Tuesday, April 16, 2002
Ninth Circuit Vacates $500,000 Sanctions Award Against Attorney in Barbie Doll Copyright Dispute
By KENNETH OFGANG, Staff Writer/Appellate Courts
A $500,000 sanctions award against a partner in a prominent law firm must be reconsidered by the district judge, the Ninth U.S. Circuit Court of Appeals ruled yesterday.
The panel directed Judge Nora Manella of the Central District of California to take a second look at the order sanctioning attorney James B. Hicks in connection with the long-running litigation between Collegiate Doll Company and Mattel, Inc.
Hicks, who was with Luce, Forward, Hamilton & Scripps at the time of the order, has since moved to Ervin, Jessup & Cohen. He was unavailable yesterday for comment.
Manella imposed the sanctions after concluding that a suit by Hicks’ client—which claimed that one of Mattel’s Barbie Doll designs infringed a copyright owned by Collegiate—was a “sham” because the allegedly infringing dolls had been copyrighted by Mattel before the Collegiate dolls were created. The judge also said that Hicks had behaved “boorishly” during discovery, tossing Barbie dolls off a table and openly lambasting his own client for making a “damaging admission” during his deposition.
Judge M. Margaret McKeown, writing for the appeals court, said the panel did not mean to “condone Hicks’ conduct or suggest that the district court did not have a firm basis for awarding sanctions.” But the panel could not uphold the award as ordered because it appeared to be based in part on conduct that cannot be the subject of penalties under Rule 11 of the Federal Rules of Civil Procedure, McKeown said.
Rule 11 is similar to Code of Civil Procedure Sec. 128.7. It allows the court to order payment of attorney fees and costs incurred in defending against a “pleading, written motion, or other paper” which is frivolous, intended to delay or harass, or factually unsupportable.
Sanctions may be awarded on motion of the opposing party, provided that the party against whom sanctions are sought is given a 21-day “safe harbor” to withdraw the offending paper, or by the court after issuance of a sua sponte order to show cause. It is expressly inapplicable to discovery violations.
Hicks and Luce Forward represented Collegiate and its principals, Harry and Claudene Christian, in three intellectual property suits with Mattel. Claudene Christian designed a cheerleader doll while a student at USC in 1990, then formed Collegiate, along with her father, to design and market similar dolls across the country.
The first suit was settled with Collegiate agreeing to pay Mattel $100,000 and change its marketing process. It was the second suit, brought by Harry Christian—who did not sign the first settlement agreement—that resulted in the sanctions order and the appeal ruled on yesterday.
There was also a third suit, in which the Christians discharged Hicks, went pro se, and reached a settlement in which they assigned the rights to the original doll face and head designed by Claudene Christian to Mattel.
Mattel also sued the Christians, Hicks, and his former firm for defamation in connection with a television interview in which they accused the toy giant of trying to drive Collegiate out of business.
That suit was originally dismissed by Judge Mel Red Recana on grounds of privilege, but was recently reinstated in part by the Court of Appeal for this district. The panel held that the interview was privileged, but the repetition of the comments in the Luce, Forward firm newsletter was not.
In the case decided yesterday, McKeown agreed that Hicks had sued “[i]n the face of facts and law clearly against his client” and failed “to perform even minimal due diligence...simply by examining the doll heads” to discover the copyright dates.
But the case must go back to Manella, the appellate jurist said, because her order “strongly suggests” that the award was partially based on discovery violations, misconduct at oral argument, and misconduct in the previous lawsuit, none of which is sanctionable under Rule 11.
Attorneys on appeal were Adrian M. Pruetz of Quinn Emanuel Urquhart Oliver & Hedges for Mattel and Kent L. Richland and Jessica M. Weisel of Greines, Martin, Stein & Richland for Hicks.
The case is Christian v. Mattel, Inc, 00-56194.
Copyright 2002, Metropolitan News Company