It is not unknown for a losing party to refuse to pay its attorneys’ bills. Shocking, but not unknown. What is unknown – until now – is the winning party refusing to pay its attorneys’ bills.
In litigation with Mattel, MGA Entertainment, represented by the law firm of Orrick, Herrington & Sutcliffe LLP, was recently awarded $88.4 million in damages in addition to clear title to the Bratz line of “fashion dolls.” Presently pending are claims for a further $177 million in punitive damages and for attorneys’ fees, which are alleged to run into the hundreds of millions of dollars (we are not exaggerating). One would think that, under these circumstances, MGA would be more than happy to pay the bills from Orrick. Well, apparently not.
Orrick now claims that it is owed “more than $1.2 million in unpaid legal fees and costs.” In response, MGA asserted that it “has paid Orrick tens of millions of dollars in legal fees” and characterized the allegations by Orrick as “unprofessional.”
While all of this was transpiring, MGA was sued by one Bernard Belair, who claims that the Bratz dolls were improperly based on a series of drawings he created for a third party. (Belair v. MGA Entertainment Inc. et al.) To defend it in this matter, MGA has retained the law firm of Skadden Arps Slate Meagher & Flom LLP, replacing the allegedly unpaid and clearly unhappy Orrick.
The substitution of counsel is especially interesting when one remembers that Skadden had originally represented MGA in the marathon Mattel litigation, a representation that ended with a judgment for Mattel, which was awarded $100 million and custody of the little Bratz. The reversal of this decision and the recent judgment in favor of MGA were the handiwork of the now-dismissed Orrick firm. It seems to us that by this action, MGA exhibits a startling lack of gratitude, not to mention questionable judgment. In a horse race, who gets off of a winning horse to climb back on a loser?
In any event, if history is any indication, this case will continue to provide boundless audience entertainment and legal employment.