Mattel 2009 Annual Report Download - page 103

any individual personal injury claims). Under the settlement, Mattel has agreed, among other things, to provide
various categories of economic relief for members of the settlement class, maintain a quality assurance system
and make a charitable contribution to fund child safety programs. In addition, Mattel has agreed not to object to
plaintiffs’ counsel’s application to the Court for attorneys’ fees and expenses up to a specified amount.
Litigation Related to Product Recalls and Withdrawals in Canada
Since September 26, 2007, eight proposed class actions have been filed in the provincial superior courts of
the following Canadian provinces: British Columbia (Trainor v. Fisher-Price, filed September 26, 2007);
Alberta (Cairns v. Fisher-Price, filed September 26, 2007); Saskatchewan (Sharp v. Mattel Canada, filed
September 26, 2007); Quebec (El-Mousfi v. Mattel Canada, filed September 27, 2007, and Fortier v. Mattel
Canada, filed October 10, 2007); Ontario (Wiggins v. Mattel Canada, filed September 28, 2007); New Brunswick
(Travis v. Fisher-Price, filed September 28, 2007); and Manitoba (Close v. Fisher-Price, filed October 3, 2007).
Mattel, Fisher-Price, and Mattel Canada are defendants in all of the actions, and Fisher-Price Canada is a
defendant in two of the actions (El-Mousfi and Wiggins). All but one of the cases seek certification of both a
class of residents of that province and a class of all other residents of Canada outside the province where the
action was filed. The classes are generally defined similarly in all of the actions to include both purchasers of the
toys recalled by Mattel and Fisher-Price in August and September 2007 and children, either directly or through
their parents as “next friends,” who have had contact with those toys.
The actions in Canada generally allege that defendants were negligent in allowing their products to be
manufactured and sold with lead paint on the toys and negligent in the design of the toys with small magnets,
which led to the sale of defective products. The cases typically state claims in four categories: (i) production of a
defective product; (ii) misrepresentations; (iii) negligence; and (iv) violations of consumer protection statutes.
Plaintiffs generally seek general and special damages, damages in the amount of monies paid for testing of
children based on alleged exposure to lead, restitution of any amount of monies paid for replacing recalled toys,
disgorgement of benefits resulting from recalled toys, aggravated and punitive damages, pre-judgment and post-
judgment interest, and an award of litigation costs and attorneys’ fees. Plaintiffs in all of the actions except one
do not specify the amount of damages sought. In the Ontario action (Wiggins), plaintiff demands general
damages of Canadian dollar $75 million and special damages of Canadian dollar $150 million, in addition to the
other remedies. In November 2007, the class action suit commenced by Mr. Fortier was voluntarily discontinued.
After the discontinuance of his class action suit, Mr. Fortier filed an individual action in Quebec
(Fortier v. Mattel Canada, Inc., filed on November 22, 2007). In his individual action, Mr. Fortier alleges that he
purchased recalled toys and, as a result, suffered damages, including consequential and incidental damages such
as worry, concern, and costs of the products and replacement products, medicines, diagnosis, and treatment.
Mr. Fortier alleges damages of Canadian dollar $5 million. Mattel moved to stay Mr. Fortier’s individual action
pending resolution of the request to proceed as a class action filed in the El-Mousfi action also pending in
Quebec, and that motion to stay was denied. In December 2009, the Quebec court granted plaintiff’s request in
the El-Mousfi action to discontinue that proceeding.
All of the actions in Canada are at a preliminary stage.
Litigation Related to Product Recalls in Brazil
Three consumer protection associations and agencies have filed claims against Mattel’s subsidiary
Mattel do Brasil Ltda. in the following courts in Brazil: (a) the Public Treasury Court in the State of Santa
Catarina (Associacao Catarinense de Defesa dos Cidadaos, dos Consumidores e dos Contribuintes (“ACC/
SC”)—ACC/SC v. Mattel do Brasil Ltda., filed on February 2, 2007); (b) the Second Commercial Court in the
State of Rio de Janeiro (Consumer Protection Committee of the Rio de Janeiro State Legislative Body (“CPLeg/
RJ”)—CPLeg/RJ v. Mattel do Brasil Ltda., filed on August 17, 2007); and (c) the Sixth Civil Court of the
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