Spin Master’s Victory In Sanctions Dispute at 7th Circuit


Cooley LLP advised Spin Master on the deal.

Spin Master and its former subsidiary Swimways obtained a major victory in a litigation filed by two individuals seeking royalties they baselessly claimed they were owed.The US Court of Appeals for the Seventh Circuit affirmed an award to Spin Master and Swimways of nearly $272,000 in sanctions against the plaintiffs and their former counsel for filing and pursuing the frivolous lawsuit.

In 2017, Tai Matlin and James Waring sued Spin Master and Swimways in the US District Court for the Northern District of Illinois, bringing claims for breach of contract, unjust enrichment and fraud.

Cooley first filed a motion to dismiss for lack of personal jurisdiction, which the district court granted. The Seventh Circuit affirmed that dismissal in an earlier appeal. Cooley also moved for sanctions under Rule 11 of the Federal Rules of Civil Procedure, arguing that all claims asserted against Spin Master and Swimways were frivolous because they were barred by binding rulings against Matlin and Waring in the prior arbitrations and by the plain meaning of the relevant contract. The district court granted the Rule 11 motion and ordered Matlin and Waring and their counsel to pay certain costs and attorneys’ fees associated with the defense against the frivolous suit. Matlin and Waring appealed – again.

In November, the Seventh Circuit upheld the sanctions order and award, emphasizing that Matlin and Waring have been embroiled in disputes over the intellectual property and contractual claims at issue for 17 years.

The Cooley team included Jon Graves (Picture), Joseph Van Tassel and Dawn Roelofs.

Involved fees earner: Jon Graves – Cooley LLP; Joseph Van Tassel – Cooley LLP;

Law Firms: Cooley LLP;

Clients: Spin Master;

Author: Ambrogio Visconti