Mattel Can’t Seek Damages From MGA Over Duty of Loyalty Claim, Judge Says

Mattel Inc. (MAT), the maker of Barbie dolls, can’t seek damages from rival toymaker MGA Entertainment Inc. for claims MGA aided and abetted Mattel employees to breach their duty of loyalty, a federal judge ruled.

U.S. District Judge David Carter in Santa Ana, California, granted MGA’s request for a ruling that Mattel’s claim in the dispute over the origins of MGA’s Bratz doll line fails as a matter of law.

“In California, there is no tort for ‘breach of duty of loyalty’ that is distinct from the recognized tort of ‘breach of fiduciary duty,’” the judge said in a ruling today.

A group of former Mattel seamstresses and sample makers as well as an intern, who Mattel says were induced to do work for Van Nuys, California-based MGA while still employed by Mattel, weren’t fiduciaries, the judge said. The breach of duty of loyalty claims involving Bratz designer Carter Bryant are superseded by Mattel’s trade-secret theft claims, the judge said.

Mattel and closely held MGA have been in trial since January 18 on Mattel’s allegations that MGA stole the idea for the pouty, multiethnic Bratz doll in 2000. The case returned to court after a $100 million verdict in favor of Mattel was overturned on appeal.

Lisa Marie Bongiovanni, a spokeswoman for El Segundo, California-based Mattel, had no immediate comment on the ruling.

The case is Bryant v. Mattel, 04-09049, U.S. District Court, Central District of California (Santa Ana).

To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

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