Madison Square Garden Beats Suit Over Facial ID System at Venues

Madison Square Garden Entertainment Corp. defeated a lawsuit alleging it collected and used the biometric information of visitors to its entertainment venues in ways that violated New York City law.

Aaron Gross and Jacob Blumenkrantz alleged in a March 2023 lawsuit that MSG illegally used the biometric data it collected to benefit its bottom line as well as identify and remove attorneys associated with law firms engaged in lawsuits against it.

But their allegations weren’t enough to state a claim of a violation of the city’s Biometric Identifier Information Protection Code, Judge Lewis A. Kaplan of the US District Court for the Southern District of New York said Tuesday.

The text of the code makes it illegal for an entity to profit from the transaction of biometric indentifier information, not merely to make use of biometric information so as to benefit the entity in some way, the judge said.

Kaplan set aside Magistrate Judge James L. Cott’s recommendation to allow the plaintiffs’ claim under the biometrics law to proceed. He accepted Cott’s recommendation, though, that their claims of unjust enrichment and violations of the New York Civil Rights Law be dismissed over their failure to allege that the company engaged in commercial use of the biometric information or profited from it.

The plaintiffs alleged that MSG violated the biometrics law because it used the collected facial images to reduce litigation expenses and improve its bottom line, but Kaplan disagreed.

The biometric sharing at issue in the lawsuit was “no different from any other tool for which a company might pay a vendor,” he said. “To say that a company profits when it purchases a product or service defies common sense,” he said.

The plaintiffs’ interpretation of the statute also would effectively ban biometric data sharing by companies, rendering meaningless another section of the law permitting its use where the public has been warned, he said.

Israel David LLC, Peter Romer-Friedman of Washington, Lynda J. Grant of New York, and Christopher K. Leung of Brooklyn represent Gross and the proposed class. Hunton Andrews Kurth LLP represents Madison Square Garden.

The case is Gross v. Madison Square Garden Entm’t Corp., S.D.N.Y., No. 1:23-cv-03380, 5/7/24.