Invisalign Maker Reaches $27.5 Million Settlement in Consumer Antitrust Lawsuit

Align Technology, the maker of Invisalign clear dental aligners, has agreed to pay $27.5 million to settle a lawsuit alleging it engaged in an illegal antitrust conspiracy that raised prices on aligners made by rival SmileDirectClub .

The settlement would cover nearly 1.45 million purchasers of SmileDirectClub aligners between October 22, 2017 and August 18, 2022. Align will also provide each class member with a $300 coupon for Invisalign treatment.

A preliminary settlement of the proposed class action was filed late Thursday in federal court in San Francisco and requires the approval of U.S. District Judge Vince Chhabria.

Align denied wrongdoing but decided to avoid the cost and distraction of litigation, court documents show.

The case arose out of an alleged 2016 agreement between Align and SmileDirectClub, which had been formed two years earlier, to “carve out” the market for clear dental aligners.

Align sold its aligners through dental offices, while SmileDirectClub sold its aligners directly to consumers.

The plaintiffs said Align violated federal Sherman 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 closed last December, less 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 the SmileDirectClub aligners offered.

The law firm said it plans to seek legal fees of up to $6.875 million plus 25 percent of the value of the refunded coupons, with total fees capped at $8.25 million.

Align is headquartered in San Jose, California. He did not immediately respond to requests for comment Friday.

The case is Snow v Align Technology Inc, US District Court, Northern District of California, No. 21-03269.

(Reporting by Stempel in New York; Editing by Jonathan Oatis)