USA – GEORGIA Trends and Developments Contributed by: Lohr Beck and Kasey Clark, King & Spalding LLP
a nationwide “hub-and-spoke” conspiracy to fix and raise rental prices for multi-family housing in violation of Section 1 of the Sherman Act, with Yardi acting as the hub and the landlords as the spokes. (See gen - erally First Amended Class Action Complaint, Shew- maker et al. v Yardi Systems Inc. et al., No. 4:24-cv- 00085-CDL (M.D. Ga. 9 October 2024) .) Specifically, the plaintiffs alleged that landlords used Yardi’s RENTmaximizer software, which collected confidential rental pricing and occupancy data from its users. Yardi’s software, in turn, allegedly leveraged the landlords’ data to generate automated rent recom - mendations that were designed to maximise revenue by fixing prices among competitors. (Id.) Landlords were alleged to have then uniformly adopted the algo - rithmically calculated prices that RENTmaximizer rec - ommended, allowing the landlords to increase their rental prices while de-prioritising competitive market measures like maintaining traditional occupancy rates. (Id. at 51.) After the plaintiffs filed their amended complaint, the plaintiffs from a previously filed parallel class action in the Western District of Washington, Duffy et al. v Yardi Sys., Inc. , filed a motion to intervene to seek dismissal or transfer of the Shewmaker action, and the Shewmaker plaintiffs voluntarily dismissed their amended complaint before the court ruled on that motion. (See generally Dkt. Nos. 277, 285, Shew- maker , No. 4:24-cv-00085-CDL (M.D. Ga.).) The
Shewmaker plaintiffs subsequently refiled their com - plaint in the Western District of Washington, where the Shewmaker and Duffy cases were consolidated under the caption Duffy et al. v Yardi Sys., Inc., No. 2:23-cv-01391-RSL (W.D. Wa.) . Phased discovery is now underway in the consolidated action, with phase one consisting of discovery related to the functions of Yardi’s revenue management software and phase two discovery, if necessary, to concentrate on the landlord defendants’ use of that software. Conclusion Unless the Georgia General Assembly unexpectedly creates a new framework of state antitrust laws, it should be expected that the federal courts in Geor - gia will continue presiding over the lion’s share of the state’s antitrust cases, with federal antitrust law being the focus of those cases. Only time will tell whether the cases that have recently been filed in Georgia’s federal courts and transferred to an MDL for consolidated pretrial proceedings will return to the state for trial, but no matter their final destination, the authors expect the outcomes of those cases to have far-reaching implications for the country’s developing legal stand - ards governing algorithmic pricing and market domi - nance in newly emerging virtual markets. Those legal standards could, in turn, transform industry practices and decide the acceptable balance between techno - logical innovation and fair competition.
312 CHAMBERS.COM
Powered by FlippingBook