SmileDirectClub Sues NBC Over News Report, Seeking $2.85 Billion--Update
May 18 2020 - 4:37PM
Dow Jones News
By Benjamin Mullin
Teledentistry company SmileDirectClub Inc. sued Comcast Corp.'s
NBCUniversal, seeking nearly $3 billion in damages for what it
alleges were defamatory news reports about the company's treatment
methods.
The suit, filed Monday in a Tennessee court, focuses on a Feb.
13 "NBC Nightly News" segment that described complaints by some
SmileDirectClub customers and warnings about teledentistry from an
orthodontics professor. The lawsuit also says that an online
article accompanying the segment is inaccurate.
SmileDirectClub's complaint claims that the reports from NBC
News contained numerous errors involving the safety and
effectiveness of its products, and that the network knew its
stories about SmileDirectClub were untruthful.
"NBC must be held accountable for its abuse of power and
betrayal of trust," SmileDirectClub said in its lawsuit. "Viewers
and readers across the country turn to the media for the
information they need to make decisions about their health and
well-being."
NBCUniversal didn't have an immediate comment.
SmileDirectClub, a Nashville-based company with hundreds of
retail locations around the world, sells clear aligners meant to
straighten patients' teeth without requiring frequent visits to
orthodontists' offices. Patients use those aligners at home and
check in with dentists and orthodontists affiliated with
SmileDirectClub, using the company's online platform. The company
also says the affiliated providers can refer patients to in-person
dental and orthodontic care.
SmileDirectClub, which went public in September, said its market
capitalization fell by more than $950 million after the report was
aired and that prospective customers canceled their treatments. Its
market capitalization currently stands at about $2.63 billion.
The stories at issue contain testimonials from SmileDirectClub
patients who complained of pain after receiving treatment by the
company. In one instance, NBC News reported, a patient said that
her orthodontist diagnosed her with a crossbite "possibly caused
by" SmileDirectClub's dental aligners. In another case, a patient
said that his dentist claimed the aligners "moved his teeth so fast
that it caused some of them to detach from the bone," according to
NBC News' reports.
SmileDirectClub said in the suit, which is seeking $2.85 billion
in damages, that the patients fabricated claims that the company's
treatment caused them physical problems to "retaliate against
[SmileDirectClub]."
SmileDirectClub attorney J. Erik Connolly was one of the lead
attorneys for Beef Products Inc. in its 2012 lawsuit against Walt
Disney Co.'s ABC News. That lawsuit sought $1.9 billion in damages
in connection with the network's reports on a textured beef product
that critics dubbed "pink slime," one of the largest defamation
cases to go to trial in U.S. history.
The case was settled in June 2017. Disney disclosed in August
2017 that it paid a net sum of $177 million after insurance
recoveries in connection with a settlement but didn't name the
plaintiff.
Write to Benjamin Mullin at Benjamin.Mullin@wsj.com
(END) Dow Jones Newswires
May 18, 2020 16:22 ET (20:22 GMT)
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