Atlantic City hotel rate-fixing class action suit dismissed
(Reuters) – Major casino-hotel operators in Atlantic City including Caesars Entertainment and MGM Resorts have persuaded a U.S. judge to dismiss a proposed consumer class action accusing them and a revenue management platform of overcharging for room rentals.
U.S. District Judge Karen Williams in Camden, New Jersey, ruled that the consumers had failed to present enough evidence to let their price-fixing lawsuit move ahead.
Williams dismissed the consumers' lawsuit with prejudice, meaning it cannot be filed again. The case was part of a wave of new lawsuits claiming the use of revenue management platforms that rely on rivals' data can be deemed price-fixing.
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The judge's ruling marked a second setback for plaintiffs claiming that major hotels schemed to artificially jack up room rates. Consumers in a related case have appealed a Nevada federal judge's order dismissing their lawsuit against Wynn Resorts, Caesars and others.
In both cases, the plaintiffs alleged hotel owners fed sensitive internal information — such as real-time price and occupancy data — to a shared software platform that offered pricing recommendations.
The hotels and the software maker, Cendyn, which was also a defendant, have denied any wrongdoing.
Representatives from Cendyn, Caesars Entertainment, MGM Resorts and Hard Rock on Tuesday did not immediately respond to messages seeking comment.
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The plaintiffs' attorneys in the New Jersey case at law firms Lite DePalma Greenberg & Afanador; Burns Charest; and Susman Godfrey did not immediately respond to a similar request.
The consumers said in their lawsuit that the hotels used Cendyn's "Rainmaker" software "as their shared pricing brain" that "does all the hard work for them."
They said "while the AI-driven technology at issue may be fairly novel, the underlying conduct is not."
Cendyn and the hotels countered that there was no direct or circumstantial evidence that the defendants agreed to fix prices. They also said the hotels were not required to accept the software's pricing recommendations.
Williams concluded the plaintiffs failed to show how the hotels used the allegedly confidential data after it was provided to Cendyn. That missing detail, the court said, makes the consumers' case "factually and legally incomplete."
Given that the individual hotels could and did set their own rates, it was "implausible that they tacitly agreed to anything, much less to fix the prices of their hotel rooms," Williams wrote.
