Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Supreme Court denies certiorari in two antitrust cases, (Apr 21, 2026)

By Peter Reap, J.D., LL.M.

The cases involved issues of class certification and under what circumstances certain agreements that employ algorithmic pricing tools are appropriate for rule-of-reason analysis.

The U.S. Supreme Court declined to take up issues of class certification and algorithmic pricing by denying certiorari on April 20, 2026 in two antitrust cases. In the first case, eight banks accused of violating Section 1 of the Sherman Act by conspiring to set interests rates on variable rate demand obligations (VRDOs) sought review of a Second Circuit decision finding that the plaintiff VRDO issuers satisfied the predominance requirement and granting certification. In the second case, consumers who purchased hotel rooms on the Las Vegas Strip sought review of a Ninth Circuit decision holding that agreements for pricing recommendations, without mandatory adherence, do not restrain trade in the relevant market and therefore fall outside Section 1 of the Sherman Act (Banc of America Securities LLC v. City of Philadelphia, No. 25-639 (U.S. Dec. 1, 2025)) and (Gibson v. Cendyn Group, LLC, No. 25-1109 (U.S. March 11, 2026)).

Class certification issue. In this case, issuers of VRDOs filed suit in 2019 alleging that eight banks—which “together serve as [remarketing agents (RMAs)] for the vast majority of the VRDO market”—“actively conspired not to compete against each other in the market for remarketing services,” in violation of Section 1 of the Sherman Antitrust Act and state laws. Plaintiffs contended they were therefore forced by the conspiracy into making billions of dollars in extra interest payments on bonds from 2008 to 2016.

In 2023, the district court found that the issuers satisfied the predominance requirement of Rule 23(b)(3) and granted a motion to certify a nationwide class composed of “all persons and entities who directly paid interest expenses on VRDOs that had interest rates reset on a weekly or daily basis pursuant to remarketing agreements with Defendants at any point from February 1, 2008, through November 30, 2015.” A contract sub-class was also certified. The banks appealed.

The Second Circuit affirmed. It held that the district court properly proceeded to determine predominance in two stages, first determining that the issuers’ proffered expert testimony was admissible under Daubert, and then examining both sets of expert reports to conclude that common issues of law and fact predominated at trial. The district court’s analysis of predominance was sufficiently rigorous and it was not required, as the banks essentially contended, to resolve the disputes between the parties dueling expert reports at the class certification stage, the Second Circuit held.

The question presented for review by the petitioners was whether a district court must resolve expert disputes bearing on the predominance requirement before certifying a class. The petitioners argued that the Second Circuit misread precedent in ruling that a district court need not resolve such disputes but that “a district court can only deny certification based on the persuasiveness of the expert evidence if ‘no reasonable juror could have believed’ the expert evidence.”

The petitioners argued that the Second Circuit’s decision flouted more than a decade of the Supreme Court’s jurisprudence on Rule 23, under which the Court has held that a district court must consider all probative evidence, including a defendant’s expert evidence, before determining whether the plaintiffs have satisfied their burden to prove each Rule 23 requirement, including predominance. Thus, a district court cannot certify a class after finding only that a plaintiff’s expert evidence could be believed by a reasonable juror. If that were the law, the petitioners argued, any plaintiff could obtain class certification just by hiring a competent expert.

The petitioners said that the case warranted review because the question presented is recurring and important, as class certification often depends on competing expert evidence. Further, the decision to certify a class has a substantial and often outcome-determinative effect on a putative class action, given the potential of class certification to increase the defendant’s potential damages to an extent that the defendant may find it economically prudent to settle, even when the defendant has a meritorious defense.

Algorithmic pricing case. Here, several major Las Vegas Strip casino-hotels used a shared algorithmic pricing platform supplied by Cendyn Group, formerly known as Rainmaker. The software collects market data, including competitors’ pricing, and generates recommended room rates that can be automatically implemented through integration with hotel systems. The hotel consumers’ complaint asserted that widespread adoption of the platform led competing hotels to replace independent pricing decisions with a common algorithmic framework, resulting in higher room prices.

The software’s features include automated price uploads and controls on deviations through “override permissions,” which the filing characterizes as creating a functional pricing default rather than a purely advisory tool. The petitioners contended that this structure produced coordinated pricing effects without the need for a traditional horizontal agreement among competitors. Instead, each hotel entered into separate licensing agreements with the same vendor, which they alleged served as the mechanism for aligning pricing behavior across the market.

The district court dismissed the complaint with prejudice, concluding that the plaintiffs failed to allege a “restraint of trade” because the software did not require hotels to follow its recommendations. The court emphasized that hotels retained discretion to reject suggested prices and that the complaint itself acknowledged instances in which recommendations were not adopted.

The Ninth Circuit affirmed, characterizing the contracts as ordinary commercial agreements that did not limit each hotel’s independent ability to set prices. It also rejected the plaintiffs’ attempt to aggregate separate licensing agreements into a single coordinated scheme after they abandoned a hub-and-spoke conspiracy theory on appeal.

The petition argued that the Ninth Circuit’s approach conflicts with longstanding Supreme Court precedent recognizing that nearly all commercial agreements restrain trade to some degree and must be evaluated based on their competitive effects. It contended that the lower courts improperly converted the concept of “restraint” into a threshold requirement that excludes agreements lacking explicit commands. Under that framework, agreements that influence conduct through defaults, incentives, or structural mechanisms would evade scrutiny.

The petition asserted that the case was a clean vehicle for resolving a discrete legal issue: whether agreements involving algorithmic pricing tools are categorically exempt from rule-of-reason analysis absent explicit pricing mandates. Here, the only remaining claim was a rule-of-reason challenge to written licensing agreements, with no overlapping theories of conspiracy or per se liability. The petition concluded that Supreme Court review is warranted to clarify the proper framework for evaluating modern commercial arrangements that rely on algorithmic decision-making systems and to ensure that Section 1 remains capable of addressing evolving forms of coordination in competitive markets.

Attorneys: Robert D. Wick (Covington &Burling LLP) for Banc of America Securities LLC. Steve W. Berman (Hagens Berman Sobol Shapiro LLP) for Richard Gibson. Melissa Arbus Sherry (Latham & Watkins LLP) for Cendyn Group, LLC.

Companies: Banc of America Securities LLC; Merrill Lynch, Pierce, Fenner & Smith Inc.; J.P. Morgan Securities LLC; Barclays Capital Inc.; Citigroup Global Markets Inc.; Morgan Stanley & Co. LLP; RBC Capital Markets, LLC; Wells Fargo Bank, N.A.; Wachovia Bank, N.A.; Wells Fargo Securities LLC; Cendyn Group, LLC

News: Antitrust GCNNews