US Judge Blocks Settlement in Align Technology Antitrust Lawsuit

A U.S. federal judge has declined to approve a proposed $27.5 million class-action settlement in a lawsuit accusing Align Technology, the maker of Invisalign clear aligners, of engaging in anticompetitive practices. According to Law360, the case centers on allegations that Align conspired with SmileDirectClub to suppress competition and artificially inflate prices.

In a ruling issued on Thursday, U.S. District Judge Vince Chhabria of San Francisco raised concerns about a key provision of the settlement that would provide consumers with coupons to purchase Invisalign products. Per Law360, the judge argued that such a measure would only serve to reinforce Align’s alleged monopolistic position in the market.

“It’s not clear that such a settlement would ever be appropriate in an antitrust class action against a monopolist,” Chhabria stated in his ruling.

The lawsuit, filed in 2021, alleged that Align and SmileDirectClub had an agreement preventing Align from entering the direct-to-consumer market, enabling SmileDirectClub to maintain higher prices for its own aligners. While Align has denied any wrongdoing, SmileDirectClub was not named as a defendant in the case. The company later filed for U.S. bankruptcy protection and ceased operations in December 2023.

This is the second time Judge Chhabria has rejected a proposed settlement in the case. Per Law360, he suggested that both parties could attempt to present a revised agreement for approval. His concerns were primarily directed at the proposed coupon program, which would provide class members with a $300 credit toward Invisalign treatment and $50 toward an Align Technology retainer.

“The defendant in this antitrust case is a monopolist,” Chhabria wrote. “The proposed settlement includes a coupon program that will direct still more customers to the monopolist.”

Plaintiffs’ attorneys have defended the coupon provision, while Align argued in court filings that the program would have minimal impact on sales and would not significantly affect competition within the industry.

A hearing to discuss the status of the case has been scheduled for April 18.

The case is Snow v. Align Technology Inc., U.S. District Court, Northern District of California, No. 3:21-cv-03269-VC.

Source: Law360