Feb 6 (Reuters) – Madison Sq. Backyard Leisure Corp doesn't need New York’s liquor licensing company to see sworn testimony from its chairman and CEO James Dolan as regulators probe MSG’s coverage of banning plaintiffs legal professionals who're suing the corporate from attending occasions at MSG venues.
Within the newest fallout from the controversial coverage, which MSG enforces by means of the usage of facial recognition know-how, the corporate filed a petition on Friday in New York State Supreme Courtroom to squelch a subpoena issued by the New York State Liquor Authority because the company considers a possible revocation of the corporate’s licenses to promote alcohol.
The liquor licensing board is weighing whether or not MSG’s ban on so-called hostile plaintiffs' legal professionals from about 90 legislation companies violates state laws requiring liquor license holders to be open to the general public. Liquor board regulators issued a Feb. 2 subpoena to Bernstein Litowitz Berger & Grossmann, which is likely one of the plaintiffs companies suing MSG in Delaware Chancery Courtroom over a 2021 restructuring of MSG firms underneath the Dolan household’s management.
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The company requested Bernstein Litowitz to provide, amongst different issues, transcripts of the Chancery Courtroom depositions given by James Dolan and former high-ranking MSG govt Andrew Lustgarten.
The subpoena’s return date was Feb. 6, the identical day that Dolan was scheduled for an interview with liquor board investigators. MSG mentioned in an announcement on Monday afternoon that Dolan was interviewed by state regulators. The corporate mentioned it was “hopeful” that its “full and whole cooperation” with the liquor license board “will put an finish to this investigation.”
On the day it obtained the liquor authority’s subpoena, Bernstein Litowitz notified protection legal professionals within the Chancery Courtroom litigation. The plaintiffs' agency mentioned that underneath the phrases of a confidentiality agreement within the Delaware instances, it will object to the manufacturing of paperwork and testimony marked confidential. Bernstein Litowitz additionally mentioned, nonetheless, that it didn't imagine Dolan’s deposition testimony was truly confidential — and that it will not topic itself to sanctions if it was ordered to show over the fabric.
In a collection of increasingly heated emails final week between MSG counsel Randy Mastro of King & Spalding and Jeroen van Kwawegen of Bernstein Litowitz, Mastro insisted that the subpoena was procedurally improper and that MSG would imminently transfer to quash the liquor board’s demand. (The emails are an exhibit to MSG's quash petition.) The MSG lawyer warned van Kwawegen to not flip over something within the meantime, accusing his agency of “collusion” with New York regulators “for some ulterior motive than any real need to fulfill your authorized obligations.”
Bernstein Litowitz’s van Kwawegen retorted that he had revered the strictures of the Delaware confidentiality settlement and was merely attempting to conform together with his authorized obligations. “In contrast, you are attempting to intimidate me with baseless threats and unfounded assumptions,” he advised Mastro. “Your consumer’s conduct by imposing a ban to go to varied venues on anybody who occurs to disagree with him — enforced by facial recognition software program that was developed to guard us from terrorists and violent hooligans — involves thoughts. The court docket will see your electronic mail for what it's.”
MSG argued in Friday's quash petition that the state liquor authority doesn't have subpoena energy at this early stage of investigation and that the confidential supplies it seeks from the Delaware instances are irrelevant to the liquor board’s investigation of the plaintiffs' lawyer ban.
“These two issues don't have anything to do with each other,” an MSG spokesperson mentioned in response to my question on the quash petition. In a separate affirmation accompanying the quash petition, Mastro mentioned MSG is worried about defending its confidentiality from Freedom of Data Regulation requests, “in gentle of the elevated media consideration and political strain surrounding MSG and its venue coverage.”
Van Kwawegen declined to remark. The New York liquor board’s lead investigator on the MSG matter, Charles Stravalle, didn't reply to my electronic mail. He told MSG in a Feb. 3 electronic mail that he's not searching for confidential info through the subpoena.
MSG’s aggressive response to the liquor authority’s subpoena ought to shock nobody. The corporate, which owns the New York Knicks and Rangers, in addition to venues together with Madison Sq. Backyard and Radio Metropolis Music Corridor, has steadfastly refused to again down from the he plaintiffs' lawyer ban since I first broke information of the coverage final June, regardless of a barrage of adverse publicity. MSG has repeatedly mentioned that it's inside its authorized rights to bar legal professionals who're suing the corporate from entry to personal venues.
In a Jan. 26 interview with a New York tv station, Dolan was defiant concerning the liquor board’s investigation. He mentioned that in response to “threats” to revoke his venues’ liquor licenses, he has contemplated refusing to promote alcohol at a Knicks or Rangers sport and directing offended followers to complain to state regulators.
The plaintiffs' lawyer ban has already backfired in MSG's Delaware litigation, the place Chancellor Kathaleen McCormick described the coverage as “utterly idiotic” and “the stupidest factor I've ever learn.” She additionally mentioned that it strengthened shareholders’ depiction of Dolan as a vindicative bully.
New York Legal professional Basic Letitia James announced final month that her workplace is investigating the ban as a possible violation of New York civil rights legal guidelines. “Forbidding entry to legal professionals representing purchasers who've engaged in litigation towards the corporate could dissuade such legal professionals from taking up legit instances,” James warned MSG.
A New Jersey plaintiffs' agency on MSG’s banned checklist, Davis, Saperstein & Salomon, got here up with the concept of difficult MSG’s liquor licenses after certainly one of its legal professionals, Kelly Conlon, was denied entry to Radio Metropolis Music Corridor as she chaperoned her daughter’s Woman Scout troop.
Identify accomplice Samuel Davis advised me on Tuesday that he’s glad to see the liquor board pushing for solutions from MSG and CEO Dolan. “It’s fairly evident by the way in which they're prosecuting the investigation that they don't seem to be comfy” with the plaintiffs' lawyer ban, he mentioned. “And if Dolan doubles down towards the liquor authorities, Randy Mastro could have a bunch extra disgruntled shareholder lawsuits to cope with.”
UPDATE: This column has been up to date to incorporate MSG's assertion concerning the corporate's assembly on Monday with officers from the New York liquor authority.
Learn extra:
Shareholders blast Madison Sq. Backyard’s ‘implausible’ rationalization for erasing emails
Madison Sq. Backyard doubles down on plaintiffs lawyer ban, even after it backfires
Sport over? Plaintiffs' legal professionals banned from Madison Sq. Backyard by MSG
Reporting By Alison Frankel; enhancing by Leigh Jones
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