A recent NLJ story, “O’Melveny Seeks Discovery Sanction Against Former Client MGA” reports that 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 fee dispute case.  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.

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. 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.