Irvine-based Taco Bell Corp. has lost to its former advertising agency in a fight over the fast-food chain’s “Yo quiero Taco Bell” commercials.
The Los Angeles office of TBWA Chiat/Day won a court ruling last month relieving it of $42 million in legal costs that followed the success of its 1997 commercials for Taco Bell featuring a talking Chihuahua.
The Taco Bell commercials were so popular they turned up on toys and T-shirts. In the spots, the Chihuahua appeared to say, “Yo quiero Taco Bell,” or “I want Taco Bell.”
In 2003, Taco Bell, part of Kentucky-based Yum! Brands Inc., was ordered by a jury to pay $42 million in damages and legal costs in a breach of contract lawsuit filed by two Michigan men who alleged they had met with executives of the Mexican fast-food chain to pitch a campaign about a talking “Psycho Chihuahua.”
Thomas Rinks and Joseph Shields of marketing firm Wrench LLC, also of Grand Rapids, Mich., later broke off talks with Taco Bell.
In 1998, Shields and Rinks sued Taco Bell for alleged breach of contract. Their lawsuit claimed Taco Bell had approached them at a 1996 trade show, expressing interest in using the Chihuahua character.
Taco Bell used a talking Chihuahua in its TV commercials from 1997 to 2000. The dog eventually was dropped from the chain’s advertising.
In 2003, a Michigan jury ordered Taco Bell to pay Rinks and Shields.
Taco Bell then sued TBWA Chiat/Day, part of Omnicom Group Inc., in Los Angeles federal court claiming that the agency’s contract for the $500 million campaign made it responsible for all its legal costs, including the $42 million settlement.
In court documents, Taco Bell charted that in 1997 Chiat/Day “proposed a television commercial concept to Taco Bell in which a male Chihuahua dog would pass by a female Chihuahua to get to a person seated on a bench eating Taco Bell food.”
“Taco Bell did not influence or have input into Chiat/Day’s idea of using a Chihuahua dog for Taco Bell advertising,” the company said in court papers.
TBWA Chiat/Day counter sued, arguing Taco Bell’s lawsuit should be dismissed.
That resulted in a judge throwing out Taco Bell’s claim last month, according to court papers.
Calls were not returned by Taco Bell’s attorney, Chicago-based Jeffrey Charkow, a partner at Stein, Ray & Harris LLP, or by TBWA Chiat/Day’s local attorney, Douglas Emhoff, a partner at Whitwell, Jacoby, Emhoff LLP.
Bronstad is a staff writer with the Los Angeles Business Journal.
