Invisalign maker agrees to pay $31 million in consumer price-fixing settlement

By Mike Scarcella

April 25 (Reuters) - Align Technology ALGN.O, maker of Invisalign clear teeth aligners, has agreed to pay $31.7 million to resolve a U.S. consumer lawsuit accusing the company of entering a conspiracy that drove up prices at rival SmileDirectClub.

A group of consumers filed the proposed class action settlement on Thursday in federal court in San Francisco. The deal requires approval by U.S. District Judge Vince Chhabria.

The lawsuit, filed in 2021, alleged Align conspired with rival SmileDirectClub to not enter the direct-to-consumer market for teeth aligners, allowing SmileDirectClub to charge artificially higher prices.

Chhabria has twice rejected earlier proposed settlements in the lawsuit, most recently in February. The judge had said then that a provision of the settlement providing $300 coupons for consumers to buy Invisalign products would only strengthen its position as an alleged illegal monopolist.

Thursday’s renewed proposal is all cash and does not contain a coupon component, the consumers’ lawyers told Chhabria. They also said the settlement amount was higher than the plaintiffs were prepared to settle for during prior negotiations.

Align Technology and lawyers for the plaintiffs did not immediately respond to requests for comment.

Align has denied any wrongdoing. SmileDirectClub was not a defendant.

There are about 230,000 members of the class — and potentially 1.4 million overall — who purchased aligners from SmileDirectClub, the plaintiffs lawyers told the court.

SmileDirectClub shut down in December 2023, after filing for U.S. bankruptcy protection.

The plaintiffs said the settlement fund was about 17% of an estimated $181 million in damages for the class. They said the percentage was comparable with other settlements in antitrust cases that won approval in the Northern California federal court.

The consumers' lawyers said they would seek up to about $8 million, or 25% of the settlement fund, for legal fees. The attorneys said they had devoted more than 9,500 hours to the litigation so far.

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

For plaintiffs: Steve Berman and Rio Pierce of Hagens Berman Sobol Shapiro

For Align: Karma Giulianelli and Mark Levine of Bartlit Beck, and James Pearl and Thomas Counts of Paul Hastings

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