In a significant legal development, the class-action lawsuit brought against Adidas by HRSA-ILA Funds has reportedly been dismissed. The lawsuit, which centered on the fallout from Kanye West‘s (now known as Ye) controversial comments, concluded on August 16, with the judge ruling that Adidas was not liable for Ye’s actions.
Ye’s partnership with Adidas, which ended in 2022 following his antisemitic remarks, has continued to affect both parties. The lawsuit alleged that Adidas misled investors through various risk disclosures and statements concerning its diversity and sustainability initiatives from fiscal years 2018 to 2021.
Judge Karin J. Immergut addressed the case, emphasizing that while Ye’s behavior was undeniably troubling, the court’s role was not to hold Adidas morally accountable but to determine if the company had engaged in federal securities fraud. The judge found that HRSA-ILA Funds had not provided sufficient evidence that Adidas had misled investors.
The plaintiffs argued that Adidas failed to inform investors about the risks associated with its partnership with Ye, which they claimed led to inflated stock prices. However, Judge Immergut noted that Adidas had previously disclosed the risks associated with unethical behavior from business partners, including measures to address such risks through contract clauses.
Despite this legal victory, Adidas faces ongoing challenges from significant revenue losses and unsold merchandise. Meanwhile, Ye appears to be rebuilding his brand, securing a commercial slot during the 2024 Super Bowl to promote Yeezy on a platform managed by his team.