Ciccio v. SmileDirectClub, LLC
| Decision Date | 21 March 2022 |
| Docket Number | 3:19-cv-00845 |
| Court | U.S. District Court — Middle District of Tennessee |
| Parties | DR. JOSEPH CICCIO et al., Plaintiffs, v. SMILEDIRECTCLUB, LLC et al., Defendants. |
The defendants have filed a Motion to Dismiss Certain of Plaintiffs' Claims on the Pleadings (Doc. No. 256), to which the plaintiffs have filed a Response (Doc. No. 267) and the defendants have filed a Reply (Doc. No. 278). The plaintiffs have filed a Motion for Leave to Amend the Complaint (Doc. No. 311), to which the defendants have filed a Response (Doc. No. 314), and the plaintiffs have filed a Reply (Doc. No. 315). For the reasons set out herein, both motions will be denied.
The court has written several opinions in this case already and will not belabor the details here, m short, SmileDirectClub LLC ("SmileDirect") is a company that sells plastic aligners for orthodontic use. SmileDirect and a number of affiliated companies and individuals were sued by a group of consumers and orthodontists, who alleged that SmileDirect had engaged in various types of wrongdoing in order to deceive consumers into viewing SmileDirect's products and services as a suitable alternative to traditional orthodontic treatment, which they were not. The consumer plaintiffs are no longer active plaintiffs in the case, leaving only the orthodontists and their practices.
On December 13, 2019, the defendants filed a Motion to Dismiss the Plaintiff Orthodontists' Claims. (Doc. No. 68.) On June 2, 2020, the court denied that motion. (Doc. No. 95.) Despite having had that initial opportunity to challenge the sufficiency of the orthodontist plaintiffs' pleading, the defendants now seek to dispute the adequacy of that pleading again, albeit in a relatively limited way. Specifically, the defendants seek judgment on the pleadings with regard to any claims based, in whole or in part, on allegations that SmileDirect improperly marketed itself as in compliance with federal regulations governing dental devices. In the defendants' briefing, they acknowledge that the reason for this oddly-timed request is that the defendants seek to narrow the scope of discovery, which, as the record makes readily apparent, has been fought bitterly and relentlessly by both the plaintiffs and defendants in this case.[2] (See Doc. No. 257 at 1-2.)
The defendants' motion is directed at the plaintiffs' claims based on allegations set forth in Section H of the Second Amended Complaint (hereinafter, "SAC"). (Doc. No. 246 ¶¶ 128-41.) That relatively short section-which does not itself set forth claims, but rather pleads facts in support of the claims stated more expressly elsewhere in the SAC-describes SmileDirect's past dealings with the Food and Drug Administration ("FDA") and its alleged violations of state dental licensing laws. The plaintiffs allege that "[a]t no time has SmileDirect informed consumers that it is in violation of the [Food, Drugs, and Cosmetics Act ('FDCA')] and illegally practicing dentistry" and that "[b]oth of these nondisclosures are highly material and highly fraudulent because consumers would be reluctant to use SmileDirect's aligners in any capacity if they knew that they were being sold in violation of both federal and state law." (Id. ¶¶ 130-31.) With regard to the FDA, the plaintiffs specifically allege that, "[a]s a manufacturer of its aligners, SmileDirect was legally obligated to seek FDA clearance for such product, "[3] but that it has instead opted to "flout these legal requirements and is selling its product, which should be labeled and sold only by prescription, in an essentially over-the-counter fashion." (Id. ¶ 136.) The plaintiffs explain, however, that they are not merely alleging that SmileDirect is in technical noncompliance with federal laws governing medical devices; rather, they allege that SmileDirect's practice of "deliberately hiding" the regulatory status of its products from consumers has affected consumer decisions in SmileDirect's favor. (Id. ¶ 140.) That "attempt to profit at the expense of customers and at the expense of traditional orthodontics," the plaintiffs allege, "is negligent, fraudulent, deceptive, and a violation of the Lanham Act," as well as the Tennessee Consumer Protection Act ("TCPA"). (Id. ¶¶ 141, 212.) The defendants argue that the court should dismiss any such claims because "only the Food and Drug Administration can enforce the FDCA." (Doc. No. 256 at 1.) The defendants also argue that the allegations related to dental licensing are legally insufficient, although those allegations pose no particular issue involving the FDA. (Id.)
Also pending before the court is a request by the plaintiffs for leave to amend their SAC to add a claim for class damages under the TCP A, a statute under which they had already pleaded claims, but only for injunctive relief on behalf of the class and damages on behalf of individual plaintiffs. (Doc. No. 246 ¶¶ 214-15.) The plaintiffs characterize this proposed amendment as warranted based on intervening "recent case law" favorable to the inclusion of such claims. (Doc. No. 311 at 1.)
Rule 12(c) of the Federal Rules of Civil Procedure provides that "[a]fter the pleadings are closed-but early enough not to delay trial-a party may move for judgment on the pleadings." Fed.R.Civ.P. 12(c). Rule 12(c) motions for judgment on the pleadings and Rule 12(b)(6) motions to dismiss are evaluated under the same standard of review. Fritz v. Charter Twp. of Comstock, 592 F.3d 718, 722 (6th Cir. 2010). For either, the court must "construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff." Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007); Inge v. Rock Fin. Corp., 281 F.3d 613, 619 (6th Cir. 2002).The Federal Rules of Civil Procedure require only that the plaintiff provide "a short and plain statement of the claim that will give the defendant fair notice of what the plaintiffs claim is and the grounds upon which it rests." Conley v. Gibson, 355 U.S. 41, 47 (1957). The court must determine only whether "the claimant is entitled to offer evidence to support the claims," not whether the plaintiff can ultimately prove the facts alleged. Swierkiewicz v. SoremaN.A., 534 U.S. 506, 511 (2002) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).
The complaint's allegations, however, "must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The plaintiff cannot rely on "legal conclusions" or "[t]hreadbare recitals of the elements of a cause of action," but, instead, the plaintiff must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). "[O]nly a complaint that states a plausible claim for relief survives a motion to dismiss." Id. at 679; Twombly, 550 U.S. at 556.
Rule 15(a)(2) of the Federal Rules of Civil Procedure states that leave to amend should be freely given "when justice so requires." In deciding whether to grant a motion to amend, courts consider factors including undue delay in filing, lack of notice to the opposing party, bad faith by the moving party, repeated failure to cure deficiencies by previous amendments, undue prejudice to the opposing party, and futility of amendment. Brumbalough v. Came lot Care Ctrs., Inc., 427 F.3d 996, 1001 (6th Cir. 2005).
In addition, however, the Sixth Circuit has recognized that a motion for leave to amend filed after the deadline for such motions has expired "implicates" Rule 16 of the Federal Rules of Civil Procedure, in addition to Rule 15. Carrizo (Utica) LLC v. City of Girard, 661 Fed.Appx. 364, 367 (6th Cir. 2016) (quoting Leary v. Daeschner, 349 F.3d 888, 904 (6th Cir. 2003)). Under Rule 16, a scheduling order "must limit the time to . . . amend the pleadings," and the schedule may only be modified "for good cause and with the judge's consent." Fed.R.Civ.P. 16(b)(3)(A), (b)(4). Thus, "notwithstanding Rule 15's directive freely to give leave to amend, a party seeking leave to amend after the scheduling order's deadline must meet Rule 16's good-cause standard in order for the district court to amend the scheduling order." Carrizo, 661 Fed.Appx. at 367 (citing Leary, 349 F.3d at 909). Inge v. Rock Fin. Corp., 281 F.3d 613, 625 (6th Cir. 2002) (internal citations omitted).
As a preliminary matter, the plaintiffs argue that the court should not even consider the defendants' argument for judgment on the pleadings, because doing so would violate the "law of the case" doctrine. As the plaintiffs acknowledge, "[district courts have authority both under common law and Rule 54(b) to reconsider interlocutory orders and to reopen any part of a case before entry of final judgment." Rodriguez v. Tenn. Laborers Health & Welfare Fund, 89 Fed.Appx. 949, 959 (6th Cir. 2004) (citing Mallory v. Eyrich, 922 F.2d 1273, 1282 (6th Cir. 1991)); see also In re Life Investors Ins. Co. of Am., 589 F.3d 319, 326 n.6 (6th Cir. 2009) () (citing Rodriguez, 89 Fed.Appx. at 959; Mallory, 922...
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