LAS VEGAS (KLAS) — Lawyers intend to refile a lawsuit that alleges price fixing at Las Vegas Strip hotels after a judge granted a motion to dismiss the case this week because it lacks specific information and never proves the existence of an agreement.
“We are confident we can amend to address the court’s concerns, Steve Berman, managing partner and attorney leading the case, said on Thursday. Hagens Berman will file its amended complaint no later than Nov. 23, 2023, a statement from the law firm said.
The lawsuit was originally filed Jan. 26, 2023, seeking class-action damages from MGM Resorts International and Caesars Entertainment, along with Treasure Island and Wynn Resorts. It alleged that the resorts’ use of software from Georgia-based Rainmaker to set prices constituted price fixing, and that supply and demand was disregarded. Customers paid higher prices because Rainmaker’s algorithm created a market that wasn’t competitive, lawyers argued.
Rainmaker’s algorithms “are specifically intended to raise profits for Hotel Operators while discouraging them from maximizing occupancy of hotel rooms (i.e., supply),” according to the lawsuit.
Miranda Du, Chief U.S. District Court Judge for the District of Nevada, left open a 30-day window for lawyers to refile the lawsuit after they said “many additional facts” will be presented from investigations since the lawsuit was filed. A different legal strategy could try to prove that the resorts have switched to a product marketed as “GuestRev” by the same company — Cendyn — that owned Rainmaker. Statements in marketing materials are at issue.
“This could support a rule of reason theory, as the press release tends to evidence vertical agreements, and thus supports granting Plaintiffs leave to amend to allege their alternative rule of reason theory more explicitly,” the court’s decision said. See the court’s ruling here.
The new approach comes after the judge said lawyers failed to show all the companies were using the same system and that the rates of one hotel would be shared with another. The lawsuit didn’t show how the Rainmaker algorithm shared that information between hotels — only that employees claimed hotels shared the information.
The court said plaintiffs “must allege something more than conduct merely consistent with agreement in order to ‘nudge their claims across the line from conceivable to plausible.’ “
The original lawsuit alleged collusion between the hotels because they shared their room rates. An algorithm was used to set prices.
MGM Resorts International called the initial lawsuit “factually inaccurate.” 8 News Now has reached out for comment regarding the new development, but we haven’t received a reply.