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Weber v. Align Technology

June 2, 2010

DEBRA A. WEBER, ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
ALIGN TECHNOLOGY, INC.; ORTHOCLEAR, INC.; AND ORTHOCLEAR HOLDINGS, INC., D/B/A, ORTHOCLEAR, INC., DEFENDANTS.



The opinion of the court was delivered by: Hon. Glenn T. Suddaby, United States District Judge

MEMORANDUM DECISION and ORDER

Currently before the Court in this breach-of-contract action filed by Debra A. Weber ("Plaintiff") on behalf of herself and all others similarly situated are the following motions: (1) a motion to certify the class filed by Plaintiff (Dkt. No. 26); (2) a motion for partial summary judgment filed by Align Technology, Inc. ("Defendant Align") (Dkt. No. 21); and (3) a motion to dismiss for failure to state a claim filed by Defendant OrthoClear Inc. ("OrthoClear") (Dkt. No. 55).*fn1 For the reasons set forth below, the Court denies Plaintiff's motion to certify the class without prejudice and with leave to renew upon the completion of further discovery regarding the issue of certification; the Court grants Defendant Align's motion for partial summary judgment; and the Court denies Defendant OrthoClear's motion to dismiss for failure to state a claim.

I. RELEVANT BACKGROUND

A. Plaintiff's Claims

Construed with the utmost of liberality, Plaintiff's Amended Complaint asserts the following three causes of action against Defendant OrthoClear (and Holdings), and/or Defendant Align (collectively "Defendants") arising from an interruption in her orthodontic treatment by use of clear, removable appliances: (1) a cause of action for breach of contract against Defendant OrthoClear; (2) a cause of action for breach of third-party contract against Defendant OrthoClear; (3) a cause of action for breach of third-party contract against Defendant Align; and (4) two causes of action for fraudulent conveyance against Defendant OrthoClear. (See generally Dkt. No. 46 [Plf.'s Am. Compl.].) Familiarity with the particular factual allegations supporting these causes of action in Plaintiff's Amended Complaint is assumed in this Decision and Order, which is intended primarily for review by the parties.

B. Undisputed Material Facts

Generally, the undisputed material facts of this case are as follows.*fn2 Before October 12, 2006, Defendants were competing manufacturers of clear, removable orthodontic appliances. On October 12, 2006, Defendants, among other parties, entered into a global Settlement Agreement and Mutual Releases ("Settlement Agreement"). Paragraph 4(c) of the Settlement Agreement provides that "Align will make treatment using removable dental aligners available for all OrthoClear patient cases existing as of September 27, 2006 in the United States, Canada, and Hong Kong, at no charge from Align to the patient, the doctor, or OrthoClear." Other than Paragraph 4, the Settlement Agreement contains no other provisions that purport to provide any benefits to Defendant OrthoClear's patients. In addition, Paragraph 9 of the Settlement Agreement provides that it "constitute[s] the entire agreement between the Parties with respect to the subject matter hereof, and cancel[s] and supercede[s] all prior and contemporaneous agreements, understandings, negotiations and discussions of the Parties[.]"

On or about October 28, 2006, Defendant Align launched the "Patients First Program," pursuant to which an alternative orthodontic treatment program involving removable appliances--called "Invisalign"--was made available to dentists for former patients of Defendant OrthoClear, at no charge to the dentists or patients. On October 30, 2006, Plaintiff's orthodontist registered Plaintiff's case under the Patients First Program. On January 17, 2007, Defendant Align received the materials from Plaintiff's orthodontist as required for her treatment under the Patient's First Program. All of the aligners necessary to complete Plaintiff's treatment were shipped to her orthodontist on May 7, 2007, and were received by Plaintiff on or about May 14, 2007. Defendant Align has not sought or received any funds from Plaintiff for her Invisalign treatment.

Familiarity with the remaining undisputed material facts of this action, as well as the disputed material facts, as set forth in the parties' Rule 7.1 Statement, Rule 7.1 Response, and Rule 7.1 Reply is assumed in this Decision and Order, which (again) is intended primarily for review by the parties.

C. Defendant Align's Motion for Partial Summary Judgment

Generally, in support of its motion for partial summary judgment, Defendant Align argues as follows: (1) the Settlement Agreement entered into between Defendant Align and Defendant OrthoClear unambiguously provides only that Defendant Align promised to make treatment available at no charge to Defendant OrthoClear's customers existing as of September 27, 2006; and (2) because it did in fact make treatment available at no charge to those customers--including Plaintiff--Defendant Align is not liable for breach of third-party contract. (See generally Dkt. No. 21, Attach. 13 [Def. Align's Memo. of Law].)

In response to Defendant Align's motion for partial summary judgment, Plaintiff argues as follows: (1) Defendant Align failed to fulfill its obligation to provide Plaintiff "treatment" under the terms of the Settlement Agreement; and (2) she is entitled to conduct discovery before summary judgment is granted against her with regard to her causes of action against Defendant Ailgn. (See generally Dkt. No. 24 [Plf.'s Reply Memo. of Law].)

In its reply, Defendant Align argues as follows: (1) in opposing Defendant Align's motion for partial summary judgment, Plaintiff is attempting to re-write Defendants' Settlement Agreement, which is unambiguous; (2) Plaintiff's expert's explanation of industry "standards" does not apply to Defendant Align, or to Plaintiff's case; (3) Defendant Align made Invisalign Treatment available in a manner consistent with Plaintiff's expert's definition of "treatment"; (4) Plaintiff cannot rely on extrinsic evidence to alter the terms of the Settlement Agreement; and (5) affording Plaintiff the opportunity to conduct discovery in this action is unnecessary, because Plaintiff's case would not be aided by discovery. (See generally Dkt. No. 28, Attach. 3 [Def. Align's Reply Memo. of Law].)

D. Defendant OrthoClear's Motion to Dismiss for Failure to State a Claim

Generally, in support of its motion to dismiss for failure to state a claim, Defendant OrthoClear argues as follows: (1) the Amended Complaint against Defendant OrthoClear fails to state a claim upon which relief may be granted for breach of contract because Plaintiff does not and cannot allege compensable damages; and (2) the Amended Complaint against Defendant OrthoClear must be dismissed because Plaintiff lacks standing as a creditor to pursue her two fraudulent-conveyance claims. (See generally Dkt. No. 55, Attach. 1 [Def. OrthoClear's Memo. of Law].)

In response to Defendant OrthoClear's motion to dismiss for failure to state a claim, Plaintiff argues as follows: (1) the Amended Complaint states a claim for relief because, inter alia, it alleges that Defendant OrthoClear "contracted to do something, failed to do it, and that Plaintiff and the putative class members . . . were damaged as a result";*fn3 and (2) Defendant OrthoClear's motion to dismiss Plaintiff's fraudulent conveyances claims must be denied. (See generally Dkt. No. 56 [Plf.'s Response Memo. of Law].)

In its reply, Defendant OrthoClear generally repeats its arguments made in its initial memorandum of law. (See generally Dkt. No. 58 [Def. OrthoClear's Reply Memo. of Law].)

II. RELEVANT LEGAL STANDARDS

A. Legal Standard Governing Motions for Summary Judgment

Because the parties to this action have demonstrated, in their memoranda of law, an accurate understanding of the legal standard governing motions for summary judgment, the Court will not recite that well-known legal standard in this Decision and Order, but will direct the reader to the Court's recent decision in Pitts v. Onondaga County Sheriff's Dep't, 04-CV-0828, 2009 WL 3165551, at *2-3 (N.D.N.Y. Sept. 29, 2009) (Suddaby, J.), which accurately recites that legal standard.

B. Legal Standard Governing Motions to Dismiss for Failure to State a Claim

For the sake of brevity, the Court will not recite, in this Decision and Order, the well-known legal standard governing dismissals for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6), but will direct the reader to the Court's recent decision in Wade v. Tiffin Motorhomes, Inc.,05-CV-1458, 2009 WL 3629674, at *3-5 (N.D.N.Y. Oct. 27, 2009) (Suddaby, J.).

C. Legal Standards Governing Plaintiff's Claims

Again, because the parties to this action have demonstrated, in their memoranda of law, an accurate understanding of the relevant points of law contained in the legal standards governing Plaintiff's claims in this action, the Court will not recite, in their entirety, those legal standards in this Decision and Order, which (again) is intended primarily for review by the parties, but will instead recite relevant legal standards in its analysis only when necessary. (See Dkt. No. 21, Attach.13 [Def. Align's Memo. of Law]; Dkt. No. 24 [Plf.'s Response Memo. of Law]; Dkt. No. 28, Attach. 3 [Def. Align's Reply Memo. of ...


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