Snow v. Align Technology, Inc.

Background

The plaintiffs brought federal and state antitrust challenges against Align Technology, Inc., the manufacturer of Invisalign-brand clear dental aligners. Align moved to dismiss the complaint and moved to strike certain allegations. The court addressed the remaining issues in this supplemental order; an accompanying ruling addressed other issues raised by the motions.

Federal antitrust claims

The plaintiffs sought injunctive relief under Section 2 of the Sherman Act. Align argued that the named plaintiff Emily Vo lacked Article III standing, meaning a sufficient personal stake, to seek prospective relief. The court rejected that argument. Vo bought Invisalign for one child in July 2019 and alleged that she intended to buy Invisalign aligners in the future for another child. The court held that this alleged future purchase was sufficient to plead an imminent threat of future harm if Align’s alleged conduct continued without an injunction.

Align also argued that allegations concerning the direct-to-consumer market and Align’s agreements with SmileDirectClub undermined the plausibility of the Section 2 claim. The court rejected that argument and held that imprecise terminology in the complaint did not warrant dismissal. The order also states that the plaintiffs’ Section 1 claim survived the motion to dismiss.

State-law claims

The accompanying ruling dismissed the plaintiffs’ California Cartwright Act claim for failure to plausibly allege concerted action. The plaintiffs conceded that their New York and Tennessee claims rose or fell with the Cartwright Act claim. The court therefore dismissed the New York and Tennessee claims.

The court explained that unilateral conduct could support a claim under California’s Unfair Competition Law, or UCL, because violations of the Sherman Act can qualify as unlawful business practices. But it dismissed the UCL claim because the named California plaintiff, Cindy Ellis, bought Invisalign in July 2017, before Align terminated its interoperability agreement, and because the agreement with SmileDirectClub could not support an antitrust action concerning the dentist-directed market.

The court dismissed the Iowa Competition Law claim for the same reason: named plaintiff Marjorie Sandner bought Invisalign in June 2017.

The court rejected Align’s argument that it lacked subject-matter jurisdiction over the Arizona class because Align is a citizen of Arizona. Because the federal Sherman Act claims survived, the court held that the lack of diversity did not prevent supplemental jurisdiction over the Arizona class’s state-law claims.

The court denied dismissal of the Florida claim under the Florida Deceptive and Unfair Trade Practices Act. It held that the plaintiffs had provided enough detail about the alleged unfair business practices to satisfy the heightened pleading standard Align invoked.

The state-law claims that remained were those under the laws of Arizona, Connecticut, Florida, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, Nevada, North Carolina, and Oregon.

Motion to strike and disposition

The court denied Align’s motion to strike in its entirety. It held that allegations about the Align-SmileDirectClub agreement were relevant to the surviving Section 1 claim, that allegations about the scanner market supported the claims concerning the dentist-directed aligner market, and that the remaining requests were moot because they concerned dismissed claims.

The order states that the motion to dismiss was granted in part and denied in part. The dismissed claims were dismissed with leave to amend, and any amended complaint had to be filed within 14 days. The order further states that dismissal of the Cartwright Act claim and related state-law claims was without prejudice to seeking permission to add those claims later if discovery provided a basis for doing so. Judge Vince Chhabria signed the order on February 16, 2022.