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 attorneys who’re suing the corporate from attending occasions at MSG venues.
Within the newest fallout from the controversial coverage, which MSG enforces via the usage of facial recognition expertise, the corporate filed a petition on Friday in New York State Supreme Court docket 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 antagonistic plaintiffs’ attorneys from about 90 legislation corporations 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 without doubt one of the plaintiffs corporations suing MSG in Delaware Chancery Court docket over a 2021 restructuring of MSG firms below the Dolan household’s management.
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The company requested Bernstein Litowitz to supply, amongst different issues, transcripts of the Chancery Court docket 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 stated in an announcement on Monday afternoon that Dolan was interviewed by state regulators. The corporate stated it was “hopeful” that its “full and complete cooperation” with the liquor license board “will put an finish to this investigation.”
On the day it acquired the liquor authority’s subpoena, Bernstein Litowitz notified protection attorneys within the Chancery Court docket litigation. The plaintiffs’ agency stated that below the phrases of a confidentiality settlement within the Delaware circumstances, it could object to the manufacturing of paperwork and testimony marked confidential. Bernstein Litowitz additionally stated, nevertheless, that it didn’t consider Dolan’s deposition testimony was really confidential — and that it could not topic itself to sanctions if it was ordered to show over the fabric.
In a collection of more and more 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 want 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. “Against this, you are attempting to intimidate me with baseless threats and unfounded assumptions,” he instructed Mastro. “Your shopper’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 e 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 circumstances 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 stated in response to my question on the quash petition. In a separate affirmation accompanying the quash petition, Mastro stated MSG is anxious about defending its confidentiality from Freedom of Info Legislation requests, “in mild 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 e mail. He instructed MSG in a Feb. 3 e mail that he’s not looking for confidential data 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 unfavourable publicity. MSG has repeatedly stated that it’s inside its authorized rights to bar attorneys who’re suing the corporate from entry to non-public venues.
In a Jan. 26 interview with a New York tv station, Dolan was defiant concerning the liquor board’s investigation. He stated 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 “fully idiotic” and “the stupidest factor I’ve ever learn.” She additionally stated that it strengthened shareholders’ depiction of Dolan as a vindicative bully.
New York Legal professional Basic Letitia James introduced final month that her workplace is investigating the ban as a possible violation of New York civil rights legal guidelines. “Forbidding entry to attorneys representing shoppers who’ve engaged in litigation towards the corporate might dissuade such attorneys from taking up respectable circumstances,” James warned MSG.
A New Jersey plaintiffs’ agency on MSG’s banned checklist, Davis, Saperstein & Salomon, got here up with the thought of difficult MSG’s liquor licenses after one among its attorneys, Kelly Conlon, was denied entry to Radio Metropolis Music Corridor as she chaperoned her daughter’s Lady Scout troop.
Identify accomplice Samuel Davis instructed 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 aren’t comfy” with the plaintiffs’ lawyer ban, he stated. “And if Dolan doubles down towards the liquor authorities, Randy Mastro may 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
Recreation over? Plaintiffs’ attorneys banned from Madison Sq. Backyard by MSG
Reporting By Alison Frankel; modifying by Leigh Jones
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