Labor & Employment Law Daily Wrap Up, COVERAGE, LIABILITY—9th Cir.: Ninth Circuit reverses and remands a case involving false advertising and tortious interference in the athletic wear industry, (Aug 4, 2026)

By Donielle Tigay Stutland, J.D.

An agent loses his immunity when he acts at the expense of his principal but not when he acts in his principal’s interests, even though he may harbor a motive for personal gain.

The Ninth Circuit reversed and remanded a district court’s $2.5 million judgment as a matter of law on a tortious-interference claim brought by Multiple Energy Technologies, LLC (“MET”) against the CEO of its competitor Hologenix, after concluding that a corporate officer is generally immune from liability for inducing the corporation’s breach of its own contract unless the officer acted outside the scope of agency by pursuing personal benefit at the expense of the principal. The court also stressed that mere self-interest or “individual advantage” while also advancing the company’s interests does not defeat that immunity, and the district court erred by denying immunity on that basis alone. The court also reversed the district court’s Lanham Act disgorgement of the CEO’s salary after concluding that a CEO’s salary is not “defendant’s profits” under 15 U.S.C. § 1117(a) and the court found that MET failed to prove any sales by the CEO himself. The Ninth Circuit did affirm the award of attorney fees under the same statute, finding no abuse of discretion by the district in treating the jury’s determination that the false advertising was “deliberately or intentionally false” as sufficient to render the case exceptional (Multiple Energy Technologies, LLC v. Casden, No. 24-4691 (9th Cir. Jul. 30, 2026)).

Background. MET and Hologenix are competitors in the athletic wear market and both companies make a bioceramic material designed to be embedded inside textiles and reflect a person’s heat back to his body in the form of infrared energy. In 2019, MET sued Hologenix, claiming that Hologenix falsely advertised that its product Celliant had been approved by the FDA.

MET and Hologenix settled the suit and Hologenix agreed to pay MET a settlement amount of $2.5 million (in installments) and to refrain from representing that Celliant was FDA-approved or that the FDA determined that Celliant has health benefits. Before Hologenix was able to complete its installment payments, the company filed for bankruptcy.

MET then filed a suit against Hologenix’s CEO, alleging that after the settlement, Hologenix continued to represent that the FDA had determined Celliant has health benefits, in violation of the settlement agreement (representations that were alleged to have been approved or made by the CEO). MET also alleged that the CEO tortiously interfered with Hologenix’s payment obligations by voting, as a corporate officer, to put the company into bankruptcy. Following a jury trial, MET moved for judgment as a matter of law, asking the district court to conclude that the CEO engaged in tortious interference. The district court held that the CEO was not entitled to ordinary agent’s immunity under California law because he had acted for his own “individual advantage.” The court awarded MET $2.5 million on the claim of tortious interference. On the Lanham Act claim, while the jury returned a verdict in MET’s favor on its false advertising claim, the district court awarded MET disgorgement of the CEO’s salary earned from 2020 through 2023 (a total of $983,171) pursuant to its reading of 15 U.S.C. § 1117(a), which entitles a plaintiff to recover a “defendant’s profits.” The district court also awarded attorney fees. The CEO appealed.

Tortious Interference. On appeal, the CEO first challenged the district court’s judgment as a matter of law concluding that he was not entitled to immunity as an agent of Hologenix from MET’s tortious-interference claim. Under California law, “ordinarily corporate agents and employees acting for and on behalf of the corporation cannot be held liable for inducing a breach of the corporation’s contract since being in a confidential relationship to the corporation their action in this respect is privileged.” The court noted that the “agent’s immunity rule” comes from another settled rule: “there can be no action for inducement of breach of contract against the other party to the contract.”

However, “an agent’s immunity vanishes if he does not act for and on behalf of his principal when inducing the breach.” The court detailed when this would come into play; which would be when an agent “acts outside the scope of his agency such as by acting for himself at the expense of his principal.” Moreover, the court highlighted that “an agent’s immunity should not be denied merely because the agent acts to benefit himself (while also seeking to advance the principal’s interest).” The court disagreed with the district court’s conclusion that merely because the CEO acted for his “individual advantage,” he lost his status as an agent and could not claim to be immune from a tortious-interference claim.

The court also indicated that motive was not always a relevant test. The court concluded that, for purposes of assessing agency immunity, evidence of motive is relevant only to the extent that “it indicates whether or not [the principal’s] interest is actually being protected—i.e., whether the agent acted for and on behalf of his principal, or instead, outside the scope of his agency such as by acting for himself at the expense of his principal.” In order to determine whether agency immunity attaches, the court stressed that there must be an objective test: is the agent acting for and on behalf of the company, or outside the scope of his agency such as by acting for himself at the expense of the company? The court concluded that the district court failed to apply the proper test and the district court erred in denying immunity. The court reversed and remanded this claim.

Lanham Act. The court next addressed the CEO’s appeal of the district court’s grant of disgorgement of his salary for violating the Lanham Act. The district court issued an award that was purportedly based on the “defendant’s profits.” The district court treated the CEO’s salary as a proxy for the CEO’s “profits.” The court outlined that under the statute, to assess “profits,” the plaintiff “shall be required to prove defendant’s sales only” and the “defendant must prove all elements of cost or deduction claimed.” The Ninth Circuit concluded that MET failed to show that the CEO had any sales, as only Hologenix made sales. But the “defendant” in the case is not Hologenix, it is the CEO. The Ninth Circuit concluded that the district court erred in treating the CEO’s salary as his profits, and it reversed the district court’s disgorgement award.

Attorney Fees. The Ninth Circuit affirmed the award of attorney’s fees, as MET prevailed on its Lanham Act claims, which was not contested on appeal. The court noted that MET may be awarded attorney fees if the district court finds this case to be “exceptional.” A case is “considered exceptional ‘when the infringement is malicious, fraudulent, deliberate, or willful.’” Here, a jury found that he CEO’s representations concerning Celliant were “deliberately or intentionally false” in violation of the Lanham Act. The Ninth Circuit concluded that the district court did not abuse its discretion in awarding fees.

The Case is No. 24-4691.

Judge: Tung, E.

Attorneys: Nicole Sullivan (White & Williams, LLP) for Multiple Energy Technologies, LLC. Kian Tamaddoni (Benedon & Serlin, LLP) for Seth Casden.

Companies: Multiple Energy Technologies, LLC

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