Madison Square Garden v. The SLA: Let Battle Commence
Featured Industry Updates

Madison Square Garden v. The SLA: Let Battle Commence

Posted By: Alexandra Becker

Madison Square Garden, the site of many famous fights, is now the venue for a new clash of heavyweights. James Dolan, the owner of Madison Square Garden, Radio City Music Hall and Beacon Theater, made headlines in recent months for his policy of preventing attorneys from firms handling civil suits against his properties from entering his venues. The issue is further compounded by the fact that the venues are using facial recognition software to enforce the bans; causing a number of affected law firms to take action, including filing lawsuits and/or lodging complaints with government authorities. 

On February 13, the New York State Liquor Authority (the “SLA”) filed charges against the entities owned by Mr. Dolan (the “MSG Entities”) alleging that the so-called “Adverse Attorney Policy” constitutes a violation of their liquor licenses. In response, Mr. Dolan filed an Article 78 Proceeding against the SLA in New York County Supreme Court on March 11. The colorfully written Petition seeks a judgment against the SLA, among other things, vacating the SLA’s pending charges, and barring the SLA from pursuing these charges or taking any other action against these entities on the basis of the Adverse Attorney Policy. The petition also seeks a declaration from the Court that the Rule the SLA is seeking to enforce is invalid and inapplicable in this instance. 

The Petition names not only the SLA, but also its CEO, Assistant General Counsel, and an Investigator, as Respondents, alleging that the CEO was “complicit in the SLA’s misconduct” and the General Counsel “directed arbitrary harassing investigative reports that were untethered to any legitimate purpose.” The Petition also details alleged conduct by the SLA Investigator, which it alleges constitutes harassment. 

The SLA’s primary basis for the charges against the MSG Entities is that the Adverse Attorney Policy has resulted in the licensed premises ceasing “to be operated as a bona fide premises open to the public” as required by the license. The SLA Notices of Pleading cite to SLA Rule 53.1(d) which provides, in relevant part, “[w]here any licensed premises ceases to be operated as a bona fide premises within the contemplation of the license issued for such premises, in the judgment of the Authority.”

As the Petition filed by Mr. Dolan notes, the phrase “open to the public” which forms part of the basis of the charges against the MSG Entities, does not actually appear in the Alcoholic Beverage Control Law (the “ABC Law”) or the SLA’s Rules. The Petition asserts that the concept of requiring licensees to be “open to the public” is the result of the SLA’s policy of requiring certain businesses to obtain the more expensive On-Premises license as opposed to a Catering License and argues that because the MSG Entities have paid the higher fees for On-Premises licenses, the “rationale does not apply here.”

While it is difficult to follow the logic or applicability of that particular theory, the Petition also argues that the Adverse Attorney Policy does not violate the requirement that the premises be open to the public, as it results in the exclusion of only a small group of people on a temporary basis- during the pendency of litigation. Further, that the MSG Entities are being targeted by the SLA, since licensees typically have discretion to prohibit entry to patrons for a variety of reasons, including appearance, dress and age. Many bars, for example, refuse entry to individuals on the basis that their attire is in violation of the venue’s dress code, or on the basis that certain attire may be associated with a gang affiliation. The distinction made by the Authority, however, is that the barring of adverse attorneys is “not for reasons to do with responsibilities under the license, but because such persons have pending lawsuits” against the MSG Entities.

In order to prevail in his case, Mr. Dolan will need the Court to make a determination that the SLA’s conduct was “arbitrary and capricious,” a high standard designed to give State agencies the authority to interpret statutes within their area of expertise. This will be particularly interesting as the Rule at issue- Rule 53.1- as well as a number of other provisions in both the SLA’s Rules and the ABC Law, contain phrases such as “in the judgment of the Authority.” This specifically gives the SLA the ability to interpret and adapt the applicability of a given Rule or Law to different situations, or, in the words of the Petition, the “unfettered ability to arbitrarily weaponize it toward whichever enforcement goal it pleases.” 

Regardless of which side-if any- you are rooting for in this particular conflict, there can be no doubt that the industry will be watching, and that the stakes are high for both parties.     

Contact Whiteman Osterman & Hanna Today

If you have questions regarding the operation of your existing New York licensed business or are contemplating applying for a new license, don’t hesitate to get in touch with Alexandra Becker by e-mail (  or phone (518.487.7725) to see how the Alcoholic Beverage Team at Whiteman Osterman & Hanna may be able to assist.

Tags:   Alcoholic Beverage / SLA /