SCOTT D. GALKIN, D.M.D. VS. SMILEDIRECTCLUB, LLC (C-000019-19, MIDDLESEX COUNTY AND STATEWIDE)
A-2867-19
| N.J. Super. Ct. App. Div. | Jun 11, 2021Background
- Plaintiffs Scott D. Galkin, D.M.D., and the New Jersey Dental Association sued SmileDirectClub, LLC (SDC) and dentists Danny Leeds and Isaac Perle claiming unlawful corporate practice of dentistry and unlawful direct‑to‑consumer sale/delivery of clear aligners.
- Leeds owns Smile of New Jersey, P.A. (SNJ), a professional corporation that contracts with SDC for non‑clinical management services; SNJ is owned/controlled by a licensed dentist and advertises to New Jersey patients.
- SDC supplies impression kits and sources clear aligners from an FDA‑certified manufacturer; dentists prescribe/treat patients, while SDC provides nonclinical support (marketing, billing, records, payroll).
- Plaintiffs sought injunctive relief; the trial court denied plaintiffs' summary judgment, entered a protective order, then partially sealed business agreements (Jan 27, 2020), and granted defendants' summary judgment (Mar 6, 2020) concluding SDC does not practice dentistry or control SNJ.
- Plaintiffs appealed the summary judgment and the sealing order; the Appellate Division affirmed both rulings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether SDC engaged in the unlawful corporate practice of dentistry (N.J.S.A. 45:6‑12) | SDC effectively practices dentistry and controls licensed dentists via its arrangements with SNJ | SDC provides only non‑clinical services; clinical judgment and ownership remain with licensed dentists/SNJ | Court: SDC is not practicing dentistry and does not control SNJ; no statutory violation found |
| Whether a succession agreement allows SDC to take control/ownership of SNJ | Succession clause enables SDC to install a designee and thereby circumvent ownership rules | Succession requires ownership by a New Jersey‑licensed dentist/orthodontist; safeguards preserve licensed ownership | Court: Safeguards prevent unlicensed ownership; no sham corporation or evasion shown |
| Whether SDC's marketing, sale, and delivery of aligners violates the prohibition on labs/dental technicians advertising/selling directly to the public (N.J.S.A. 45:6‑19) | SDC’s direct‑to‑consumer model and delivery of aligners constitutes unlawful practice and impermissible sale/delivery | Aligners are prescribed by licensed dentists; SDC is not a dental technician/lab and does not perform clinical operations | Court: SDC’s materials identify licensed dentists as treating clinicians; activities do not violate N.J.S.A. 45:6‑19 |
| Whether the trial court abused its discretion in sealing business agreements and redacting transcripts | Sealing improperly restricts public access to court records; motion to vacate should be granted | Public disclosure would cause competitive harm; business‑sensitive material warrants sealing under Rule 1:38‑11(b) | Court: No abuse of discretion; good cause shown—disclosure would likely cause serious competitive injury |
Key Cases Cited
- Conley v. Guerrero, 228 N.J. 339 (discussing de novo review of summary judgment)
- Templo Fuente De Vida Corp. v. Nat'l Union Fire Ins. Co., 224 N.J. 189 (summary judgment standard under Rule 4:46‑2)
- Hammock ex rel. Hammock v. Hoffmann‑LaRoche, Inc., 142 N.J. 356 (standard and discretion for sealing court records)
- Allstate Ins. Co. v. Northfield Medical Ctr., 228 N.J. 596 (distinguished — medical practice control issues)
- Allstate Ins. Co. v. Schick, 328 N.J. Super. 611 (Law Div.) (distinguished — sham corporations and factual disputes)