Kirkland litigators including newly-confirmed Ninth Circuit Judge Daniel Bress racked up second win on Tuesday, this one on behalf of client Henkel KGaA before the U.S. Court of Appeals for the Sixth Circuit.

The billion-dollar claim against Kirkland's client stemmed from failed negotiations over a potential distribution agreement.

Private equity investment firm Knight Capital Partners approached Henkel's U.S. subsidiary Henkel Corp. about partnering to market and distribute a new cleaning product for use in the oil and gas extraction and refinery maintenance sectors. An “extraordinarily lucrative business venture,” Knight Capital's lawyers from Kickham Hanley claimed. 

The two parties entered into a non-disclosure agreement to exchange information and perhaps strike a deal. After a year of back-and-forth, it didn't happen.

But Knight Capital in a suit filed in 2016 in the Eastern District of Michigan claimed that Henkel Corp. parent company Henkel KGaA breached the disclosure agreement to access to the technology for itself “and thus, commandeer all profits from the venture.”

And here's where the theory gets creative: “In doing so, Henkel KGaA tortiously interfered with [Knight Capital's] prospective business relationship with Henkel KGaA's U.S. affiliate, Henkel Corporation.”

Nice try, but no. 

The district court dismissed the case on summary judgment, and the Sixth Circuit agreed, siding with Kirkland partner Atif Khawaja, who handled the oral argument, and Bress, who was on the brief.  

For starters, “Henkel KGaA cannot be sued for breach of the NDA because Henkel KGaA was not a party to that contract,” wrote Judge Bernice Bouie Donald for the unanimous panel. 

As for the tortious interference? “Henkel KGaA is Henkel Corporation's parent company. Therefore, Henkel KGaA cannot have tortiously interfered with Henkel Corporation's relationship with KCP as a matter of law,” the appellate court held.

Knight Capital tried arguing that Henkel KGaA wasn't really the parent company.

“The evidence clearly shows otherwise,” the panel found. 

The Sixth Circuit judges also rejected Knight Capital's argument that Henkel's parent company was not immunized from a tortious interference claim because it acted with an improper motive or means.

“It is well-settled under Michigan law,” the panel held, “that a desire to maximize one's own business interests is a legitimate reason to interfere with one's wholly-owned subsidiary's business expectancy; in other words, it would not have been improper for Henkel KGaA to have nixed the distribution deal even if its sole motivation was to maximize its own profits.”