Simon and Simon, PC v. Align Technology, Inc.

Filing 203

Discovery Order re: 170 Joint Discovery Letter BriefRegarding Discovery Requests Seeking Aspects of Plaintiffs' Financial Information filed by Align Technology, Inc. Signed by Judge Thomas S. Hixson on 11/18/2022. (tshlc1, COURT STAFF) (Filed on 11/18/2022)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SIMON AND SIMON, PC, et al.,
Plaintiffs,

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United States District Court
Northern District of California

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Case No. 20-cv-03754-VC (TSH)
DISCOVERY ORDER

v.

Re: Dkt. No. 170
ALIGN TECHNOLOGY, INC.,
Defendant.

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Align moves to compel responses to three requests for production (“RFPs”) directed to the

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named Plaintiffs in this action, Simon and Simon, PC d/b/a City Smiles and VIP Dental SPAs.

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ECF No. 170. The RFPs seek the following:

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RFP 4: Documents sufficient to show Your profits, losses, expenses, and revenue

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since 2015, including Documents sufficient to show the sources of Your profits and

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revenue, and recipients or causes of Your expenses and losses.

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RFP 5: Documents sufficient to show and describe Your accounting practices for

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sales, profit margin, costs or expenses, and revenue.

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RFP 6: Documents Identifying Your budgets and forecasts on a quarterly and

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annual basis since 2015, including all analyses comparing and contrasting to actual

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results and explanations related to variances between actual versus

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budgeted/forecast amounts.

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Align does not argue that these RFPs seek discovery that is relevant to any claim or

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defense in this case. Rather, Align contends that these RFPs seek documents that are relevant to

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allegations in paragraphs 59, 62, 64 and 65 in the operative Complaint. Align also says that this

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discovery is relevant to whether the named Plaintiffs are typical of the proposed class.

As to typicality, Align does not explain how the requested financial information would

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demonstrate that the named Plaintiffs are or are not typical of the proposed class. The RFPs are

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not directed to subjects associated with typicality, such as whether the Plaintiffs purchased the

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products at issue, or whether they paid any alleged overcharge. The Court supposes that this

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information might be contained within some of the requested documents. But Align is also asking

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for overall financial information, and the Court does not see why it matters for typicality how

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profitable the Plaintiffs’ dental practices have been, how much they pay in rent and salary and so

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on, or how good their budget forecasting is. This discovery is not proportional to the needs of the

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case.

United States District Court
Northern District of California

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As for Align’s contention that the requested documents are relevant to allegations in four

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paragraphs of the Complaint, that argument does not have any merit because discovery must be

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relevant to a claim or defense. Fed. R. Civ. Proc. 26(b)(1). And Align does not explain what

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claim or defense the requested financial information is relevant to.

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Further, even if discovery were allowed into allegations, rather than claims or defenses, the

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Court is skeptical that this discovery would show anything meaningful. Let’s look at the

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paragraphs in the Complaint that Align cites. Paragraph 59 alleges: “A Dental Practice that

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incurred these penalties would be at a substantial disadvantage to other Dental Practices that

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avoided these penalties. Given Align’s dominant position in the market for Aligners, Dental

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Practices who wanted to offer Aligner treatment could not forego Invisalign orders entirely.”

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Paragraph 62 alleges: “The structure of the Advantage Program is such that Dental Practices must

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maintain a very high prescribing level of Invisalign in order to keep the prices that would allow

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their practice to offer competitive prices to patients.” Paragraph 64 alleges: “One practical effect

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of the Advantage Program is that for Dental Practices to obtain the pricing for Invisalign necessary

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to offer Invisalign at competitive rates, those Dental Practices would, for all practical purposes,

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need to purchase a Scanner.” And paragraph 65 alleges: “Another practical effect of the

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Advantage Program is that Dental Practices would have a strong incentive to forego competing

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Aligners at least until it was clear that the practice had achieved the minimum number of

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Invisalign orders necessary to maintain its prices.”
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United States District Court
Northern District of California

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These are broad allegations about the effects of the alleged conduct on “[t]ens of thousands

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of Dental Practices [that] have purchased Invisalign Aligners and iTero Scanners directly from

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Defendant during the Class Period.” Am. Compl., ¶ 88 (emphasis added). These allegations

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cannot be proven true or false by looking at the finances of two dental practices. These allegations

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can only be proven or disproven with industry-wide data. A deep dive into the finances of the

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dental practices that happen to be the named Plaintiffs in this case is too random to yield useful

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information. Further, all four paragraphs that Align cites concern allegations about actions that

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dental practices allegedly need to take to remain competitive against each other, and the Court

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simply does not see how the finances of these two dental practices would shed any light on the

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subject. And even if there is some slight relevance to these RFPs, the discovery is not

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proportional to the needs of the case.

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Align’s motion to compel is denied.

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IT IS SO ORDERED.

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Dated: November 18, 2022

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THOMAS S. HIXSON
United States Magistrate Judge

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