O’Melveny Sues MGA for $10.2M in Unpaid Legal Bills

In 2004, MGA Entertainment, maker of the popular Bratz dolls, hired O’Melveny & Myers to defend it in a copyright infringement case brought against MGA by Mattel, maker of Barbie dolls. Mattel contended that its former employee, Carter Bryant, a co-defendant in the case, developed the sketches for Bratz dolls while he was still under contract with Mattel. Bryant took his sketches to MGA, which manufactured the dolls. The battle ended in August 2008, after a three-month trial and a $100 million judgment in favor of Mattel.

For years O’Melveny billed MGA and MGA paid those bills, until it claims a billing dispute caused O’Melveny to withdraw from its representation in 2007. In its complaint, O’Melveny claims that it has been unable to resolve the dispute with MGA since its withdrawal, even after mediation. In the Complaint, in which O’Melveny claims $10.2 million in unpaid legal fees, the firm claims that its “patience and attempts at resolution have been disregarded or exploited by MGA.” The firm further alleges that MGA continually claimed to be conducting audits and probes of O’Melveny bills without any resolution.

For its part, MGA’s attorney, San Francisco-based William Gwire told another publication that O’Melveny’s complaint includes “needless and malicious accusations.” He explained that 300 separate O’Melveny timekeepers billed MGA more than $23 million, of which MGA has already paid more than $13 million. He claims that the dispute between the parties was always about more than fees, that “serious questions about the caliber, quality, and competency” of the firm’s work caused MGA to suffer enormous losses “that dwarf the amounts being claimed by O’Melveny,” and that MGA is entitled to a refund. In 2007, The Recorder reported that O’Melveny withdrew as counsel after MGA’s founder and CEO decided against using O’Melveny’s star litigator as first chair in the trial.

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