SmileDirectClub Sues NBC for News Reports -- WSJ

By Benjamin Mullin 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (May 19, 2020).

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."

NBC News said, "We stand by our reporting and believe this is a meritless claim."

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 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 company went public in September at $23 a share. On Monday, the stock closed at $6.76.

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 [e-mail]

(END) Dow Jones Newswires

May 19, 2020 02:47 ET (06:47 GMT)

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