Henry Schein Inc. has been named in an antitrust lawsuit alleging that the Melville company conspired with two other dental product suppliers to undermine a rival that sought to organize group purchasing organizations and sell to them via its e-commerce platform.
The lawsuit, filed Monday in U.S. District Court in Central Islip by SourceOne Dental Inc., seeks unspecified compensation and triple damages. The lawsuit also seeks an order barring the trio from agreeing to pressure dental supply manufacturers and state dental associations against doing business with SourceOne, based in Chandler, Arizona.
Henry Schein did not respond to a request for comment.
The Federal Trade Commission, which oversees antitrust matters, also is investigating the three companies' conduct, the lawsuit said. A spokesman for the FTC declined to comment.
Henry Schein, a supplier to dental, veterinary and medical practitioners around the world, is Long Island's largest public company, with revenue of more than $10 billion. Schein's stock price closed down 1.11 percent Tuesday at $135.43.
Also named as defendants in the lawsuit were Patterson Cos. Inc., based in St. Paul, Minnesota, and Benco Dental Supply Co., based in Pittston, Pennsylvania.
Patterson and Benco didn't reply immediately late Tuesday to a request for comment.
The lawsuit said the defendants, which account for "approximately 90 percent of all sales in this market," have formed an "oligopoly" that charges higher prices in part by resisting dentists' efforts to form group purchasing organizations.
After SourceOne formed a group purchasing organization in 2013, the lawsuit said, the three suppliers launched a boycott of dental groups doing business with the new organization. The suit said as a result, "Thousands of dentists and scores of state dental associations, dental supplies manufacturers and dental supplies distributors" were deterred from doing business with SourceOne.
In April, a consent judgment was issued against Benco Dental in the District Court of Travis County, Texas, in connection with an alleged boycott against SourceOne. In that case, Benco did not admit guilt, but agreed to terms of an injunction not to restrain trade, and to pay $300,000 for the investigation expenses incurred by the Texas attorney general, whose office filed the lawsuit.
Christopher Renner, an attorney at Boies, Schiller & Flexner LLP, which filed the lawsuit on behalf of SourceOne, said the documents uncovered by the Texas attorney general in that case could be pivotal in the federal lawsuit.
"The Texas attorney general is certainly acting as if there is a smoking gun, and we intend to find it," he said.
Boies, Schiller chairman David Boies served as special counsel for the Department of Justice in its 1998 antitrust suit against software maker Microsoft Corp. The law firm also represented a co-owner of Woodbury-based AriZona Iced Tea in a case that in April fixed a price on the company and set the stage for a buyout by his partner.