UCLA files lawsuit against Mattel after the company walked back $49 million children’s hospital donation
UCLA and its health system have filed a lawsuit against Mattel, the company behind popular toy franchises like Barbie, Hot Wheels and American Girl, claiming the toy company failed to make good on its pledge to donate $49 million to the university’s children’s hospital.
The lawsuit states that in 2017, Mattel agreed to donate $49 million in installments over 12 years to the UCLA Mattel Children’s Hospital.
The two organizations have had a partnership since 1998, when Mattel donated a separate $25 million to the UCLA Foundation to help support the construction of the children’s hospital Westwood campus, the Los Angeles Times reported. In exchange, the hospital agreed to include Mattel in its name.
The deal seemed to proceed smoothly, with Mattel delivering the initial funds by 2004 and agreeing to host an annual party at the Santa Monica Pier to raise money for the hospital, according to the publication. Thousands of children have been treated at the hospital in the years since.
But after the 2017 deal was reached, Mattel tried to “offer the pediatric hospital just a few million dollars, plus a bunch of Barbie dolls, Hot Wheels cars and other in-kind donations” instead of donating the full amount, according to UCLA’s lawsuit, as reported in the L.A. Times.
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The lawsuit was filed on behalf of the regents of the University of California and the UCLA Foundation and accused the El Segundo-based company of breaching its contract. UCLA is seeking the total amount from the original pledge along with damages for financial difficulty stemming from Mattel walking back its original pledge.
“As a last resort, UCLA Health has taken legal action to compel Mattel, Inc. to honor its $49 million pledge under a 2017 contractual agreement. Litigation is not the University’s preferred path. UCLA Health made multiple good faith attempts to resolve this matter through meaningful dialogue, and those efforts were unsuccessful,” a UCLA spokesperson said in a statement to KTLA.
“In 2018, UCLA Health agreed to Mattel, Inc.’s request to temporarily suspend scheduled payments on the pledge. UCLA Health is disappointed that the company since then has repeatedly declined to renew the payments, including in 2021 when the Mattel, Inc. reported a net income of more than $900 million.”
However, Mattel disputes UCLA’s claims that the company breached its contractual obligations.
“Mattel deeply values its longstanding relationship with UCLA Health and we are proud that UCLA Mattel Children’s Hospital (UMCH) bears our company’s name. Our $25M endowment of the hospital in 1998 was the single largest gift made to any U.S. children’s hospital by a corporation or corporate foundation at the time,” a Mattel spokesperson said in a statement to KTLA.
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“In 2017, Mattel and UCLA Health entered into a separate pledge agreement specifically for the construction of a new hospital tower. Our agreement expressly allocates funds for the new tower and provides that funding cannot be allocated for any other purpose by either party alone. UCLA Health has unilaterally abandoned its plans for the construction of its new hospital tower. As a result, the conditions for the pledge under the 2017 Agreement have not been met.”
The spokesperson also mentioned that the company continues to support the hospital through “fundraising, toy, cash and in-kind donations, and community activations” and that doing so is “important to the company.”
A spokesperson for UCLA Health said that the hospital will continue to provide high-quality care to its patients as legal matters proceed.
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