Another day, another lawsuit finds its way through the courts and this time Adidas has come out on top. A group of investors attempted to argue that the company hid concerns related to its collaboration with Ye before the Yeezy partnership fell apart. The Ninth Circuit rejected the appeal and ruled that the shareholders did not prove that Adidas misled anyone about the risks tied to working with a major celebrity figure.
In its published ruling, the appellate panel stated that Adidas was not required to reveal every moment of unpredictable behavior from Ye. The judges noted that any reasonable investor understands that partnerships with high profile talent come with volatility by nature.
The decision upholds a district court ruling that dismissed the case filed by HLSA ILA Funds. The investors claimed that Adidas ignored warning signs linked to Ye and his long history of public statements before ending their partnership in 2022. They argued that they suffered losses when the company severed ties after Ye made antisemitic comments on his socials which led to a sharp decline in share value.
The Yeezy franchise had become one of Adidas most important revenue engines, bringing in billions each year. The lawsuit claimed the company publicly portrayed the partnership as secure while navigating behind the scenes challenges tied to Ye’s conduct. According to the court, the plaintiffs did not present any clear misrepresentation and Adidas had already disclosed the risks involved in relying on a well known creative partner. The panel added that the company was not required to guess how Ye might behave in the future or predict when the collaboration might come to an end.
The complaint also referenced Ye’s appearance at a 2022 fashion show where he wore a design that said White Lives Matter and the antisemitic remarks that followed online. Those incidents led Adidas to halt production and remove Yeezy items from sale. Other major partners including Gap and JPMorgan cut ties with Ye during that same period which added further financial strain.