08/26/22 | CASE UPDATE
Judge Denies Align’s Motion to Join SmileDirectClub as Necessary Party
Judge Vince Chhabria denied Align’s motion to join as a defendant alleged co-conspirator SmileDirectClub, a maker of direct-to-consumer (“DTC”) clear aligners. Align had previously argued that SmileDirectClub – who Plaintiffs allege conspired with Align to monopolize the market for DTC aligners – was a “necessary party” to the case. Earlier this year, Judge Chhabria also denied Align’s motion to dismiss Plaintiffs’ claim against Align under Section 1 of the Sherman Act, finding that Plaintiffs plausibly alleged a scheme whereby Align agreed not to compete with SDC in the lucrative DTC aligner market in exchange for a 17% share in SDC.
The ruling leaves Plaintiffs free to pursue their claims against Align under Section 1 and 2 of the Sherman Act, as well as numerous other state antitrust law, for illegally raising the prices of aligners sold to consumers – both those sold though dentists and through the DTC channel.
Did you purchase SmileDirectClub Aligners without the benefit of dental insurance? You may have paid too much due to an illegal price-fixing scheme. Fill out the form to find out your rights to potential compensation »
INVISALIGN CLASS-ACTION LAWSUIT
According to the lawsuit, Align Technology and SmileDirectClub engaged in a market allocation agreement that caused millions of U.S. consumers to pay artificially high prices for SmileDirectClub aligners. If you purchased SmileDirectClub Aligners for yourself or a family member, then you may be entitled to damages for the prices that you paid.
ABOUT THE ALLEGED INVISALIGN PRICE-FIXING SCHEME
Align Technology and SmileDirectClub, two leading manufacturers of aligners, allegedly entered into an illegal agreement in 2016 where they allocated the market for aligners. According to the lawsuit, prior to the agreements, Align had exclusively sold aligners wholesale through dental offices. Founded in 2014, SmileDirectClub pioneered the practice of selling aligners directly to consumers. According to the complaint, the two channels constituted distinct product submarkets, but SmileDirectClub posed a competitive threat to Align, especially since the first patents of Align to expire were focused in the lower end of the aligner market where SmileDirectClub had pioneered the direct-to-consumer channel.
The lawsuit states that Align Technology entered into written agreements with SmileDirectClub that it would not compete with SmileDirectClub in the distinct product market of aligners sold directly to consumers (such as SmileDirectClub aligners). In exchange, Align received a minority ownership interest in SmileDirectClub that allowed it to receive a portion of the profits that Smile Direct Club received from the market allocation agreement.
Plaintiffs allege that the agreements between SDC and Align were highly effective in stifling competition. According to the lawsuit, in 2017, Align attempted to encroach on SDC’s direct-to-consumer channel by opening its own brick and mortar stores for consumers interested in Invisaligners. In response, SDC initiated arbitration against SDC for breach of the Operating Agreement and, in 2018, obtained an award that required Align to close its existing stores; prevented Align from opening new stores; required Align to sell back to SDC its ownership interest; and extended the parties’ non-compete provisions until August 18, 2022. Thus, the plaintiffs say, the agreements foreclosed competition in the consumer product submarket.
As a result of the agreements, the lawsuit alleges, SmileDirectClub was able to charge artificially high prices for SmileDirectClub aligners, because it was freed from the threat of competition from Align.
YOUR CONSUMER RIGHTS
The lawsuit seeks reimbursement for the allegedly high prices paid by consumers as a result of Align’s anticompetitive conduct. Hagens Berman believes that consumers who unknowingly paid high prices for SmileDirectClub Aligners deserve compensation.
TOP CONSUMER RIGHTS FIRM
Hagens Berman is one of the most successful consumer-litigation law firms in the United States, achieving more than $320 billion in settlements for consumers in lawsuits against product manufacturers, food corporations, major automakers, banks and others. Your claim will be handled by experts in national consumer rights law.
NO COST TO YOU
In no case will any class member ever be asked to pay any out-of-pocket sum. In the event Hagens Berman or any other firm obtains a settlement that provides benefits to class members, the court will decide a reasonable fee to be awarded to the class' legal team.
