By Katie Abajian
On October 16, 2019, SmileDirectClub, and its owner, Jeffrey Sulitzer, D.M.D., a dentist licensed to practice in California, filed a complaint in the Central District of California against an investigator, the Executive Officer, and all individual Board members of the Dental Board of California alleging violations of the Federal Sherman Antitrust Act, several Constitutional violations, including the Dormant Commerce Clause, the Equal Protection Clause, and Substantive Due Process, as well as California’s Unfair Competition Law. (Jeffrey Sulitzer, D.M.D, et al. v. Joseph Tippins et al., Case No. 2:19CV08902 (C. D. Cal.)).
SmileDirect describes itself as a revolutionary approach to help reduce cost and increase access to orthodontic services that threaten to disrupt the more traditional dental industry. Customers can access services through mail correspondence or by visiting one of SmileDirect’s “SMILESHOP” stores or “SmileBus,” where clients can get photos taken of their teeth and gums and fill out dental and health histories which are then reviewed online by a Treating Dentist who will prescribe the patient treatment. According to the complaint, SMILESHOP stores or SmileBuses have taken information from over 100,000 consumers in California, and tens of thousands have been approved for treatment.
The complaint alleges that Board investigators have attempted to “harass and intimidate” SmileDirect in order to “squelch the competition” posed by SmileDirect services. It alleges that Board investigators first requested information regarding specific dentists and patient records, but upon finding no wrongdoing, began state-wide raids of SMILESHOPs in Oakland, San Francisco, and Hollywood, California. The complaint alleges that the raids were so aggressive that they frightened and intimidated employees, and consumers fled the stores, causing serious harm to SmileDirect’s “business, revenue, goodwill, employee relations, and market reputation.” Further, SmileDirect argues the SmileBus employees were not engaging in the practice of dentistry as defined in the Dental Practice Act and were not required to have any certification or registration. According to SmileDirect, the Dental Practice Act, which authorizes the Board to regulate the Practice of Dentistry, does not cover services provided by SmileDirect because the Act does not give the Board authority to regulate non-clinical support services such as those provided in the SMILESHOPS and SmileBuses.
SmileDirect generally alleges that the Board members’ and investigator’s actions impact the dental market by restricting consumers’ access and options to affordable orthodontic treatment and stifle competition in order to protect the interests of traditional dentists such as those regulated by the Board. With respect to the constitutional claims, Plaintiffs allege that the alleged conduct affects interstate commerce because SmileDirect is an out-of-state company that is being discriminated against in the California market by shielding California providers from competition and that California dentists prescribe clear aligner therapy treatment using products that are sold across state lines and produced outside of California, and thus interstate commerce is interrupted when the Board restricts such sales. Additionally, they allege that the Board members and its investigators violated substantive due process in that SmileDirect was not given an opportunity to be heard on these issues. SmileDirect seeks injunctive relief as well as actual, direct, incidental and consequential damages.
On December 23, 2019, the Board and all Defendants filed a motion to dismiss. A hearing on the motion is scheduled for March 2, 2020.