LOS ANGELES, May 25 /PRNewswire/ -- Stephen Slesinger, Inc., owner of much
of the licensing rights to the Winnie the Pooh characters, has filed an appeal
in its long running battle with The Walt Disney Company over claims that
Disney owes Slesinger $700 million or more in royalty payments spanning 20
years. The appeal was filed by the law firm of Howard Rice Nemerovski Canady
Falk & Rabkin of San Francisco, in the Court of Appeal of the State of
California, Second Appellate Division, Division 4.
The appeal is from the decision by California Superior Court Judge Charles
W. McCoy, Jr. to dismiss the 13 year-old suit because, more than ten years
ago, an investigator for Slesinger's prior trial attorney had inspected trash
bins outside Disney offices and found documents related to the controversy.
Slesinger had agreed in the trial court that it would make no use of any
document found in Disney's trash by the investigator, and had proposed a set
of procedures that would have put teeth into this assurance. These included
obtaining a new set of trial lawyers who had not seen those documents.
Jerome B. Falk, Jr., a Howard Rice appellate specialist who is lead
counsel for Slesinger in the appeal, said: "The trial court's action was
unprecedented and, I am convinced, incorrect. Slesinger had agreed to
procedures that would have assured Disney a fair trial with no use of
documents from its trash. Dismissal of the entire case was overkill, and
deprived Slesinger of its day in court on claims that, even by Disney's public
estimate, exposed it to hundreds of millions in damages."
The original lawsuit was filed by Slesinger in 1991, after discovering
that Disney had repeatedly breached its contractual obligations for several
years during which it failed to account accurately and pay royalties that it
As the litigation progressed Slesinger learned that Disney had destroyed
numerous boxes of files containing evidence relating to the case, including a
file entitled "Winnie the Pooh Legal Problems." In a prior order, another
Superior Court judge had severely sanctioned Disney for this destruction of
evidence. The order terminating the case not only erased those sanctions, but
also relieved Disney of all liability for hundreds of millions of dollars in
unpaid royalties on Slesinger's breach of contract claim.
The appeal raises three basic grounds for reversal of the judgment. The
first is that California trial judges lack the power to terminate a lawsuit as
a sanction unless the legislature confers such a power by statute, and that no
statute authorized the trial court to impose such a sanction in this case.
The second point made in the brief is that even in those circumstances
where a statute does authorize dismissal as a sanction, the court cannot do so
unless the offending party had violated a prior a court order. In this case,
there was no court order dealing with trash searches by Slesinger's private
Finally, the brief argues that under well-established California law,
terminating sanctions are never permitted unless no sanction short of
dismissal could remedy the conduct found to have been improper. A sanction
that is more severe than necessary confers a windfall on the other party.
Here, Slesinger had proposed a court order preventing any use of the documents
and requiring it to obtain new trial counsel who would be screened from seeing
any of the documents in question.
As the brief asserts, the terminating sanction "relieves Disney of the
consequences of its own wrongful destruction of evidence for which Disney had
been severely sanctioned by another judge before the terminating sanctions
were imposed on Slesinger."
Jerome Falk said: "This is a very strong appeal. The goal of the law is
to provide the parties with a level playing field so that disputes can be
resolved on their merits. Here, Slesinger's strong case on the merits has
been tossed, not because a jury found that it lacked merit but because of
something an investigator did more than a decade ago. As our brief argues,
the trial court didn't level the playing field, it inappropriately punished
Slesinger by eliminating the playing field altogether."
Shirley Slesinger Lasswell, the 83-year-old president of Stephen
Slesinger, Inc., and widow of licensing pioneer Stephen Slesinger, who entered
into the original licensing agreement with A. A. Milne in 1931, said, "My
husband and I built the Winnie the Pooh franchise and then sold the licensing
rights to Walt Disney himself in 1961. We never expected Disney to breach its
contract with us. This would never have happened if Walt Disney were still
All we ever wanted was our day in court," said Pati Slesinger, Shirley's
SOURCE Stephen Slesinger, Inc.