Mattel Faces Lawsuit Over Failed Donation Pledge to UCLA Children's Hospital
The toy company, Mattel, known for its popular franchises like Hot Wheels and Barbie, is currently facing a new lawsuit filed by UCLA and its health system. The lawsuit alleges that Mattel failed to fulfill a pledge to donate $49 million to the university's children's hospital.
In the past, Mattel had made significant donations to the UCLA children's hospital. Back in 1998, the company formed a partnership with the university and donated $25 million to the hospital over a period of time. This donation was made in exchange for the hospital bearing Mattel's name as per the terms of their agreement.
In 2017, Mattel and UCLA entered into another agreement, similar to the previous one. As part of this agreement, Mattel pledged to donate $49 million to the children's hospital over a 12-year period. In return, the hospital rebranded itself and incorporated Mattel's name, becoming the UCLA Mattel Children's Hospital.
UCLA recently made changes to its name and signage by incorporating Mattel's corporate logo. This decision was a result of Mattel's agreement to donate $50 million to The Regents, on behalf of UCLA Health, and the UCLA Foundation for the UCLA Mattel Children's Hospital. The purpose of the donation was to expand pediatric care and improve the health of children worldwide, according to a lawsuit.
However, the lawsuit alleges that Mattel later reneged on its pledge, citing financial issues. Despite UCLA Health initially agreeing to temporarily suspend Mattel's payments in 2018, the suit claims that the company never fulfilled its promise to donate to the children's hospital. This is despite Mattel reporting a net income of over $900 million in 2021 and experiencing a surge in profits due to the success of the "Barbie" movie at the box office earlier this year.
The lawsuit states, "Despite months of entreaties and alternative proposals, Mattel has refused to honor its promise, offering instead to make an in-kind contribution (e.g., Barbie dolls and Hot Wheels) and small monetary donations. These offerings are insufficient compared to the contracted-for funds required for providing care and advanced medical research."
The lawsuit seeks the full donation amount initially pledged by Mattel, accusing the company of breaching their contract. The suit also seeks additional damages to be determined during a trial.
"UCLA Health has taken legal action against Mattel, Inc. in order to enforce the $49 million pledge made in a 2017 agreement," stated a spokesperson for UCLA Health in response to the lawsuit. The spokesperson further expressed that litigation was not the university's preferred option and that UCLA Health had made several good-faith attempts to resolve the matter through dialogue, but these efforts were unsuccessful.
In response, a representative from Mattel stated that the company highly values its longstanding relationship with UCLA Health and referred to a clause in the 2017 agreement. The clause apparently specified that the entire multi-million dollar pledge was designated for the construction of a new tower at the children's hospital and could not be used for any other purpose.
The representative emphasized that UCLA Health had abandoned its plans for the new hospital tower, thus failing to meet the conditions outlined in the 2017 agreement.
Despite the legal dispute, Mattel affirmed its continued support for UMCH's ongoing activities, including fundraising, toy donations, cash contributions, and community involvement. The company emphasized the importance of supporting current pediatric activities at the hospital.
"Mattel has continued to enthusiastically support UMCH's ongoing activities including fundraising, toy, cash and in-kind donations, and community activations," the statement continued, adding that supporting "current pediatric activities" at the hospital is important to the company.
