Ciccio v. SmileDirectClub, LLC

Ciccio v. SmileDirectClub, LLC

Opinion

MEMORANDUM

Defendants SmileDirectClub, LLC ("SmileDirect"), Camelot Venture Group ("CVG"), Alexander Fenkell, David Katzman, Steven Katzman, and Jeffrey Sulitzer have filed a Motion to Dismiss the Plaintiff Orthodontists' Claims (Docket No. 68), to which the plaintiffs have filed a Response (Docket No. 80), and the defendants have filed a Reply (Docket No. 83). The defendants [*2]  have also filed a Motion to Strike Certain Allegations (Docket No. 70), to which the plaintiffs have filed a Response (Docket No. 81), and the defendants have filed a Reply (Docket No. 84). Finally, the plaintiffs, including two previously voluntarily dismissed plaintiffs, have filed a Motion to Rejoin Plaintiffs, or in the Alternative, to Intervene (Docket No. 85), to which the defendants have filed a Response (Docket No. 87), the movants have filed a Reply (Docket No. 89), and the defendants have filed a Surreply (Docket No. 93). For the reasons set out herein, the defendants' motions will be denied and the plaintiffs' motion will be granted, with the qualification that it does not effect the binding nature of the court's Order of December 2, 2019 (Docket No. 58).

I. BACKGROUND¹

SmileDirect is a Nashville-based Delaware corporation that sells "plastic aligners" for orthodontic use. (Docket No. 36 ¶¶ 2.b, 2.d, 42.) SmileDirect markets its "SmileDirect Program," built around the aligners and teledentistry, as an alternative to conventional orthodontic care. The rise of SmileDirect in the dental marketplace has drawn a substantial amount of attention—including a number of regulatory complaints—from, [*3]  among others, dentists and orthodontists who consider SmileDirect to be an inferior alternative to established methods of treating orthodontic problems. (Id. ¶¶ 2, 6, 78.) For example, the American Dental Association ("ADA") filed a complaint with the Federal Trade Commission alleging that SmileDirect has made "numerous false and misleading claims . . . to fraudulently entice customers to purchase its products and services." (Id. ¶ 2.c.) The ADA and its state affiliates have also filed complaints with the Food and Drug Administration and with state licensing authorities. (Id. ¶¶ 2.a-.b.) SmileDirect maintains that the onslaught of complaints and litigation that it has faced has been the result of a self-interested desire, on the part of conventional dentists and orthodontists, to protect themselves from competition.

The initial Complaint in this case was filed by a SmileDirect customer, Dena Nigohosian, and three orthodontists, Dr. Joseph Ciccio, Dr. Arthur Kapit, and Dr. Vishu Raj.² (Docket No. 1 ¶¶ 13-16.) It pleaded eight counts under various common law and statutory theories of false advertising, consumer protection, and fraud. (Id. ¶¶ 118-92.) The plaintiffs named as defendants [*4]  SmileDirect, SmileDirect shareholder CVG, and SmileDirect executives David and Steven Katzman. (Id. ¶¶ 18-20.) On October 25, 2019, the defendants filed several motions: a Motion to Dismiss directed at all claims against CVG and the Katzmans (Docket No. 24); a Motion to Dismiss directed at the orthodontist plaintiffs' claims against SmileDirect (Docket No. 29); a Motion to Compel Arbitration by Nigohosian (Docket No. 27); and a Motion for Rule 11 Sanctions against all plaintiffs and their attorneys (Docket No. 31).

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.