Tiny Dog Takes Bigger Bite Out of Taco Bell

Dog bites man. Again.

A federal judge Thursday ordered Taco Bell Corp. to pay an additional $11.8 million to the creators of the talking Chihuahua character that starred in a popular 1990s ad campaign for the Irvine-based fast-food firm.

U.S. District Judge Gordon Quist in Grand Rapids, Mich., tacked on the extra money as interest to the more than $30 million that a federal jury in June awarded Joseph Shields and Thomas Rinks for breach of contract and other claims against Taco Bell.

The marketing executives filed their suit in Michigan, where their company, Wrench, is based.

Michigan law requires that interest be calculated from the original filing date of the suit, which was submitted by Shields and Rinks in 1998. The total award now stands at about $42 million.

Lawyers for Shields and Rinks allege that the two men were negotiating to adapt their “Psycho Chihuahua” cartoon into a live character for Taco Bell when the company broke off talks and took the idea to another agency.

The resulting campaign hit the airwaves in 1997 with the catch phrase “Yo quiero Taco Bell,” Spanish for “I want Taco Bell.”

The $500-million campaign for the Mexican-food chain, which is a subsidiary of the Louisville, Ky.-based Yum Brands Inc., ended in 2000. Yum Brands also owns Pizza Hut and KFC.

Taco Bell spokeswoman Laurie Schalow said the character was created by the company’s former agency TBWA/Chiat/Day, not by Shields and Rinks, and that Taco Bell planned to appeal the initial ruling.

If its planned appeal is not successful, the company could seek reimbursement from its insurance carriers, and TBWA/Chiat/Day, Schalow said.