Some interesting news from the legal word recently. On April 25th, Aligln Technology, the parent company of Invisalign, has agreed to a $31.7 million settlement in a class action lawsuit from consumers. The settlement deal still requires approval by US District Court Judge Vince Chhabria.
The suit alleged that Align conspired with the now bankrupt Smile Direct Club. The alleged deal was that Align would not enter the direct to consumer market. The suit alleges that this allowed SDC to charge higher fees to consumers. Basically if Align did not compete with SDC, then SDC could charge consumers more for their product. SDC was not part of the lawsuit... probably because the company declared bankruptcy and is out of business which means they couldn't pay a dime.
The suit is on behalf of 230,000 consumers which means that the amount received would be about $103 per consumer. However, it's also noted that the class could potentially be 1.4 million consumers. I have NO idea how they will determine the number. If the suit is settled with the high number of consumers, that would mean each would receive about $17 each. For those of you math minded readers who do the calculation, that doesn't seem to be correct. The reason for that is the attorneys are requesting $8 million in fees for their work on the suit. That would bring the amount down to $23.7 million.
Personally, I have no stake in this, but it seems like a lot to go through for roughly a payout of somewhere between $100 to $20 each for the consumers.
Never mind the fact that even without competition, SDC went bankrupt and they burned through cash like a lit match in a gasoline factory. It was one of the most incredible flameouts in the history of the dental industry.
So now we move on to the twist in this story. Last week I was made aware of a lawsuit filed by Smile Direct Club against Align. According to what I've seen, "the history of this case is that SDC was an operating business that was driven to bankruptcy".
This is where it gets interesting. I'm trying to wrap my head around how, if the agreement was that Align would not compete with SDC... how exactly was SDC "driven into bankruptcy"? One of these lawsuits doesn't make sense. Either Align drove them out of business or Align conspired with SDC to not compete and therefor made SDC potentially more profitable.
I'm not an attorney and I don't pretend to know how all of this works in the legal world. However, it seems that only one of these claims is true. So I'll be following all of this with a bit of interest. As I learn more, I'll try and update the story.
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