SmileDirectClub files lawsuit against California Dental Board after raids, investigation

SmileDirectClub Inc. shares tumbled another 9% on Thursday, after the company filed a lawsuit against the California Dental Board and individual members, claiming that they attempted to intimidate its staff and customers in raids on SmileShops across the state. The suit, filed on behalf of Dr. Jeffrey Sulitzer, D.M.D., and his practice, along with the teeth-straightening startup, is seeking damages suffered in what the suit calls a "campaign of harassment, intimidation, and anti-competitive conduct." It alleges that Joseph Tippins, investigator in the enforcement unit of the Dental Board, disclosed an active investigation of SmileDirect in 2017. The company, which went public in September, did not disclose raids or investigations in its IPO documents. SmileDirect did not immediately respond to a request for comment. The suit comes days after California Gov. Gavin Newsom signed a law that changes the rules on 'teledentistry," the model used by SmileDirect. Shares have fallen 50% in the past month, while the S&P 500 has fallen 0.3%.

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