Lawsuits against Madison Square Garden or one of its entities might now be met with a temporary ban from events.
Image of MSG welcoming fans it hasn’t banned – NBC.com
Madison Square Garden Entertainment Corporation (“MSG”) is the business that owns the popular Madison Square Garden, Radio City, Beacon Theater, and Chicago Theater venues. The venues host groups like the New York Knicks, the New York Rangers, and the Radio City Rockettes. The business also owns an entertainment network that shows exclusive Rangers and Knicks content across four states. [1]
MSG has recently taken to banning lawyers who chose to represent people in actions against them. The bans are temporary and affect entire firms. MSG cites discovery and ethics concerns for this move.
In March of 2021, Madison Square Garden Entertainment announced it would be merging with MSG Networks.[2] Shareholders brought suit after the merger, claiming that company chairman James Dolan violated his fiduciary duty by merging two companies he controlled and overcompensating for the merger. [3] In response to the suit, MSG banned attorneys representing shareholders from attending any event at an MSG-owned venue.
MSG took this action itself. The letter was sent directly to the firms representing the shareholders. The letter was not sent by the firm representing MSG in the action, but rather by MSG’s senior vice president for legal and business affairs. The plaintiff’s firm accused MSG of trying to gain a “perceived litigation advantage” through the “frivolous” ban. The firm also stated it would be looking into the decision during the discovery process.[4]
In September of 2022, a group of ticket resellers brought a suit against MSG. The resellers claim that MSG cut them off after the Rangers and Knicks started to play better. According to them, MSG no longer needed to dump their tickets off to the resale market and could instead charge a premium for their tickets. The resellers claim that MSG acted in bad faith when it declined to sell tickets to them after the resellers had been loyal through a slew of terrible seasons.[5]
MSG took action against the firm representing the plaintiffs again. Nine days after filing suit, the firm was sent a letter informing them that all 60 of its attorneys were barred from any MSG-owned property. This time, MSG cited the state bar ethics rules as the reason for the ban, and cited MSG policy. The firm and its lawyers are banned until the litigation resolves.[6]
The representing firm did not take the action lightly. Larry Hutcher is the managing partner of Davidoff Hutcher & Citron LLP, the New York City-based firm representing the resellers. Hutcher has been a Knicks season ticket holder for 40 years and is one of many at the firm with plans to attend an event at an MSG venue. Hutcher responded to the ban with a letter claiming that it was unlawful and unfair. MSG responded, claiming Hutcher’s season ticket had expired and that MSG had the right to revoke his license.[7]
Hutcher, and the rest of his firm, have since brought suit against MSG. They claim the ban was issued to “harass and intimidate” them.[8] The suit requested an emergency order allowing Hutcher to purchase tickets. The request was denied at the trial level, but an appeal is pending at the First Department. At the trial level, Judge Lyle Frank noted that the court did not agree with MSG’s decision to ban the attorneys, nor was it realistic that there would be improper discovery. However, the request for an emergency order was denied because the ban was lawful. [9]
MSG has created a dangerous precedent. Suing MSG now seems to mean a ban for any firm that dares to represent a party against them. MSG cites ethics as part of its reasoning for revoking tickets. The rules of ethics in New York state, “A lawyer does not violate [the rules] by avoiding offensive tactics, and by treating with courtesy and consideration all persons involved in the legal process.”[10] The same rule also states that a lawyer should not be swayed in their representation because of popular disproval and affirms that the views of a client are not the views of the attorney. [11] It seems clear that MSG could allow attorneys into its venues without fear of violating an ethics rule.
The ban raises ethics and abuse of power concerns of its own. MSG effectively operates and benefits from a monopoly television contract and two monopoly professional sports franchises. To exercise that monopoly power over attorneys representing plaintiffs in an action concerning MSG’s own business practice raises a serious concern about its own ethics. The two suits that have led to bans concern MSG management unethically colluding for a merger to the detriment of its shareholders. The other suit claims MSG unethically (and illegally) used its unilateral control over tickets to the detriment of business partners. Weaponizing tickets again serves to reaffirm that MSG will use its position to further its already unfair advantage over others.
[1] https://www.msgentertainment.com/our-company/
[2] https://www.msgnetworks.com/msg-entertainment-to-acquire-msg-networks/#:~:text=NEW%20YORK%2C%20NY%2C%20March%2026,stock%2C%20fixed%20exchange%20ratio%20transaction.
[3] https://www.wolfpopper.com/case.cfm?ID=1222
[4] https://www.law360.com/articles/1509429/madison-square-garden-bans-suing-attys-from-venues
[5] https://nypost.com/2022/10/15/scalpers-sue-msg-after-knicks-rangers-tix-arent-renewed/
[6] https://www.nytimes.com/2022/10/13/sports/lawsuit-msg-lawyers-banned-knicks-rangers.html
[7] https://www.nytimes.com/2022/10/13/sports/lawsuit-msg-lawyers-banned-knicks-rangers.html
[8] https://nypost.com/2022/10/14/law-firm-in-msg-suit-barred-from-knicks-rangers-games/
[9] Hutcher v Madison Square Garden Entertainment Corp.,Index No. 653793/2022
[10] New York Rules of Professional Conduct 1.2(g)
[11] See id. at comment [5].
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