Align Technology $16M Class Action Settlement with Investors
The maker of Invisalign teeth braces, Align Technology, has agreed to pay investors $16 million to resolve charges that it has misled investors about impending commercial issues.
Xiaojiao Lu v. Align Technology, Inc., et al.
After two negotiation sessions, Align Technology Inc. and the plaintiffs submitted preliminary approval of the Invisalign Stock Settlement in a San Jose federal court on Friday.
Investors sued Align for the first time in 2018, claiming that the company misled them about the increased competition it faced when patents on parts of its technologies expired.
In addition, the investors reported that share prices afterward fell approximately $59 due to news of a hidden discount promotion affecting the prices of Align’s products.
The complaint was dismissed twice since then and re-filed with changes.
In their Friday motion, the plaintiffs urged the court to approve the Invisalign Stock Settlement, claiming they would face significant difficulties in litigation.
According to the motion, defendants would have actively contested the lead plaintiff’s capacity to establish loss causation and damages, increasing the risk of summary judgment and trial.
These risks posed a genuine threat to the settlement class’s compensation.
Align Technology, Inc. Stock Settlement, 2021
According to the motion, the settlement would be dispersed proportionately to those who purchased Align shares throughout the class period and sustained losses that qualify for recovery.
Counsel for the plaintiffs intends to seek no greater than 20% of the settlement, depending on the amount of time given on the case. In addition, the lead counsel worked on the subject for approximately 4,375 hours.
Align Technology faces various new class-action lawsuits from consumers due to this settlement involving investors.
Plaintiffs contend in a May class-action lawsuit that the company allegedly overcharges consumers due to its market strength.
Consumers believe Align has controlled at least 80% of the braces industry for several decades through its extensive patent holdings and legal approach toward potential competitors. However, when the patents expired in 2017, plaintiffs allege that Align engaged in anticompetitive behavior to preserve its strong position.
A class-action lawsuit filed in 2019 argued that the corporation knew that having a monopoly on intraoral scanners would compel dental practices to use the corresponding brand of dental aligners, causing them to increase prices, thus maintain control over the industry unfairly.
Editor’s Note on Invisalign Stock Settlement 2021:
This article is written to inform you of the settlement with Align Technology over its investors.
Case Name & No.: Xiaojiao Lu v. Align Technology, Inc., et al., Case No. 5:18-cv-06720
Jurisdiction: The U.S. District Court for the Northern District of California
Products/Services: Securities/Commodities (SEC)
Allegations: Align Technology allegedly claimed that the downfall of its shares is because of the increased competition, whereas it went down by nearly $59 due to news of a hidden discount promotion
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