Disney wins ruling on Winnie the Pooh rights

Walt Disney Co. on Tuesday won an important appeals court ruling in its 16-year battle with a family that holds the lucrative merchandising rights to Winnie the Pooh.

The three-judge panel upheld Los Angeles County Superior Court Judge Charles W. McCoy’s 2004 decision, which dismissed the state court lawsuit brought by the family of Stephen Slesinger.

McCoy took the extraordinary step of terminating the case after he found that the Slesinger family tried to gain an edge in the litigation by stealing confidential Disney documents from trash and then lying and altering court papers to cover up the thefts.

Stephen Slesinger obtained merchandising rights to the silly old bear in 1930 from the author of the Pooh stories, A.A. Milne. When Slesinger died more than 50 years ago, the Pooh merchandising rights were passed to his widow and young daughter.

Attorneys hired by Slesinger’s daughter, Patricia Slesinger, had tried to argue that McCoy did not have the power to throw out the family’s case. But, in what some attorneys say is a precedent-setting ruling, the appellate court found otherwise.

“We hold that when a plaintiff’s deliberate and egregious misconduct makes any sanction other than dismissal inadequate to ensure a fair trial, the trial court has inherent power to impose a terminating sanction,” the 54-page ruling concluded.

The battle over the bear has cost the two sides tens of millions of dollars in legal fees and resulted in hundreds of thousands of documents filed in lawsuits that have come before at least four judges in California and federal courts.

“The message is loud and clear that if you cheat in the courts you forfeit your rights to the courts,” said Daniel Petrocelli, Disney’s lead attorney in the Pooh case. “Eventually, all of the cheating came to light and the case was rightfully thrown out.”

For her part, Patricia Slesinger said she planned to appeal Tuesday’s ruling to the California Supreme Court and pursue a separate lawsuit pending in federal court.

“We are still waiting for our day in court,” Slesinger said. “It’s all lies, lies, lies -- everything they said in that ruling. It’s a big illusion concocted by Disney.”

The court case started in 1991 when Slesinger and her mother, Shirley Slesinger Lasswell, filed a breach of contract lawsuit against Disney, claiming that the Burbank entertainment giant had cheated them out of hundreds of millions of dollars in royalties for Winnie the Pooh merchandise, computer software and videocassette tapes. Lasswell, 84, died in July.

In the mid-1990s, Winnie the Pooh surpassed Mickey Mouse as a moneymaker for Disney. At its peak, the bear raked in more than $1 billion a year for Disney.

Also in the mid-1990s, the Slesingers hired a private investigator to try to uncover evidence that would support their contention that Disney was cheating them out of Pooh royalties. The investigator was later accused of breaking into Disney offices, sifting through the company’s trash bins and then sneaking onto the Canoga Park property of a garbage disposal contractor in an effort to find more Pooh papers.

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meg.james@latimes.com