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Dismissal of Royalties Fraud Case Against Disney Upheld

A state appellate court upheld a ruling tossing out a lawsuit over the non-payment of royalties from merchandising of the iconic animated bear Winnie the Pooh. The decision released Sept. 25 by a three-judge panel was a victory for The Walt Disney Co. in its legal battles with the family of the man who owned the merchandising rights. The panel agreed with a lower court’s dismissal of the lawsuit due to misconduct on the part of plaintiff Stephen Slesinger Inc.’s investigator in obtaining confidential Disney documents. The appellate justices rejected arguments by SSI that the lower court did not have the authority to toss the case as a sanction for misconduct and that it abused its discretion by terminating the case. “The demise of [Slesinger’s] lawsuit has one cause only: the deliberate and egregious misconduct of SSI itself, making any sanction other than dismissal inadequate to ensure a fair trial,” the 54-page ruling concluded. SSI founder Stephen Slesinger obtained the merchandising rights to Winnie the Pooh from the bear’s creator A.A. Milne in 1930. After Slesinger passed away, the rights passed to his widow who has since died and daughter Patricia. SSI filed suit against Disney in 1991 for breach of contract and fraud for failure to pay the company its share of revenues from Pooh merchandise.

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