Knight Capital Partners Corp. v. Henkel AG & Co., No. 18-2189 (6th Cir. 2019)Annotate this Case
KCP, the plaintiff, had hoped to act as a middleman in a potential distribution deal for a novel cleaning product and targeted Henkel, a large consumer products company as a potential distributor. KCP and Henkel entered into a non-disclosure agreement (NDA) to aid in the negotiations of a distribution deal. KCP provided Henkel with confidential information about the product. Following a year of exchanging information and engaging in negotiations, the NDA lapsed, and no deal was consummated. KCP asserts that Henkel’s parent company, Henkel KGaA, used confidential information it acquired through the NDA to develop the product on its own and also interfered with the potential distribution deal. The district court granted summary judgment in favor of KGaA. As to a breach of contract claim, the court found that KGaA was not a party to the NDA and could not be liable for its breach. As to a tortious interference claim, the court found that KGaA is the parent company of Henkel, so the parent-subsidiary privilege immunizes it from a tortious interference claim involving its subsidiary; the court found that the narrow “improper motive” exception to that privilege did not apply. The Sixth Circuit affirmed summary judgment in favor of KGaA, KCP has not presented sufficient evidence of any improper motive or means to pierce the parent-subsidiary privilege.