Aggressive Disney legal strategies fueled by h-house counsel loyalty.

GOING up against corporate counsel at Walt Disney Co., say litigators who have battled the media giant, is a fight to the death.

There's a good reason, according to Sandy Litvack, Disney general counsel from 1991 to 1998 and now in private practice at Quiun Emanuel Urquhart Oliver & Hedges in Los Angeles--the company fights when it believes it is right.

"Disney has applied a principled approach," Litvack says. "Other companies may decide it's more practical to resolve something quickly. Disney tends to stand on principle."

It's either principle or, as Orlando attorney John Stemberger puts it, "a knee-jerk, corporate response that they're not guilty of anything."

Stemberger, who sued the company in December on behalf of the estate of an artist over the design concepts for EPCOT Center, says "the corporate culture within Disney has a bit of arrogance as to the allegations of wrongdoing."

Stemberger attributes Disney's attitude to an "unbridled" loyalty among in-house counsel akin more to a family than a company. "Other lawyers who are in-house counsel are a bit more detached and perhaps more objective," he says.

Disney's in-house attorneys did not return calls for this story.

Consider a couple examples of Disney counsel's passion for protecting the company: In 1989, Disney threatened litigation against three daycare centers in Florida that would not remove Disney character drawings on the walls. In 1995, Disney filed a criminal case against a 17-year-old who accidentally walked out of a store at Disney World without paying For a $1.98 Mickey Mouse pen.

On the big stuff, they generally refuse to settle, says Bert Fields, a partner at Greenberg Glusker Fields Claman Machtinger & Kinsella LLP who is battling Disney over royalty payments due for the "Winnie the Pooh" character.

"They will make offers that are so ridiculously low, I guess they hope someone will go For them, but people don't," says Fields.

"If I were (litigating with) some companies, I would stress fairness and equity," Fields says. "With Disney, I'd say, 'You'll lose on motion one, two and three, and it'll cost you $2 billion.' I don't think they're interested in my view of what's equitable."

Unlike companies whose general counsel serve more to orchestrate the business' legal affairs, the Disney legal team historically has been led by fighters, with the head lawyer at Disney often directly involved in litigation. Litvack says he tried several cases personally because "it was the company's choice."

Still, Disney counsel often play the role of generals, carrying out strategies developed higher up the chain of command.

When Fields was taking on cases against Louis Meisinger, who resigned in January as general counsel, he says he noticed that many legal decisions were made with a "strong guiding hand from above."

"He was an excellent lawyer and a very nice man, but I don't think he was dictating things," Fields says. "Maybe it's been that way all this time."