Cornish-Adebiyi v. Caesars Entertainment, No. 24-3006, is a proposed antitrust class action alleging that competing Atlantic City casino-hotels used a shared pricing algorithm to raise room rates above competitive levels. The U.S. Court of Appeals for the Third Circuit reversed the case's dismissal on July 29, 2026, holding that the district court had given "inadequate consideration" to the allegations, and allowing the claims against Caesars Entertainment, MGM Resorts International, Hard Rock International, the entities behind five Atlantic City casino-hotels, and pricing-software vendor Cendyn Group to proceed (Source: news.bloomberglaw.com; nj.com).
The ruling is the first federal appellate decision to let an algorithmic-pricing collusion theory past the pleading stage in the hotel sector, and it splits from the Ninth Circuit, which had upheld dismissal of a parallel Las Vegas suit against the same vendor.
Background
The named plaintiffs — Karen Cornish-Adebiyi, Luis Santiago and Monica Blair-Smith — allege that each defendant hotel supplied current, non-public room pricing and occupancy data to Cendyn Group's Rainmaker program, which processed the pooled data and generated recommended rates that the hotels adopted about 90% of the time. The theory is that of a common data algorithm: no defendant communicated directly with another, but each fed proprietary data into a shared system and acted on its outputs.
The complaint's market evidence is drawn from state figures: combined occupancy at the properties fell about 8% between 2017 and 2019 while room revenue rose roughly 22%, and in 2022 the properties rented 5% fewer rooms at 25% higher prices than in 2019 (Source: nj.com).
Procedural history
District Judge Karen M. Williams dismissed the case in 2024. Plaintiffs appealed to the Third Circuit, which heard the matter as No. 24-3006 and reversed on July 29, 2026 in a unanimous panel opinion written by Judge Theodore McKee. McKee wrote that the dismissal gave "inadequate consideration" to the allegations given "the complexity and novelty of dynamic pricing algorithms," and the opinion states that "AI software can facilitate collusion by enabling competitors to coordinate prices and share information without ever communicating with each other" (Source: economicliberties.us).
The panel decided no merits question, and cautioned that plaintiffs "will face a higher burden to sustain their claims" as the case proceeds (Source: insideaipolicy.com).
Circuit split
The decision diverges from the Ninth Circuit, which upheld dismissal of a parallel action against Cendyn brought over Las Vegas hotel pricing. The Supreme Court declined to review that ruling in April 2026, leaving the two appellate readings of the same vendor's software in conflict (Source: insideaipolicy.com).
The divide concerns what a plaintiff must plead when the coordinating mechanism is software rather than a meeting: whether feeding proprietary data into a common system and adopting its outputs at a high rate can itself support an inference of agreement, or whether more direct evidence of a shared commitment is required.
Current status
Active. Reversed and remanded to the District of New Jersey as of July 29, 2026; no merits ruling has issued.
Reactions
The American Economic Liberties Project, which characterized the ruling as "a warning shot against market-rigging tech," is the source of the quoted passages from the opinion circulating in coverage (Source: economicliberties.us).
Relationships
- instance-of: Algorithmic Pricing and Antitrust — the common-data-algorithm theory at the pleading stage
- contradicts: Algorithmic Pricing and Antitrust — the Third Circuit's reading conflicts with the Ninth Circuit's disposition of the parallel Las Vegas action
- related: AI Liability — vendor liability where the software rather than the user performs the coordination