Mattel 2010 Annual Report Download - page 100

Judge Stephen Larson, who presided over the first trial, has since retired from the bench, and the case has
been transferred to Judge David O. Carter. Discovery has now been largely concluded. Judge Carter had
previously granted Mattel leave to file a Fourth Amended Answer and Counterclaims which focused on RICO,
trade secret and other claims, and added additional parties. On August 16, 2010, MGA asserted several new
claims against Mattel in response to Mattel’s Fourth Amended Answer and Counterclaims. These claims are for
alleged trade secret misappropriation, an alleged violation of RICO, and wrongful injunction. Mattel moved to
strike and/or dismiss these claims, as well as certain MGA allegations regarding Mattel’s motives for filing suit.
The Court granted that motion as to the wrongful injunction claim, which it dismissed with prejudice, and as to
the allegations about Mattel’s motives, which it struck. The Court denied the motion as to MGA’s trade secret
misappropriation claim and its claim for violations of RICO.
The Court resolved summary judgment motions in late 2010. Among other rulings, the Court dismissed both
parties’ RICO claims; dismissed Mattel’s claim for breach of fiduciary duty and portions of other claims as
“preempted” by the trade secrets act; dismissed MGA’s trade dress infringement claims; dismissed MGA’s
unjust enrichment claim; dismissed MGA’s common law unfair competition claim; and dismissed portions of
Mattel’s copyright infringement claim as to “later generation” Bratz dolls.
Trial of all remaining claims began in early January 2011. In February 2011, MGA commenced litigation in
the United States District Court for the Central District of California alleging that Mattel’s conduct in response to
MGA’s sale of Bratz violated both the federal antitrust statute and the California Business & Professions Code,
and constituted abuse of process under California law. Mattel believes these claims are without merit and intends
to vigorously defend against them.
Product Liability Litigation Related to Product Recalls and Withdrawals
Litigation Related to Product Recalls and Withdrawals in the United States
Twenty-two lawsuits were filed in the United States asserting claims arising out of the August 2, August 14,
September 4, and/or October 25, 2007 voluntary product recalls by Mattel and Fisher-Price, as well as the
withdrawal of red and green toy blood pressure cuffs from retail stores or their replacement at the request of
consumers.
Eighteen of those cases were commenced in the following United States District Courts: ten in the
Central District of California (Mayhew v. Mattel, filed August 7, 2007; White v. Mattel, filed August 16, 2007;
Luttenberger v. Mattel, filed August 23, 2007; Puerzer v. Mattel, filed August 29, 2007; Shah v. Fisher-Price,
filed September 13, 2007; Rusterholtz v. Mattel, filed September 27, 2007; Jimenez v. Mattel, filed
October 12, 2007; Probst v. Mattel, filed November 5, 2007; Entsminger v. Mattel, filed November 9, 2007; and
White v. Mattel, filed November 26, 2007, hereinafter, “White II”); three in the Southern District of New York
(Shoukry v. Fisher-Price, filed August 10, 2007; Goldman v. Fisher-Price, filed August 31, 2007; and
Allen v. Fisher-Price, filed November 16, 2007); two in the Eastern District of Pennsylvania (Monroe v. Mattel,
filed August 17, 2007, and Chow v. Mattel, filed September 7, 2007); one in the Southern District of Indiana
(Sarjent v. Fisher-Price, filed August 16, 2007); one in the District of South Carolina (Hughey v. Fisher-Price,
filed August 24, 2007); and one in the Eastern District of Louisiana (Sanders v. Mattel, filed
November 14, 2007). Two other actions originally filed in Los Angeles County Superior Court were removed to
federal court in the Central District of California (Healy v. Mattel, filed August 21, 2007, and Powell v. Mattel,
filed August 20, 2007). Another lawsuit commenced in San Francisco County Superior Court was removed to the
federal court in the Northern District of California (Harrington v. Mattel, filed August 20, 2007). One other
action was commenced in District of Columbia Superior Court and removed to the United States District Court
for the District of Columbia (DiGiacinto v. Mattel, filed August 29, 2007). Mattel was named as a defendant in
all of the actions, while Fisher-Price was named as a defendant in nineteen of the cases.
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