A recent NLJ story, “Insurance Companies May Not Intervene to Seek Fees in MGA Case” reports that a federal judge has denied a request by insurance companies that paid legal fees for MGA Entertainment Inc. in its successful case against Mattel Inc. to intervene in a bid to snag part of the $141 million in attorney fees and costs awarded to the Bratz doll manufacturer.  Four insurance firms – National Union Fire Insurance Co., Lexington Insurance Co., Chartis Specialty Insurance Co. and Crum & Forster Co. – filed the motion to intervene in the case, arguing they are entitled to reimbursement for MGA’s defense fees and costs.

U.S. District Judge David Carter in Santa Ana, Calif. denied the motion, concluding that the insurers should have made their entitlement claim before MGA had applied for attorney fees and costs in the case.  Since they did not, “the insurers can no longer attempt to step into MGA’s shoes and directly recover reasonable attorneys’ fees from Mattel.  And any claim for reimbursement of those fees from MGA would unduly prolong this litigation, which has been administratively closed and is now on appeal.”  In their motion to intervene, the insurers said they had paid about $80 million for the MGA litigation.

“Nowhere in MGA’s fee application or briefing in support of its application did MGA indicate that it was pursuing attorney fees on behalf of its insurers,” he wrote.  “Moreover, the fact that MGA and its insurers have been engaged in other contentious litigation about coverage obligations, including a claim by MGA that the insurers acted in bad faith, and should have alerted the insurers to MGA’s unwillingness to champion their claims.”