Litigation Coverage: RealPage, Landlords Seek Dismissal of New Jersey’s Algorithmic Rent-Fixing Suit

Relevant Document:
Joint Motion to Dismiss

On July 29, RealPage Inc. and other landlord defendants jointly moved to dismiss the New Jersey attorney general’s lawsuit, which alleges that the defendants participated in algorithmic pricing schemes that harmed renters in the state in violation of federal and state antitrust laws. The defendants argue that the state’s suit, filed in April in New Jersey federal court, is the “latest in a series of baseless lawsuits” alleging that the landlords colluded to raise residential rents using RealPage’s revenue management software, or RMS, and agreed to exchange competitively sensitive information in violation of the federal and state antitrust laws.

Defendants Russo Property Management, AION Management, AvalonBay, Cammeby’s Management Co. and the Kamson Corp. filed separate motions to dismiss the state’s suit.

In the motion to dismiss, RealPage and the landlords argue that the plaintiffs’ claims under the Sherman Act fail because the complaint does not “plausibly allege any agreement among Customer Defendants at all or any agreement with RealPage other than the agreement to license its software.” The complaint does not plausibly allege that customer defendants agreed among themselves to set prices or exchange information via RealPage RMS and the plaintiffs “lack direct evidence” of such an agreement, the defendants maintain.

The defendants also argue that the plaintiffs fail to allege that customers agreed with RealPage to adopt its pricing recommendations. The plaintiffs “do not, because they cannot, allege that any license between RealPage and a Customer Defendant requires accepting any prices” recommended by RealPage RMS, the motion says.

The plaintiffs’ claim under the New Jersey Antitrust Act fails for the same reasons as the Sherman Act claims, the defendants claim.

The alleged violations of the New Jersey Consumer Fraud Act, or NJCFA, also fail, the defendants argue. “Plaintiffs try to bootstrap their antitrust claims into consumer fraud claims” by arguing that the defendants’ alleged antitrust violations also violate the NJCFA, the defendants say. However, the plaintiffs’ failure to plausibly allege their antitrust claims “dooms” this count against the defendants, according to the motion.

RealPage faces several other lawsuits related to algorithmic price-fixing, including federal class-action cases centralized in a multidistrict litigation, or MDL, in the the Middle District of Tennessee. In January, the Department of Justice and 10 states filed an amended complaint against RealPage and six large landlords with similar allegations and in May opposed RealPage’s motion to dismiss the complaint. Arizona, Washington, D.C., and Washington state have also filed complaints against the company.