Feb 28 (Reuters) - A U.S. judge has declined to approve

a $27.5 million class action settlement in a consumer lawsuit

accusing Align Technology ( ALGN ), maker of Invisalign clear teeth

aligners, of entering a conspiracy that drove up a rival's

prices.

In a ruling on Thursday, U.S. District Judge Vince Chhabria

in San Francisco said a provision of the settlement providing

coupons for consumers to buy Invisalign products would only

strengthen its position as an alleged monopolist.

"It's not clear that such a settlement would ever be

appropriate in an antitrust class action against a monopolist,"

the judge wrote.

The consumer lawsuit alleged Align conspired with rival

SmileDirectClub to not enter the direct-to-consumer market for

teeth aligners, allowing SmileDirectClub to charge artificially

higher prices.

Align and lawyers for the estimated 1.4 million class

members - consumers who purchased aligners from SmileDirectClub

- did not immediately respond to requests for comment. Align has

denied any wrongdoing, and SmileDirectClub was not a defendant.

SmileDirectClub shut down in December 2023, after filing for

U.S. bankruptcy protection.

Chhabria's ruling was the second time he has denied a

proposed settlement in the lawsuit, filed in 2021. He said the

two sides can try again to persuade him to approve an

alternative settlement.

The judge said in Thursday's order that he was concerned

about a component of the agreement that would give class members

a $300 coupon for Invisalign treatment and $50 in coupons for

one of the company's teeth retainers.

"The defendant in this antitrust case is a monopolist,"

Chhabria wrote. "The proposed settlement includes a coupon

program that will direct still more customers to the

monopolist."

Lawyers for the plaintiffs have defended the coupon

provision. Align told the court this month that the coupons

would "likely have a negligible impact" on the company's sales

and will not harm competition in the aligner industry.

Chhabria set an April 18 hearing to discuss the status of

the case.

The case is Snow v Align Technology Inc ( ALGN ), U.S. District

Court, Northern District of California, No. 3:21-cv-03269-VC.

For plaintiffs: Steve Berman and Rio Pierce of Hagens Berman

Sobol Shapiro

For Align: Karma Giulianelli and Mark Levine of Bartlit

Beck, and James Pearl and Thomas Counts of Paul Hastings

Read more:

Invisalign maker reaches $27.5 million settlement of

consumer antitrust lawsuit