Invisalign maker reaches $27.5 million settlement of consumer antitrust lawsuit

SmileDirectClub

30/08/2024 15:49

By Jonathan Stempel
       Aug 30 (Reuters) - Align Technology  ALGN.O , the maker
of Invisalign clear teeth aligners, agreed to pay $27.5 million
to settle a lawsuit claiming it entered an illegal antitrust
conspiracy that drove up prices of aligners made by rival
SmileDirectClub.
    The settlement would cover nearly 1.45 million purchasers of
SmileDirectClub aligners between Oct. 22, 2017, and Aug. 18,
2022. Align would also offer each class member a $300 coupon for
Invisalign treatment.
    A preliminary settlement of the proposed class action was
filed on Thursday night in federal court in San Francisco, and
requires approval by U.S. District Judge Vince Chhabria.
    Align denied wrongdoing but settled to avoid the cost and
distraction of litigation, court papers show.
    The case arose from an alleged 2016 agreement between Align
and SmileDirectClub, which had been founded two years earlier,
to "allocate" the market for clear teeth aligners.
    Align had been selling its aligners through dental offices,
while SmileDirectClub sold its aligners directly to consumers.
    The plaintiffs said Align violated the Sherman federal
antitrust law by agreeing not to enter the direct-to-consumer
market, freeing SmileDirectClub to charge more, in exchange for
a minority stake in SmileDirectClub and a share of its profits.
    SmileDirectClub shut down last December, fewer than three
months after filing for Chapter 11 bankruptcy protection.
    Hagens Berman Sobol Shapiro, the plaintiffs' law firm, said
the settlement will improve treatment for patients affected by
SmileDirectClub's closure, or who want more comprehensive teeth
straightening than SmileDirectClub's aligners provided.
    The law firm said it plans to seek legal fees of up to
$6.875 million plus 25% of the value of reimbursed coupons, with
total fees capped at $8.25 million.
    Align is based in San Jose, California. It did not
immediately respond on Friday to requests for comment.
    The case is Snow v Align Technology Inc, U.S. District
Court, Northern District of California, No. 21-03269. 

 (Reporting by Jonathan Stempel in New York; editing by Jonathan
Oatis)
 ((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters
Messaging: jon.stempel.thomsonreuters.com@reuters.net))