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MGA Sues to Vacate Orrick's $23 Million Arbitration AwardClaiming arbitrators did not have the authority to grant the preliminary award mid-arbitration, MGA Entertainment has moved to vacate a $23 million arbitration award made to Orrick, Herrington & Sutcliffe as compensation for the firm's work on behalf of the toymaker in its hotly contested battle with Mattel over Bratz dolls.
2013-02-07 12:00:00 AM
MGA Entertainment has moved to vacate a $23 million arbitration award made to Orrick, Herrington & Sutcliffe to compensate the firm for its work on behalf of the toymaker in its hotly contested battle with Mattel over its Bratz dolls.
MGA Entertainment represented by Connor, Fletcher & Williams argued in court papers filed Monday in Orange County Superior Court, MGA Entertainment v. Orrick, Herrington & Sutcliffe, 00628354, that the arbitrators did not have the authority to grant the preliminary award in the middle of arbitration. On Jan. 25, a JAMS panel had issued a partial award to Orrick that consisted of a $23 million lien on the proceeds of MGA Entertainment's copyright case against Mattel Inc., according to the filing. The award also called for Orrick to submit a $100,000 bond to maintain the prejudgment lien.
"The arbitrators in the arbitration proceedings below have greatly exceeded their powers," Edmond Connor wrote in the petition. "Arbitrators have limited jurisdiction, and generally do not possess the same power to order interim relief that a trial court has even if the parties agree to confer such power on the arbitrators."
The parties entered arbitration to resolve a dispute over legal fees that Orrick claims MGA Entertainment owes it for its work in the long-running litigation. MGA is also asking the court to void the Confidential Arbitration Agreement because Orrick publicly disclosed the value of the award. Representatives for Orrick did not respond to requests for comment.
"This was a vitally important provision of the Confidential Arbitration Agreement, and formed a material part of the consideration for MGA's agreement to arbitrate its disputes with Orrick," the petition reads.
MGA also filed a petition on Feb. 4 to seal the records.
MGA has had strained relationships with the various firms that have represented it in the Bratz litigation. Orrick fired MGA as a client in October 2011 over unpaid legal bills, shortly after Irvine criminal defense attorney Jennifer Keller was brought in to serve as co-counsel with Orrick lawyers in the retrial with Mattel. O'Melveny & Myers, which represented MGA from 2004 to 2007, settled with the toymaker over unpaid legal fees in November 2011.
Another episode in the long-standing litigation appeared to have been resolved late last month. The U.S. Court of Appeals for the Ninth Circuit overturned MGA's $170 million trade secret award but let stand a $137 million award to the toymaker for the attorney fees and costs it incurred in its years-long litigation with Mattel.