has its own government. (7) By establishing their own government structure in order to allow for easier innovation and less government red tape, Walt Disney World has blurred lines between the public and private spheres. (8) This makes it difficult to establish how exactly to apply privacy law to the Magic Band system. (9)

   Additionally, as more and more companies and industries find ways to integrate technology like the Magic Band system into their business structures, conflicts with privacy law will arise more frequently. (10) Both private industries, such as fashion retailers and department stores, as well as public entities, such as states' departments of transportation have started to implement Radio Frequency Identification (RFID) technology in their respective industries. (11) While implementing RFiD technology can have tremendous benefits for the organizations that choose to make use of it, its use also poses an array of privacy concerns. (12) Attempts to address these concerns through technology-specific legislation have been relatively unsuccessful. (13) Users of RFID technology need to implement their own policies in order to protect the privacy of average consumers and protect themselves from invasion of privacy litigation. (14)

   This Note will attempt to resolve some of these legal ambiguities by analyzing the unique problem posed by Disney World's Magic Band system. First, this Note will discuss when a private entity may qualify as a state actor. This note will then look to the evolution of privacy laws both in the state actor context and under the tort of invasion of privacy. Second, this Note will present the unique history and development of Disney World's form of government. Then, this Note will illustrate the intricacies of the Magic Band system and how it presents various privacy concerns. Next this Note will analyze whether Walt Disney World should be classified as a state actor. Finally, this Note will discuss how privacy law should be applied to the Magic Band system in light of the state actor classification.

2. History

   1. When is a Private Entity a State Actor?

      Whether or not a private entity is considered a state actor will determine how privacy law is applied to a given situation. (15) The Constitution only protects an individual from the infringement of rights by a state actor, not individual citizens or private organizations. (16) Therefore, in asserting a violation of a constitutionally protected right, the court must first establish whether the alleged violator is a state actor. (17) This determination generally rests on how closely intertwined the government and private actors are in light of the particular facts of the case. (18) While there have been many theories on the best way to consolidate the precedent on state action, as John Niles, Lauren Tribble and Jennifer Wimsatt articulate, the doctrine can generally be broken down into three basic steps. (19)

      The first step in any state action analysis is to identify what conduct is at issue and who is the actor responsible for the conduct. (20) This step is normally the easiest step because it requires little analysis beyond the identification of the conduct that is at issue in the complaint. (21)

      The next step is to analyze whether the nature of the actor is public or private. (22) If the actor is public in nature, then the conduct is subject to constitutional scrutiny. (23) However, if the actor is private in nature then the conduct is only subject to constitutional scrutiny when the state has sufficiently encouraged the conduct. (24) The nature of the actor can be said to be public if (1) the actor is a governmental entity; or (2) the actor acted in a public capacity during the conduct in question. (25) The third and final step in the state action analysis is to determine when the action of a non-governmental actor that is participating in private conduct can become attributable to the state for purposes of constitutional scrutiny. (26)

      The bulk of the state actor analysis deals with determining when a non-governmental entity becomes a state actor by acting in a public function. (27) The basics of the public function doctrine involve determining whether the conduct at issue is "traditionally, exclusively reserved to the state." (28) In Marsh v. Alabama, (29) the Supreme Court addressed whether a company-owned town was a state actor by analyzing whether the conduct was of the kind that is traditionally reserved for the state. (30) The town was owned by Gulf Shipping Corporation, a shipbuilding company, but had all the characteristics of a normal town or municipality, including residential buildings, public roads, sewer systems and a post office. (31) The State argued the company had the ability to regulate the residents of the town in the same way that a homeowner has the ability to control the conduct of his houseguest. (32) The Court determined that because the company was operating the town in the same way that any non-corporate owned town would be run, they could not infringe upon the constitutional rights of the residents of the town. (33)

      The Supreme Court has also addressed whether providing a public service can classify a private company as a state actor. (34) In Jackson v. Metropolitan Edison Company? (5) the Court addressed whether the fact that a private company is subject to state regulation can support a finding that the private company is a state actor. (36) The utility company was privately owned, but was subject to many state regulations. (37) The Court established that it is not only an evaluation of the company being subject to state regulations, but rather whether there is "a sufficiently close nexus between the state and the challenged action... so that the latter may be fairly treated as that of the state itself." (38) Subsequently, the Court determined that merely because the utility company provided a public service and was heavily regulated by the state, it did not establish a nexus close enough to operate as a state actor.

      If the actor is determined to be nongovernmental and acting in a private nature, then the final step in the analysis is to determine whether the private conduct can be attributed to the State. (40) Niles, Tribble, and Wimsatt highlight the different levels of state involvement, which include prohibition, discouragement, permission, encouragement, and mandate. (41) Private conduct becomes attributable to the state when the state involvement crosses from permission to encouragement. (42) This determination is made based on the subjective and objective intent of the state. (43)

      The Supreme Court addressed this step specifically when they asked whether a city-owned and publicly funded parking facility had encouraged the actions of a privately owned restaurant located within the parking garage in Burton v. Wilmington Parking Authority. (44) While the case was ultimately dismissed, the Supreme Court decided to address the important constitutional question under the state actor doctrine. (45) The Court determined that based on the parking facility's status as a building for "public uses," that it was built using public funds and that the parking authority in charge of the facility was able to perform "essential governmental functions," the parking facility could be determined to be a state actor. (46) Furthermore, based on the relationship between the restaurant and the parking facility--namely that the restaurant relied on the facility to provide a place of business and other benefits, while the parking authority relied on the income generated from leasing the space--the Court recognized a " degree of participation and involvement in discriminatory action, which the it was the design of the Fourteenth Amendment to condemn" and held the parking authority responsible. (47)

      Together, the preceding cases illustrate ways in which private actors that exhibit characteristics typically attributable to public entities can complicate the state actor determination. (48) This determination is essential to the outcome of many cases dealing with the constitutionality of the actions of private actors and the steps outlined by Niles, Tribble, and Wimsatt, and illustrated by the aforementioned cases help to navigate the complex area of state action. (49)

   2. Privacy and the Fourth Amendment

      Now that a conceptual framework for establishing whether a private actor is a state actor has been defined, it is necessary to analyze when a state actor may violate the Constitution's privacy guarantees. (50) The Fourth Amendment of the United States Constitution establishes the first line standard for privacy from the government. (51) However, there have been significant adjustments made to the interpretation of the term "unreasonable" as national security and terrorism become important issues. (52) In an invasion of privacy analysis under the Fourth Amendment, a government search must enter into a place where...