• by Wendy Davis  @wendyndavis, May 10, 2024

A federal judge has thrown out a lawsuit accusing Madison Square Garden Entertainment of violating a New York City privacy ordinance that restricts companies' ability to profit from biometric data.

The ruling, issued by U.S. District Court Judge Lewis Kaplan in Manhattan, comes in a class-action complaint brought in 2023 by Aaron Gross and Jacob Blumenkrantz. They alleged that Madison Square Garden Entertainment -- which owns venues including the Garden, Radio City Music Hall and the Beacon Theater -- harnessed consumers' biometric data in order to reduce costs associated with litigation.

Gross and Blumenkrantz sued soon after it became widely known that Madison Square Garden owner James Dolan was using facial recognition technology to prevent lawyers who are suing the company (or work at firms that are suing the company) from entering any of its venues.

Their complaint claimed the company was violating a New York City biometric privacy law that took effect in 2021, and includes a provision prohibiting businesses from sharing biometric identifier information in exchange for “anything of value,” or from profiting from a transaction of biometric data.

Gross and Blumenkrantz specifically alleged the company collects biometric data from everyone that enters an entertainment venue and then shares that data with “at least one third-party vendor.”

Madison Square Garden Entertainment argued that the complaint should be dismissed at an early stage. Among other contentions, the company said the complaint lacked allegations that the biometric data was sold to third parties.

In January, U.S. Magistrate Judge James Cott recommended ruling against Madison Square Garden Entertainment, saying in a written ruling that the allegations, if proven true, could support the claim that the company shared biometric data in order to profit by reducing litigation expenses.

Kaplan on Wednesday rejected Cott's recommendation on the grounds that his interpretation of the was profit was too broad.

“If 'profit' were constructed to mean any benefit, then the only permissible commercial sharing of biometric data would be for applications that are not useful,” he wrote.

“As objectionable as defendant's use of biometric data may be, it does not -- at least on the facts alleged -- violate [the ordinance],” he added.