Gross v. Madison Square Garden Entertainment Corp.

Background

The plaintiffs alleged past and ongoing violations of privacy rights, civil rights, and laws governing the use of personal biometric data by Madison Square Garden Entertainment Corp. (MSG). MSG filed a letter-motion under Federal Rule of Civil Procedure 26(c) asking the court to stay, or pause, discovery until the court decided MSG’s motion to dismiss the second amended complaint.

The plaintiffs opposed a complete stay but did not seek full discovery. Instead, they asked the court to require MSG to produce only the operative agreements between MSG and each facial-recognition vendor that MSG had used or currently used at any MSG venue in New York City. MSG continued to oppose even that limited discovery while its dismissal motion was pending.

Legal standard

Rule 26(c) allows a court, for good cause, to issue a protective order to prevent annoyance, embarrassment, oppression, or undue burden or expense. A pending motion to dismiss does not automatically pause discovery, but it may support a pause in appropriate circumstances. The court considered the scope of the requested discovery, the burden of responding, possible prejudice from a pause, and the strength of MSG’s pending dismissal motion.

Court’s reasoning

The court found good cause to stay discovery. It stated that MSG had raised substantial arguments about whether the plaintiffs adequately pleaded all elements of a violation of the New York City Biometrics Law. The court also identified significant questions concerning the New York Civil Rights Laws, including whether some claims were time-barred and whether MSG had used the plaintiffs’ information for advertising, trade, or commercial appropriation. In addition, the court identified preemption issues concerning the unjust-enrichment claim and a question about whether MSG had been enriched by the alleged conduct.

The court did not predict the outcome of the motion to dismiss. It concluded only that the viability of the plaintiffs’ claims was in some doubt and that MSG’s motion appeared not to be legally unfounded. The court also noted that MSG acknowledged the requested agreements would not be substantially burdensome to produce, but MSG claimed production could create costs, affect contractual relationships with vendors and their employees, and generate misleading negative publicity.

The court found that the plaintiffs had not identified a compelling reason to obtain the agreements while the dismissal motion was pending. Their stated concern that delay would impair their ability to remedy an ongoing wrong was insufficient. The court further concluded that the case was less than a year old, that the pause would not substantially or unduly delay the case if it continued, and that the pause could simplify discovery if some claims were dismissed and others survived.

Disposition

The court granted MSG’s motion to stay discovery until MSG’s motion to dismiss was resolved. It directed the Clerk to close Docket Entry No. 31 and mark it as “granted.” The opinion does not decide the motion to dismiss itself.