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Disney Loses A Round In Pooh Brawl

21 Nov, 2002 By: Hive News

The Walt Disney Co, has lost a bid to prevent jurors in a trial over Winnie-the-Pooh royalties from hearing that the company destroyed boxes of documents related to the case, including a file marked "Winnie the Pooh Legal Problems."

The California Court of Appeals yesterday rejected Disney's appeal of sanctions for destroying documents in the decade-long legal battle over Winnie-the-Pooh royalties. The plaintiff in the case is Shirley Slesinger Lasswell, the 79-year old widow of licensing pioneer Stephen Slesinger.

"The court found that Disney misused the pretrial discovery process by destroying evidence it knew or should have known was sought by SSI [Stephen Slesinger, Inc.], making false and evasive responses to SSI's discovery, and unduly delaying notification about the records destruction. The court found the records destruction was 'at least due to its [i.e., Disney's] gross negligence,'" Justice Norman Epstein wrote.

The ruling means that when the case goes to trial next March, the jury will be instructed to accept as fact versions of events put forth by the family that granted the Pooh rights to Disney, according to lawyers for the plaintiffs, heirs of a literary agent who bought the North American merchandising rights from author A.A. Milne.

"This is a tremendously important ruling for the Slesinger family," said lawyer Bert Fields. "The jury will be told that certain conversations which we contend go right to the heart of the case were true. These include specific promises made by Disney executives to pay the family royalties, which Disney is now denying ever took place."

Some documents were destroyed as late as 1998, long after the family had requested their production, said Fields, who also represented DreamWorks SKG cofounder Jeffrey Katzenberg in his dispute with Disney.

"That took place as Disney was successfully keeping the case sealed from the media and the public," Fields said. "All the family has been asking is that Disney pay what it owes. We think that the destroyed documents would have strongly supported the family's case."

Disney attorney Daniel Petrocelli has downplayed the plaintiffs' claims in the case, saying the Pooh home video royalties are covered under filmed entertainment rights Disney owns. But the plaintiffs contend Disney has underpaid what it owes for merchandise and that home video is part of the license they own. Their attorneys say te Selsinger heirs are owed hundreds of millions of dollars.

Published reports have estimated that Winnie-the-Pooh products and licenses generate as much as 25 percent of Disney's bottom line each year.

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