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O’Melveny & Myers has moved for sanctions against MGA Entertainment Inc., complaining that its former client failed to turn over a large portion of discovery in a fees dispute. O’Melveny represented MGA in the first trial in its lengthy copyright infringement case against Barbie manufacturer Mattel Inc. over the rights to the Bratz line of dolls. In 2008, a jury awarded Mattel $100 million in damages, although that verdict was tossed out on appeal and a subsequent jury awarded MGA $88.5 million for trade-secrets theft. O’Melveny sued MGA in July 2010 seeking $10.2 million in unpaid legal bills. Now, a year later, O’Melveny has asserted that MGA has failed to comply with discovery orders. “The conclusion is now inescapable: MGA has made a calculated gamble that it can pursue its defense and cross-claims through a deliberate strategy of discovery evasion and litigation by ambush,” O’Melveny’s lawyer, Kevin Rosen, a partner at Los Angeles-based Gibson, Dunn & Crutcher, wrote in a court document on July 27. “For the past year, MGA has willfully dodged its discovery obligations, repeatedly ignored multiple court orders, and effectively derailed this entire litigation.” MGA’s attorney, James Rosen of Rosen & Saba in Beverly Hills, Calif., replied that O’Melveny’s sanctions request violates his client’s due process rights. He argued that the sanctions argument is moot, given MGA’s request to file a new cross-complaint in the case. “Even though MGA firmly believes that O’Melveny was a substantial cause for the loss of the first Mattel trial and cost MGA hundreds of millions of dollars, MGA has determined that protection of its communications with subsequent counsel in the ongoing Mattel action is paramount to pursuing its current legal malpractice allegations in the cross-complaint,” James Rosen wrote for MGA. “Accordingly, MGA is willing to forego valuable and substantial claims against O’Melveny and drastically limit the magnitude of this action in order to avoid production of privileged communications by and between MGA and its subsequent counsel in the Mattel action.” Kevin Rosen declined to comment on O’Melveny’s behalf, and James Rosen did not respond to a request for comment. A hearing on the sanctions request was scheduled for Aug. 16 in Los Angeles County, Calif., Superior Court. O’Melveny is seeking terminating or evidentiary sanctions that would prohibit MGA from arguing that the firm botched the transition of the case to Skadden, Arps, Slate, Meagher & Flom, causing “millions of dollars in attorney’s fees and costs billed by Skadden,” the firm argued. Among the discovery that MGA has failed to provide are invoices, communications and work product associated with Skadden, the firm said. O’Melveny also is seeking to sanction MGA for arguing that the firm improperly failed to tender the Bratz litigation to MGA’s insurers. The firm is seeking documents of correspondence with MGA’s insurers. Additionally, O’Melveny wants sanctions prohibiting MGA from pursuing over-billing allegations against the firm. In the Mattel case, Kevin Rosen wrote, MGA has filed documents arguing that its request for attorney fees–which includes O’Melveny’s–is reasonable. MGA is seeking $161 million in fees and costs. During the second trial, the jury rejected Mattel’s assertion that MGA had infringed on its copyright by hiring away the designer who came up with the Bratz doll design, concluding that Mattel did not own the rights to the first four models of the Bratz dolls or two newer versions. The jury found that, to the contrary, Mattel had stolen trade secrets from MGA by planting spies at industry trade shows. MGA’s attorney, James Rosen, wrote that O’Melveny’s sanctions requests should have been brought in a motion, not as part of a discovery dispute. He wrote that MGA has complied with its discovery obligations, having provided O’Melveny with 9 million pages of documents. An audit of O’Melveny’s bills is due by Oct. 31. MGA was in the process of turning over the Skadden documents, which has been an “extremely arduous and costly endeavor,” he wrote. Skadden now represents MGA in a related copyright infringement case brought by a New York artist who claims he created the Bratz doll. Orrick, Herrington & Sutcliffe, co-counsel for MGA during the second trial, moved to withdraw from the New York case, citing MGA’s failure to pay $1.2 million in attorney fees. MGA has moved to file a new cross-complaint in the fee dispute that would eliminate many of its original arguments, James Rosen wrote. A hearing on MGA’s motion to file a new cross-complaint was set for Aug. 30. MGA has asked that the Aug. 16 hearing be postponed until after the Aug. 30 hearing. Amanda Bronstad can be contacted at [email protected].

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