Mattel 2010 Annual Report Download - page 102

Three appeals were filed by objectors relating to the approval of the settlement, dismissal of the MDL
actions, and the award of attorneys’ fees and expenses. In addition, plaintiffs appealed the award of attorneys’
fees and expenses. On November 19, 2010, the Ninth Circuit Court of Appeals approved the parties’ Joint
Stipulation to dismiss all of the appeals. This litigation is now concluded, and the parties are proceeding to
provide the Class with the relief specified in the class action settlement approved by the district court.
Litigation Related to 2007 Product Recalls in Canada
Since September 26, 2007, nine 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, Fortier v. Mattel Canada,
filed October 10, 2007 and Price v. Mattel Canada, filed October 8, 2010); 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 two 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.
In December 2009, the Quebec court granted plaintiff’s request in the El-Mousfi action to discontinue that
proceeding. On February 3, 2010, the plaintiff in the Saskatchewan action (Sharp) served a notice of motion
seeking certification of the action as a class action. That motion for certification, originally scheduled to be heard
in November 2010, has been adjourned with no new hearing date scheduled. Certification has not yet been sought
in any of the other actions in Canada.
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
Federal District (Brazilian Institute for the Study and Defense of Consumer Relationships (“IBEDEC”)—
IBEDEC v. Mattel do Brasil Ltda., filed on September 13, 2007). The ACC/SC case is related to the recall of
magnetic products in November 2006; the CPLeg/RJ case is related to the August 2007 recall of magnetic
products; and the IBEDEC case is related to the August and September 2007 recalls of magnetic products and
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