by Joe Shea
American Reporter Correspondent
December 12, 2001
LOS ANGELES, Dec. 12. 2001 -- Los Angeles Superior Court Judge Ernest Hiroshige today moved to unseal tens of thousands of documents in a long-running case that has pitted the Walt Disney Co. against heirs to the U.S. rights to Winnie the Pooh in a dispute over hundreds of millions of dollars in alleged past-due and future royalties.
Along with two Brooklyn-based Yiddish publications, Der Blatt and Yidisher Gedansk, The American Reporter joined the motion to unseal the documents, filed by attorneys for the Los Angeles Times just before Thanksgiving. Some of the documents will become available on Jan. 11, and others on Feb. 10 or soon after, attorneys said.
The American Reporter, which was represented by attorney Alexander J. Petale of Hollywood, specifically sought three key documents, including two orders on sanctions against Disney and a third amended complaint in the case which could have far-reaching impacts on Disney revenues. According to a variety of sources, Pooh revenues account for about 20 percent of Disney's annual $25 billion in earnings.
In an exclusive report, The American Reporter revealed earlier this year that among the sanctions against Disney is one that permits the licensors to end its deal with Disney, which currently provides them about $1 million per month in royalties. Disney is said to have earned $4.5 billion on Pooh merchandise in the year 2000.
In staying the request for immediate access to those documents, Judge Hiroshige cited the complexity of the order on sanctions and said that if there are attachments to the third amended complaint, Disney ought to be given time to review them and possibly object to their being made public. The third document was innocuous, he indicated, but included it in the stay apparently for consistency's sake.
Judge Hiroshige saidd at the close of the hearing that he was moved to unseal the documents due to "the very primary interest of the public in learning what is going on in their courts."
The latter order is believed to be a very brief finding that Disney destroyed 40 boxes of documents in the case, including one that was marked, "Winnie The Pooh -legal problems" after Hiroshige ordered Disney not to destroy any records related to the case.
The Times' motion to unseal the records sought all documents in the court file. Seeking to delay any release of the documents, Disney attorney Daniel J. Petrocelli of O'Melveny & Myers -- who gained international fame when he won a $35 million judgment against O.J. Simpson on behalf of the families of murder victims Ron Goldman and Nicole Brown Simpson -- successfully argued that some documents in the file might give help competitors of Disney if they contain trade secrets.
Elizabeth Moriarty and Bonnie Eskenazi, representing Stephen Slesinger, Inc., in court papers filed in the case argued that there were few if any trade secrets in the entire file, which is estimated to contain some 80,000 documents. They reiterated that argument today.
Tens of thousands of additional pages produced in discovery in the case would not be available under the order because they are protected by a 1991 confidentiality agreement between the two parties.
"I could not begin to quantify" the huge volume of records that may now become available, Petrocelli said.
The judge's three-page tentative ruling was handed out to reporters Thursday morning in the courtroom, and it cited an argument advanced in a case involving Copley Newspapers, where the newspaper chain was unable to establish the possible need for confidentiality in that case because all of it was under seal. A newly-adopted court regulation, California Rules of Court Rule 243.1, that seeks to prevent items of compelling public interest from being sealed was not cited in Judge Hiroshige's opinion.
In another development, Petrocelli told The American Reporter that settlement talks in the case "have been going on for years." He noted that many times cases such as this one are settled before they go to trial. In earlier statements, Slesinger attorney Bertram Fields said Disney has made no effort to settle the case. Judge Hiroshige is expected to set a trial date on Jan. 11, 2001, about 11 years after it was originally filed in Los Angeles. Disney will have until then to decide which documents it wants to keep sealed, and will be heard on those issues on Feb. 10. The documents which it does not contest would be opened to the media and the public on Jan. 11, and others might become available on Feb. 10 or shortly afterwards.