A Recent SDNY Decision Sets Up A First Amendment Test For Personalized Pricing Laws

Arecent decision from the Southern District of New York signals that personalized pricing (often called surveillance pricing) laws face First Amendment headwinds. The case is RealPage, Inc. v. James, Case No. 25-cv-09847.

On September 29, Judge Valerie Caproni preliminarily enjoined a provision of New York’s new rent-setting law. The provision made it unlawful for landlords to set rents based on recommendations from software performing a “coordinating function.” The plaintiff, a software vendor providing those recommendations, challenged the law.

While this case looks like it’s about a niche rent regulation dispute, it’s also about algorithmically driven pricing recommendations. The plaintiff’s software analyzes data and recommends rents, i.e., prices, to landlords setting those rents. The court held that these recommendations are commercial speech, even though software generates them, and that the plaintiff is likely to show the provision fails the intermediate scrutiny that