Japanese toymaker Good Smile Company, which has business in the United States, is being sued by two former executives in a lawsuit that alleges the company engaged in tax evasion, discrimination, and selling “over-sexualized anime figures depicting minors,” which they said may violate United States’ obscenity laws. The former employees, Guy Brand and James Young-sik Kim, filed a cross-complaint in a California court after Good Smile sued the two former executives in 2020 for an alleged “brazen instance of corporate misconduct” that included breach of contract and unfair competition.
Brand and Kim, in their cross-complaint, also alleged that Good Smile profits from controversial website 4chan — and that the site has an office in its Tokyo headquarters.
Good Smile Company is a Japanese toymaker best known for its anime and gaming figures. The company has created licensed figures as part of its Nendoroid and Figma lines for games like Overwatch, League of Legends, and Cyberpunk 2077, and Nintendo franchises such as Mario, Kirby, The Legend of Zelda, and Animal Crossing. The company has also created toys for Disney, Marvel, and DC Comics, among others.
Good Smile filed its original complaint in September 2020, alleging that Brand and Kim — two former vice presidents who joined the company when their own operation was acquired by Good Smile — stole confidential information to create and profit from an alleged new, secret company. Good Smile had subsequently fired Brand and Kim.
The toymaker’s suit largely centers on an alleged contract with Netflix to produce a Stranger Things drive-in event that turned a Los Angeles street into Hawkins, Indiana during the pandemic. Good Smile’s suit says Brand and Kim conspired to push that deal to their own secret company, Imaginary People, and used their connection to Good Smile to “steal” the contract. An amended complaint was filed in July 2021 to allege that Imaginary People also stole opportunities from Good Smile for making masks and hats during the pandemic.
Good Smile is asking the court for $2 million in damages. On Sept. 1, Brand and Kim filed their cross-complaint, which went on to claim that Good Smile sells “oversexualized anime figures depicting minors,” including “teens and tweens in sexual positions,” with no buyer age restrictions.
Brand and Kim said that during their employment at Good Smile, they spoke to company leaders to express concern over how certain licensors — like Nintendo, Hasbro, and Disney — would likely distance themselves from the company after seeing these figures next to their licensed products. Though Good Smile does not create all of its figures, it does distribute them on its site. Among the other allegations is a claim that Good Smile has invested in the anonymous image forum 4chan, a website that has long been considered controversial because of the content it allows. (In the lawsuit, Brand and Kim specifically call out videos of the Christchurch murders in New Zealand, which were published on 4chan, as well as 4chan’s associations with Q-Anon and white nationalism.)
In 2015, 4chan creator Chris Poole sold the website to Hiroyuki Nishimura, who created 2channel, the website that had originally inspired 4chan. A source told Polygon that Good Smile is a “passive investor” in 4chan.
A Good Smile representative issued this statement to Polygon:
“This case, as Good Smile’s Complaint makes clear, is about corporate misconduct by the defendants in improperly exploiting Good Smile’s assets and goodwill for their own benefit as described the lawsuit. The Defendants’ cross complaint, in contrast, is based on demonstrably, knowingly, and provably false and defamatory allegations. Good Smile does not, however, comment on ongoing litigation, and intends to argue its case in Court, not in the press. And it will prevail when the facts are presented in the Courtroom.”
Lawyers for Brand and Kim told Polygon that their lawsuit “speaks for itself.”