Las Vegas resorts defeat hotel rate price-fixing class action in US appeal

By Mike Scarcella

Aug 15 (Reuters) - Wynn Resorts WYNN.O, Caesars and Treasure Island convinced a U.S. appeals court on Friday to turn back a consumer class action lawsuit accusing them of using shared computer software algorithms to illegally coordinate on Las Vegas hotel room prices.

Affirming a lower court decision, a three-judge panel of the San Francisco-based 9th U.S. Circuit Court of Appeals said it wasn't enough for the consumers to show that the rival resorts used the same revenue-management service provider amid an alleged rise in room rental rates.

The plaintiffs had accused the resort companies of colluding to overcharge guests by feeding sensitive internal information to a shared software platform operated by Cendyn that offered pricing recommendations. They appealed after a judge in Nevada dismissed the lawsuit in May.

The 9th Circuit panel said the consumers had not shown there was any agreement among the hotels to follow Cendyn’s pricing recommendations. The court also said that hotels’ independent use of the same software did not restrain their abilities to rent hotel rooms.

“Rather than eliminating competition, pricing one’s hotel rooms in a manner calculated to maximize profits is how one competes,” wrote Circuit Judge Carlos Bea, joined by Circuit Judge Ana de Alba and U.S. District Court Judge Jeffrey Brown.

A lead attorney for the consumers did not immediately respond to a request for comment, and neither did the lawyer who argued for the defendants.

Cendyn said it welcomed the court's order. Wynn declined to comment. Caesars and Treasure Island did not immediately respond to requests for comment.

The hotels and software provider Cendyn have denied any wrongdoing.

U.S. courts are facing an increasing number of lawsuits claiming hotels and other industries unlawfully use revenue maximization platforms to fix prices.

Last October, a group of major casino-hotel operators in Atlantic City defeated a proposed consumer class action accusing them and a revenue management platform of overcharging for room rentals.

In dismissing the lawsuit in Las Vegas, Chief U.S. District Judge Miranda Du said the system generated pricing recommendations that hotels were not bound to follow.

The consumers in their appeal countered that even non-binding guidelines such as price recommendations can be considered an “unreasonable” restraint within a competitive market.

The case is Richard Gibson et al v. Cendyn Group et al, 9th U.S. Circuit Court of Appeals, No. 24-3576.

For plaintiffs: Steve Berman of Hagens Berman Sobol Shapiro

For defendants: Melissa Sherry of Latham & Watkins

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