11-Year-Old Says Warner Bros. Kept Contest Winnings

LAW
by Amanda Bronstad

Douglas Gray might be forgiven if he feels a little like Sylvester the cat. The 11-year-old from Wasilla, Alaska, thinking he had nabbed a prize in a Warner Bros.-sponsored contest, found his claim denied. But like Sylvester's relentless pursuit to gobble up Tweety, Gray isn't giving up on his claim. Instead, his mother is taking Warner Bros. to court.

In the suit, filed June 12 in Los Angeles Superior Court, Kari Gray claimed that Douglas was denied a Chevy van he won as part of the online "Toon Marooned AdVenture Sweepstakes."

Warner Bros., according to the suit, denied her son's entry because he was younger than 18 though the rules state that, "If the prize is won by a minor, it will be awarded in the minor's name to his/her parent or legal guardian who must sign all required documents."

The action named Warner Bros. Online, which offered the contest on looneytunes.com, a site that includes message boards and streaming cartoons aimed at children. Also named was its parent company, AOL Time Warner Inc.

Warner Bros. spokeswoman Barbara Brogliatti said the company would not comment on pending litigation.

Gray is asking for damages and $31,410, the approximate retail value of the 2001 Chevy Venture Warner Bros. Edition van, according to the suit.

Legal Purses

L.A. firms had four of the top 25 positions in the annual Am Law 100 list published by American Lawyer magazine.

Despite an economic slump, revenues at Los Angeles firms rose 18.5 percent, exceeding San Francisco (9.6 percent), Chicago (9.4 percent) and New York (8.9 percent), according to the list. The highest-grossing law firm nationwide was New York-based Skadden Arps Slate Meagher & Flom LLP, with $1.2 billion in revenues. L.A.'s Latham & Watkins ranked No. 4, with $769.5 million.

Gibson Dunn & Crutcher LLP was 15th, with $537 million; O'Melveny & Myers LLP, with $490 million, came in at No. 19; and Paul Hastings Janofsky & Walker LLP ranked No. 22 with $455.5 million.

While profits at law firms nationwide rose by a paltry 2 percent average, profits at Los Angeles area law firms increased 16.7 percent, according to the Am Law 100 list.

Two Los Angeles firms, Gibson Dunn and Latham, joined the ranks of 18 law firms nationwide that made more than $1 million in profits per partner. Gibson Dunn's profits were up 13 percent over 2000, and exceeded $1.1 million per partner, making it the state's most profitable firm. Latham & Watkins recorded profits of just better than $1 million, up 6.6 percent from $990,000 in 2000.

O'Melveny, after an internal restructuring, posted $945,000 in profits, up 34 percent from $705,000 in 2000. Paul Hastings increased 12.9 percent, to $875,000 from $775,000 in 2000.



Staff reporter Amanda Bronstad can be reached at (323) 549-5225 ext. 225, or at abronstad@labusinessjournal.com.

Judge Rejects Bulk of Idealab Suit, Refiling Expected

By AMANDA BRONSTAD

Staff Reporter

The group of Idealab Inc. investors that sued the company in January seeking $1 billion and the technology incubator's dissolution have had the bulk of their claims rejected by a Los Angeles Superior Court judge.

The July 2 ruling by Judge Ralph Dau found in favor of Idealab on all but two counts, ordering the company to turn over its quarterly reports to the shareholders and to have its March 14 shareholder meeting certified correctly.

On all other issues, including the request to dissolve the company and the removal of its board, Dau ruled the investors failed "to state facts sufficient to constitute a cause of action."

Douglas McPherson, general counsel at Idealab, said, "The court's order is consistent with our view of the case. We were pleased to see all the substantive causes of action dismissed."

The investors are likely to, re-file their complaint, which included allegations of breach of fiduciary duty and deceit.

Skip Miller, a partner at Christensen Miller Fink Jacobs Glaser Weil & Shapiro LLP and representing the plaintiffs, would not talk about the ruling. He issued a statement through a spokesman that said, "The judge requested more details regarding specific claims made in the lawsuit filed by Idealab's preferred shareholders...We intend to file an amended complaint with the additional information requested by the court."

Having to re-draft a lawsuit is common in most litigation matters, said Tom Van Wyngarden, a partner at Morgan Lewis & Bockius LLP in L.A.

Among the plaintiffs are Moore Global Investments Ltd., T. Rowe Price Science & Technology Fund and Dell USA LP. The group, which represents 10 percent of Idealab's shareholders, named Chief Executive Bill Gross and other officers of the company in a Jan. 18 complaint alleging the squandering of $500 million of the $1 billion they invested in late 1999 and early 2000.

The investors claimed in court documents that Gross and other executives used shareholder funds to purchase Idealab shares, triple executive salaries and provide collateral on personal bank loans.

The suit claims most of the 26 Internet and technology companies incubated at Pasadena-based Idealab have failed. Idealab now has 15 incubated companies listed on its Web site.

Investors are asking Idealab for $500 million in losses plus $500 million in damages.

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