Gibson Decision Hands Atlantic City Casino-Hotels Dismissal of Price-Fixing Claims

By: Sara Benson, Kenneth Racowski & David C. Kully (Holland & Knight) 

In May 2024, the U.S. District Court for the District of Nevada dismissed with prejudice a class action lawsuit alleging that several Las Vegas hotel operators and a software provider violated antitrust laws by using software to make pricing recommendations for hotel rooms. On September 30, 2024, a similar case brought against Atlantic City hotel operators was also dismissed with prejudice by a New Jersey federal court.

Court Ruling Summary
U.S. District Judge Karen M. Williams dismissed the plaintiffs’ amended complaint, citing the same deficiencies under the Sherman Antitrust Act and Twombly pleading standards as in the Gibson case. The case, Cornish-Adebiyi, et al. v. Caesars Entertainment, Inc., et al., No. 1:23-CV-02536-KMW-EAP (D.N.J. Sept. 30, 2024), was dismissed with prejudice.

Factual Background
The proposed class included anyone who had directly rented hotel rooms from any of the Casino-Hotel Defendants or co-conspirators in Atlantic City since June 28, 2018. The amended complaint named nine hotel operators (the Casino-Hotel Defendants) and a software provider, Cendyn Group LLC. The plaintiffs claimed the hotels used Cendyn’s software products, GuestREV and GroupREV, to optimize room pricing through individualized recommendations. These products were originally developed by The Rainmaker Group, later acquired by Cendyn, and recently incorporated a price comparison tool called REVCaster, which uses publicly available prices from competing hotels.

The plaintiffs alleged a hub-and-spoke conspiracy similar to the Gibson case. Cendyn’s Rainmaker products were the “hub,” the individual Casino-Hotels were the “spokes,” and the supposed “rim” was an alleged agreement among the hotels to fix room prices by sharing nonpublic pricing and occupancy data with the Rainmaker software.

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