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A tentative settlement of O’Melveny & Myers’ $10.2 million billing dispute with former client MGA Entertainment Inc. is on the verge of falling apart, an attorney for the law firm told a judge on Nov. 7. During a hearing in Los Angeles, Kevin Rosen, a partner at Gibson, Dunn & Crutcher who represents O’Melveny, told Los Angeles County, Calif., Superior Court Judge Elizabeth White that it was “fish-or-cut-bait time” for the settlement negotiations. “If it doesn’t happen this week, it’s not going to happen,” he said of a deal. “It’s not clear it’s going to happen this week.” MGA’s attorney, Edmond Connor, managing partner of Connor, Fletcher & Williams in Irvine, Calif., who participated by telephone, said the parties might need the judge’s assistance to resolve the impasse. “I do in fact hope that we do resolve this,” he said. White scheduled the next hearing for Nov. 18. On Oct. 3, the parties filed a stipulation informing the court that they had reached a tentative settlement. The details, including the amount, were not made public. Later, Christopher Jennings of Los Angeles-based Gibson Dunn, said the lawyers were working with retired U.S. District Judge Dickran Tevrizian, a neutral at JAMS in Los Angeles. During the Nov. 7 hearing, neither attorney described the nature of the impasse. O’Melveny, which represented MGA from 2004 to 2007 in its fight with Mattel Inc. over the rights to the Bratz doll line, sued its former client last year for unpaid bills associated with its work on that case. The dispute lingered for more than a year as both sides fought over discovery. On Sept. 14, MGA replaced its lawyer in the fee dispute, James Rosen of Rosen Saba in Beverly Hills, Calif., with a team including Connor and two other partners from his firm, Michael Williams and Douglas Hedenkamp. The team also includes Jennifer Keller of Keller Rackauckas, who successfully represented MGA in the Mattel trial. In that case, a federal jury awarded MGA $88.5 million after finding that Mattel stole trade secrets by planting spies at industry trade shows. U.S. District Judge David Carter issued a $310 million judgment that included the verdict, which he lowered to $85 million to correct a mathematical error, exemplary damages, attorney fees and costs. In the billing dispute, MGA initially filed a counter complaint asserting that O’Melveny had botched the transition to its successor firm, Skadden, Arps, Slate, Meagher & Flom, just before the first Bratz trial began. In that trial, a federal jury awarded Mattel $100 million on claims that MGA infringed on its copyright for the dolls, but the U.S. Court of Appeals for the 9th Circuit overturned the verdict. MGA dropped the malpractice claims after O’Melveny moved for sanctions based on discovery violations. O’Melveny isn’t the only firm alleging unpaid legal bills against MGA associated with the Mattel case. On Oct. 19, U.S. District Judge David Carter in Santa Ana, Calif., who oversaw the second Mattel trial, granted Orrick, Herrington & Sutcliffe’s request to withdraw from representing MGA. Orrick, which MGA hired in 2009, cited $3.85 million in unpaid legal fees and other compensation. According to Orrick’s motion, MGA has no plans to fork over the unpaid amount and has filed an arbitration action against the firm seeking more than $10 million, rendering a relationship impossible. Orrick began representing MGA soon after the first trial after handled its appeal before the 9th Circuit. Contact Amanda Bronstad at [email protected].

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