Mattel 2007 Annual Report Download - page 113

On January 9, 2008, Mattel do Brasil filed an administrative appeal with regard to the December 21, 2007
decision.
In addition to the matters discussed above, a few individual consumers in Brazil have brought individual
lawsuits against Mattel do Brasil. These lawsuits have been brought in special courts that provide expedited
judgments on cases involving amounts less than $7,000 and at consumer defense agencies (PROCONs).
Generally, these claims focus on alleged failures by Mattel to make refunds in cash or replace recalled products
with new toys in the proper time and manner. At present there are less than 10 such individual lawsuits; none of
these lawsuits states a claim for damages of more than $7,000.
All of the actions in Brazil, except the PROCON/SP proceeding, are at a preliminary stage.
Product Liability Litigation in Colombia
On August 22, 2007, plaintiff, a resident of Colombia, filed an action (Matiz v. Ministry of Health, et al.)in
the Administrative Court for the Bogata Circuit in the Republic of Colombia against Mattel and the Colombian
Ministry of Health. Plaintiff alleges the following claims: (a) violation of the collective right to free economic
competition, (b) violation of the collective right to public health, (c) violation of the prohibition against the
introduction of toxic waste into the national territory, and (d) violation of the collective right of consumers’ to be
free from unsafe products. Plaintiff seeks the following relief: an affirmative injunction for additional recalls; a
declaration of liability for violation of consumers’ “collective rights” to public health, free economic
competition, and the prohibition against the introduction of toxic waste into the national territory; economic
incentives of between 10 and 150 times the minimum monthly legal wage; and an award of litigation costs and
attorneys’ fees. The Court has denied the interim measures requested by the plaintiff. The action in Colombia is
in a preliminary stage.
Environmental
Beaverton, Oregon
Mattel previously operated a manufacturing facility on a leased property in Beaverton, Oregon that was
acquired as part of the March 1997 merger with Tyco Toys, Inc. In March 1998, samples of groundwater used by
the facility for process water and drinking water disclosed elevated levels of certain chemicals, including
trichloroethylene. Mattel immediately closed the water supply and self-reported the sample results to the Oregon
Department of Environmental Quality (“ODEQ”) and the Oregon Health Division. Mattel also implemented a
community outreach program to employees, former employees and surrounding landowners.
In January 2003, Mattel entered into a settlement with the ODEQ resolving its cleanup liability in return for
a contribution of $0.4 million to the cleanup, which is being performed by the company that caused the
contamination. Costs totaling approximately $8.6 million have been incurred through December 31, 2007 for the
Beaverton property, largely related to environmental remediation, attorney fees, consulting work, and an
employee medical screening program. As of December 31, 2007, the remaining liability totaled approximately
$1.6 million and represents estimated amounts to be incurred for employee medical screening, project
management, and other costs related to the Beaverton property.
General
Mattel is also involved in various other litigation and legal matters, including claims related to intellectual
property, product liability and labor, as well as environmental matters, which Mattel is addressing or defending
in the ordinary course of business. Management believes that any liability that may potentially result upon
resolution of such matters will not have a material adverse effect on Mattel’s business, financial condition, or
results of operations.
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