In a major twist to a high-stakes rent-fixing saga, a Washington federal judge has granted preliminary approval to FPI Management Inc.’s $2.8 million settlement, closing a chapter in a sprawling class action that accused the property management firm and others of conspiring to inflate residential rents through Yardi Systems Inc.’s software.

U.S. District Judge Robert S. Lasnik approved the proposed order on Thursday, certifying a nationwide settlement class that includes anyone who leased multifamily housing from landlords using Yardi’s RENTmaximizer or Revenue IQ software since September 2019.

Court Finds the Deal ‘Fair, Reasonable, and Adequate’

Judge Lasnik said the deal appeared to have been negotiated “at arm’s length” and was “within the range of possible approval.” He noted that the settlement met federal standards under Rule 23 for fairness and adequacy.

In his order, Lasnik wrote that the proposed agreement “raises no obvious reasons to doubt its fairness” and is “in the best interests of the class.”

The judge appointed Hagens Berman Sobol Shapiro LLP as lead counsel for the class. The settlement comes without an admission of wrongdoing by FPI, which has agreed to cooperate with plaintiffs pursuing ongoing claims against other defendants.

Allegations of Algorithmic Collusion

Lead plaintiff Wylie Duffy filed the original suit in 2023, which was later consolidated with two related cases earlier this year. Plaintiffs claim Yardi’s tools acted as a hub for landlords to coordinate rent prices, creating an “invisible handshake” across the rental market.

The court previously denied dismissal motions, rejecting landlords’ claims that they acted independently. Judge Lasnik countered that the only reason companies would share internal rent data with Yardi was to participate in coordinated pricing efforts.

The case falls under a growing wave of algorithmic price-fixing lawsuits, where software providers are accused of enabling covert industry-wide collusion.

Regulators Crack Down on Pricing Algorithms

The U.S. Department of Justice ramped up scrutiny in August 2024, filing a rental price-fixing suit against RealPage Inc., alleging its software allowed landlords to use aggregated data to artificially raise prices.

Meanwhile, Greystar Management Services LLC, the nation’s largest residential landlord, reached a cooperation deal with the DOJ this summer over similar allegations.

Yardi, for its part, is fighting the claims head-on, even allowing early access to its source code in state and federal court to prove its systems don’t facilitate collusion.

Yardi Scores a Win — For Now

In a recent victory, California Superior Court Judge Michael M. Markman granted Yardi summary judgment, calling source code analysis “critical” to determining whether clients actually used the software to fix rents.

He found no evidence of explicit data-sharing agreements among landlords and ruled that simply licensing Yardi’s tools isn’t proof of conspiracy.

Still, Hagens Berman’s Steve W. Berman said the plaintiffs aren’t deterred by Yardi’s state court success.
“We’ve marshalled evidence that will overcome any concerns raised in that ruling,” Berman said Friday.

Next Steps: Fairness Hearing Ahead

The FPI $3M Deal now heads toward a fairness hearing, where the court will decide whether to grant final approval.

FPI Management is represented by Charles H. Samel of Stoel Rives LLP. Plaintiffs are represented by Steve W. Berman, Theodore Wojcik, Stephanie Verdoia, Xiaoyi Fan, and Rio Pierce of Hagens Berman Sobol Shapiro LLP.

Yardi Systems is represented by Claire Martirosian and Richard W. Redmond of McNaul Ebel Nawrot & Helgren PLLC, along with Debevoise & Plimpton LLP’s Maura Monaghan, Michael Schaper, Abraham Tabaie, and David Sarratt.