Disney told to stop trashing ‘Pooh’ papers

10-year case involves royalty dispute

The Walt Disney Co. was enjoined Tuesday from further destruction of documents in the decade-old “Winnie the Pooh” case.

Ruling from the bench on an unusual motion, L.A. Superior Court Judge Ernest Hiroshige held that an injunction was “a proper method of ensuring that there is no destruction of evidence.”

The judge’s written order was unavailable because the entire record has been sealed in this case.

Tuesday’s order follows a June 2000 ruling in which Hiroshige ordered Disney to pay monetary sanctions for the destruction of documents and held that the plaintiff was entitled to a jury instruction that Disney willfully destroyed evidence.

The long-running case pits plaintiff Stephen Slesinger Inc. — the company that holds the bulk of North American rights to A.A. Milne’s “Winnie the Pooh” — against Disney, which has been licensing the Pooh character since the 1960s. Outside of North America, the Milne estate holds most Pooh character rights, which were recently purchased by Disney in a deal worth an estimated $350 million. There is some disagreement over exactly which rights were held by Slesinger and which by the Milne estate.

Claims shortchanging

Slesinger claims that it has been shortchanged on royalty payments for videocassettes, computer games, stuffed animals and theme parks in an amount that has been estimated to be in excess of $300 million.

Over the years, there have been several changes of counsel. Slesinger is currently represented by Bert Fields, who last tangled with Disney in the Katzenberg case. Disney is now represented by Dan Petrocelli, who gained fame when he represented the Goldman family in their civil suit against O.J. Simpson.

In his order last year, Hiroshige found that Disney destroyed correspondence that Slesinger contended supported its position that under a 1983 agreement it is entitled to royalties on videocassettes. The documents — some 40 boxes of files — were destroyed two years after the litigation had been filed and included a box marked “Winnie-the-Pooh” legal problems.

At Tuesday’s hearing, Disney argued that there was no evidence of ongoing destruction of documents and there was no need for the stigma of a further order. Disney also suggested that if a new order were entered, it should be applied to both parties.

No evidence

Fields countered that there was no evidence that plaintiffs had ever destroyed documents and that there was a need for a further order against Disney. “Somewhere in the belly of the beast, people are destroying documents, and we have no way of stopping them,” Fields said.

Overruling Disney’s objections, Hiroshige said, “Leaving Disney in charge of documents is like leaving the fox in charge of the chicken coop. There is good cause to single out one party on this motion.”

After the hearing, Petrocelli said, “The judge was not looking at any new evidence today. He just asked for an order clarifying the scope of his decision last June.”

On another matter, Hiroshige lifted a six-year stay on discovery, allowing plaintiffs to take depositions and obtain further financial information.