The Pooh Papers
NO FIRE, LOTS OF SMOKE FROM POOH CORNER
by Joe Shea
American Reporter Correspondent
LOS ANGELES, Jan. 11, 2001 -- Friday was Day 3,966 in the Hundred-Mile Wood of the Stephen Slesinger Inc. v Walt Disney Co. case. A Superior Court hearing on suppressed documents in the long-running battle over royalties from Winnie the Pooh was confined to the judge's chambers, and its outcome was still more delay in releasing documents made public by Judge Ernest Hiroshige on Dec. 10.
But amid the deafening silence of the voluminous case file reporters want to examine, a new issue boiled to the fore when Los Angeles Daily Journal columnist Garry Abrams came under fire from Daily Variety correspondent Janet Shprintz, a former lawyer, for quoting Hollywood superlawyer Bert Fields saying that the owners of U.S. and Canadian commercial rights to Pooh are seeking cancellation of their contract with the Walt Disney Co.
Shprintz, who said she got a frantic phone call from Disney attorney Daniel J. Petrocelli immediately after he read Abrams' column protesting the inclusion of the quote -- which may have contributed to a $0.99 drop in Disney's stock on the day after its publication -- said there is "absolutely" no chance that the case will come to trial, and thus no likelihood that the contract will be ended.
But Shprintz was contradicted by Fields' law partner Bonnie Eskenazi, who said the contract can and probably will be terminated after trial. Meanwhile, Disney lawyer Daniel J. Petrocelli said Disney believes heirs to the Pooh rights "manipulated" internal memos and promised to "investigate" whether a series of 1982 "Dear Mommie" letters about the contract from the daughter of late talent agent Stephen Slesinger to her mother are forgeries. Petrocelli said the letters should have been produced in 1991, but were not revealed until 1997.
Eskenazi told The American Reporter -- with several other reporters in earshot studiously not listening -- that she has won several recent cases in which, after a breach of contract was proved, her clients were given the right to terminate their contracts as well as damages. Sometimes, she said, only one of the three remedies for breach of contract are provided by a jury or judge, including rescission, damages and terminationof the rights "going forward" from the date of termination.
In the Slesinger case," she said, "It's perfectly possible [for that] to happen. If the jury finds a material breach of contract, which we believe they will, we get Pooh back." The plaintiffs don't seek rescission, she said, since it would be difficult to separate Pooh from the studio's elaborations of the property. The whmisical little bear "permeates their whole universe," she said.
Eskenazi also said there has not yet been any discussion with possible suitors.
"We haven't gotten to that point yet," she said. "I can't imagine that we'd have trouble finding anybody." She added that Disney owes the Slesingers "hundreds of millions" in back royalties on sales of videocassettes, computer software and other merchandise, a claim Disney disputes.
Outside the courtroom, Petrocelli told reporters that the Slesingers "are not owners" and control "a very small portion of the rights." He said the Slesinger case had "veered off" from the limited issue of Disney's accounting for sales into one seeking far more based on documents that were either destroyed, or, as he put it, "manipulated." He said Disney will challenge their authenticity and their late release in the discovery process in upcoming hearings prior to trial to determine which may be admitted. Disney also will seek to have the court rule on "what the contract does and doesn't mean," and ask for a separate trial on damages.
Under a deal between the judge, Disney, Slesinger and the Los Angeles Times, which successfully moved to get the case file unsealed in early December but has yet to obtain any documents, the court will holdanother hearing on March 1 to decide which of the documents sought by reporters will be released. Disney asked to replace the scheduled Feb. 10 hearing on the documents with a hearing on Feb. 22, but Judge Hiroshige said he needed more time and set the hearing and arguments on the form of the trial for March 1.
In the meantime, Disney personnel will be loaned to the court to edit out the documents they don't want released. It is unclear who is representing the press in that process, if anyone. On Jan. 18, Day 3,974 of the case, any documents not challenged in a list of some 200 documents presented by Disney at today's hearing will "immediately be made available," Petrocelli said.
The hearing, which was scheduled to begin at 8:30 a.m., never got underway, but in the courtroom lawyers for the three sides prepared to meet with the judge. Judge Hiroshige returned a wave from the American Reporter as he arrived at a side door of the courtroom at 9:28 a.m.
Afterwards, the anticipated arguments were replaced by an in-chambers discussion with Jens B. Koepke, a lawyer for the Times, on the sealed documents, and a conference-setting discussion between Slesinger and Disney, several of the eight lawyers present told reporters at about 10:30 a.m. Judge Hiroshige never entered the courtroom.