Multiple Energy Technologies, LLC v. Seth Casden

District Court, C.D. California·Decided February 21, 2025·No. 2:21-cv-01149·Unknown

Opinion

O

United States District Court Central District of California

MULTIPLE ENERGY Case № 2:21-cv-01149-ODW (RAOx) TECHNOLOGIES, LLC, Plaintiff, ORDER RE POST-TRIAL MOTIONS v. [218][219][220][228] SETH CASDEN,

Defendant.

Plaintiff Multiple Energy Technologies, LLC (“MET”) brought this action against Defendant Seth Casden for false advertising and tortious interference with contractual relations. After a jury trial, the Court granted in part MET’s Federal Rule of Civil Procedure (“Rule”) 50(a) motion on one claim, the jury returned a verdict in favor of MET on the second, and the Court issued a Post-Trial Order (“PTO”) addressing the remaining claims and issues. (Verdict, ECF No. 190; PTO, ECF No. 198.) Casden and MET now renew post-trial motions. (ECF Nos. 218, 219, 220, 228.) The Court deemed the motions appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. As the motions overlap, the Court addresses them in a single omnibus order. For the reasons below, the Court rules as follows. II. BACKGROUND1 MET developed a patented bioceramic infrared material branded as “Redwave.” Casden is the co-founder and CEO of Hologenix, which manufactures, markets, and licenses a patented bioceramic material branded as “Celliant.” Prior to this case, in February 2019, MET sued Hologenix for allegedly engaging in false advertising of Celliant. See Multiple Energy Technologies, LLC v. Hologenix, LLC, No. 2:19-cv-01483-PA (RAOx) (C.D. Cal. filed February 28, 2019) (“MET v. Hologenix”). On March 6, 2020, MET and Hologenix entered into a Settlement Agreement and General Release (“Settlement Agreement”), which settled MET’s claims in MET v. Hologenix. Casden negotiated and signed the Settlement Agreement on behalf of Hologenix. In the Settlement Agreement, Hologenix agreed to pay MET a total of $2,500,000 according to a schedule whereby Hologenix would pay $100,000 within one business day of executing the Settlement Agreement, $1,400,000 on or before April 23, 2020, and the remaining $1,000,000 in 2021. As part of the Settlement Agreement, Hologenix and MET also agreed to stipulate to a permanent injunction enjoining Hologenix from “stat[ing] or suggest[ing]” that the Food and Drug Administration (“FDA”) “approved” Celliant or “made a ‘determination’” that Celliant promoted any benefits. On March 10, 2020, the court in MET v. Hologenix entered the requested permanent injunction. Following entry of the permanent injunction, Casden made or approved statements about Celliant that violated the stipulated permanent injunction. Additionally, on April 22, 2020—the day before Hologenix was scheduled to pay $1,400,000 to MET pursuant to the Settlement Agreement—Hologenix filed for Chapter 11 bankruptcy. As a result of the bankruptcy proceedings, MET returned the only payment that it had received from Hologenix under the Settlement Agreement— the initial $100,000 payment. 1 The Court draws the background from the PTO. A. Procedural History MET subsequently filed this action against Casden. (See First Am. Compl. (“FAC”), ECF No. 24.) MET asserted four causes of action: (1) violation of the Lanham Act, 15 U.S.C. § 1125(A)(1)(B); (2) false advertising under California Business & Professions Code section 17500; (3) unfair competition under California Business & Professions Code section 17200; and (4) tortious interference with contractual relations. (Id. ¶¶ 76–108.) From June 20 to 23, 2023, MET tried its claims before this Court and a jury. (See Mins. Trial, ECF Nos. 177–80.) After the close of evidence, both parties moved for judgment as a matter of law pursuant to Rule 50(a). (See Trial Tr. (“Tr.”) 455:21 to 487:1, ECF Nos. 243–46.) The Court granted in part only MET’s Rule 50(a) motion, with respect to its claim for tortious interference. (Tr. 491.) In doing so, the Court found that Casden acted to advance his personal interests when he tortiously interfered with the Settlement Agreement, thus foreclosing any agency immunity defense. (Id. at 492.) Nonetheless, at Casden’s request, the Court submitted to the jury for advisory findings two questions related to Casden’s agency immunity defense. (Id. at 493:19 to 497:2; Verdict 4.) Consistent with the Court’s ruling, the jury issued an advisory finding that Casden acted to advance his own personal interests. (Verdict 4.) Relatedly, the jury returned an advisory verdict in MET’s favor on its tortious interference cause of action with an award of $1 in nominal damages. (Id.) The jury also returned a verdict in MET’s favor on its Lanham Act false advertising cause of action, similarly awarding $1 in nominal damages. (Id. at 1–2.) Several issues remained for the Court’s resolution. (PTO 2.) The Court expanded on the factual and legal bases for its ruling on MET’s Rule 50(a) motion, granting judgment as a matter of law for MET on the claim for tortious interference and rejecting Casden’s agency immunity defense. (Id. at 4–9.) The Court awarded MET $2.5 million in damages on the tortious interference claim. (Id. at 9–10.) On the Lanham Act false advertising claim, the Court found that MET is entitled to disgorgement of Casden’s profits, treble damages, and attorneys’ fees. (Id. at 10–13.) Similarly, the Court found Casden liable for false advertising and unfair competition under California law, and issued a permanent injunction. (Id. at 13–16.) Finally, the Court denied MET’s requests for punitive damages and restitution. (Id. at 10, 14–16.) On September 26, 2023, the Court entered judgment consistent with these determinations, awarding MET monetary and injunctive relief. (J., ECF No. 199.) B. Post-Trial Proceedings On October 10, 2023, MET moved for an order awarding attorneys’ fees pursuant to the Court’s PTO and the Lanham Act. (First Mot. Att’ys’ Fees, ECF No. 204.) On October 13, 2023, Casden moved to alter or amend the judgment, and for judgment as a matter of law (“JMOL”) or in the alternative for a new trial. (Mot. Alter-Am., ECF No. 209; Mot. JMOL, ECF No. 210.) Also on October 13, 2023, Casden filed an ex parte application seeking an order staying execution of the monetary component of the judgment and a waiver or reduction of the supersedeas bond for an appeal. (Ex Parte Appl., ECF No. 208.) In the ex parte application, Casden stated that without a stay, “he will have no choice but to immediately file personal bankruptcy.” (Id. at 3.) On October 17, 2023, before the Court ruled on Casden’s application, he filed for bankruptcy. (Notice Bankruptcy, ECF No. 212.) Consequently, the Court stayed the case pursuant to 11 U.S.C. § 362’s automatic bankruptcy stay. (Stay Order, ECF No. 213.) The Court denied all pending motions as moot, with leave to renew the motions upon the stay being lifted. (Id.) On June 11, 2024, Casden obtained an order from the bankruptcy court lifting the automatic stay in this action, “to permit [Casden] to proceed with his challenges to the judgment obtained by MET,” “including pursuing [his] post-trial motions, all post-judgment challenges, any and all appeals, including from the Judgment, and any retrial and/or remand.” (Status Report Ex. A (“Bankruptcy Court Order”) 2, ECF No. 217.) The stay was also lifted “for MET to pursue its motion for attorney’s fees.” (Id.) On July 19, 2024, the parties notified the Court of the Bankruptcy Court’s order and, on July 31, 2024, the Court lifted the stay. (Lift Order, ECF No. 222.) Casden now renews his three post-trial motions. First, Casden renews his renewed motion for judgment as a matter of law pursuant to Rule 50(b), or alte

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