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The insurance companies that paid the legal costs associated with MGA Entertainment Inc.’s successful court battle with Mattel Inc. are seeking to recover a portion of the $141 million in attorney fees and costs awarded to the Bratz doll manufacturer. In an Aug. 26 motion to intervene, four insurance companies said they have rights to share in the fees and costs awarded to MGA earlier this month after a federal jury issued an $88.5 million verdict against Mattel, maker of Barbie. The dispute centered on who owned the copyright to the Bratz doll, but the jury awarded damages based on separate claims that Mattel had stolen trade secrets from MGA by planting spies at industry trade shows. U.S. District Judge David Carter in Santa Ana, Calif., in issuing final judgment on Aug. 4, lowered the verdict to $85 million to correct a mathematical error but awarded an additional $85 million in compensatory damages, $109 million in attorney fees and $32 million in costs. Mattel has indicated it plans to appeal the entire judgment to the U.S. Court of Appeals for the 9th Circuit. In their motion to intervene, the insurance companies claimed to have spent $80 million in fees and costs for MGA. Of that, three of the firms — National Union Fire Insurance Co. of Pittsburgh, Lexington Insurance Co. and Chartis Specialty Insurance Co. — claimed to have spent more than $55 million. Lexington provided general liability coverage for MGA from 2006 through 2008, while National Union and Chartis provided excess umbrella coverage from 2001 through 2003. The fourth company, Crum & Forster Specialty Insurance Co., which provided coverage from 2003 through 2005, claimed to have spent more than $25 million. “A significant portion of the fees and costs paid by the proposed Intervenors are the fees and costs that MGA [has] now been awarded,” wrote lawyers for the insurance firms. “Despite these rights, MGA has advised this Court and Mattel that the insurers are not entitled to any portion of the fees and costs that have been awarded.” William Hanssen, a partner at Drinker, Biddle & Reath’s Los Angeles office who represents National Union Fire, Lexington and Chartis, did not return a call for comment. Susan Field, a partner at Los Angeles-based Musick Peeler & Garrett who represents Crum & Forster, declined to comment. MGA spokeswoman Susan Hale did not respond to a request for comment. In declarations filed with the motion, lawyers for the insurance companies said MGA’s counsel told them during an Aug. 12 meeting that their clients did not have rights to any portion of the fees and costs. In opposing attorney fees and costs, Mattel’s lawyers emphasized that MGA was well funded by insurance companies and didn’t need such compensation. MGA’s lawyers, in response, said that insurance companies would not be receiving funds awarded as part of the fee request. The award was designed to cover billing invoices for a long list of law firms, including Skadden, Arps, Slate, Meagher & Flom; Orrick, Herrington & Sutcliffe; and O’Melveny & Myers. While MGA’s fee request was pending, Orrick, its most recent counsel in the Mattel case, abruptly withdrew from a related copyright action in New York, citing $1.2 million in unpaid legal bills. O’Melveny, MGA’s counsel from 2004 to 2007, sued its former client one year ago over $10.2 million in unpaid legal fees. On Aug. 26, MGA dropped counterclaims in that case that O’Melveny had botched its preparation for the first trial, in which a federal jury in 2008 awarded Mattel $100 million in damages. The U.S. Court of Appeals for the 9th Circuit tossed out that verdict, prompting this year’s retrial. Los Angeles County, Calif., Superior Court Judge Elizabeth White was scheduled to hear arguments on Aug. 31 regarding whether MGA, which continues to dispute O’Melveny’s claims for unpaid legal fees, should be sanctioned for alleged discovery abuses. Separately, MGA has sued its insurers over coverage of the Mattel case. In 2009, in a case against Crum & Forster, former U.S. District Judge Stephen Larson, ruling on a summary judgment motion, found that Crum & Forster had a duty to defend MGA. Lexington also has suits pending against MGA and Crum & Forster. In the Crum & Forster case, Lexington seeks reimbursement for more than $40 million in defense fees, costs and related expenses it paid to MGA. The insurance cases have been consolidated before Carter and are scheduled to go to trial on Feb. 7. Contact Amanda Bronstad at [email protected].

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