Fate of Pooh case could depend on mysterious papers.

Among the hundreds of boxes of legal papers in the long running legal fight over royalties generated by "Winnie the Pooh" is one document nobody wants to claim.

Said to contain confidential financial details about Walt Disney Co., the fate of the decade-long fight over hundreds of millions of dollars in "Pooh" payments now hangs, in part, in how the document came to be in the hands of lawyers representing the family of the late Stephen Slesinger.

The document came to light when lawyers at Jones Day disclosed its presence shortly after taking over the case and receiving a trove of documents, according to a source familiar with the situation.

Rick McKnight and Elwood Lui, both partners at Jones Day, inherited the case from Bertram Fields, who represented the Slesingers in the Disney case for about three years.

Fields, a partner at Greenherg Glusker Fields Claman Machtinger & Kinsella LLP, resigned from the "Winnie the Pooh" case in June. McKnight and Lui have also resigned from the case. Court papers regarding Fields' resignation are sealed.

Field's resignation came around the time he said he was being interviewed by the FBI as part of a federal investigation into alleged illegal wiretaps by Anthony Pellicano, a private investigator retained by some of Hollywood's top entertainment lawyers--and whom Fields had often retained.

Fields said the Pellicano questions were part of an "information gathering interview" and were "not accusatory." He also said that the questions "had absolutely nothing to do with my resignation in the 'Winnie the Pooh' case." He said the case against Disney never came up during the FBI's questioning.

Case in the balance

The mystery document, along with other allegedly stolen Disney papers will be part of a trial set by L.A. Superior Court Judge Charles McCoy for January 2004.

Should Disney succeed as part of the so-called evidentiary trial in convincing the judge that the Slesingers have been using stolen evidence, it could see the family's entire case against it thrown out. It could also see monetary sanctions levied against the Slesingers on grounds they were tied to criminal activities in obtaining the documents, according to court papers.

Disney has already alleged in court filings that people hired by the Slesingers stole tens of thousands of confidential documents during the mid-1990s. But the mystery document is dated far more recently, a source familiar with the situation said.

Patricia Slesinger, Stephen Slesinger's daughter, is suing Disney along with her mother, Shirley Slesinger Lasswell. In an interview, she called Disney's allegations "an improper Disney spin."

"When there was a transfer of the file, from one law firm to another, some stuff came over late," Slesinger said. "We don't know where they came from. They were in the lawyer's file."

Stephen Slesinger acquired the merchandising rights to "Winnie the Pooh" from its creator, A.A. Milne, about 70 years ago and signed a licensing deal with Disney in the 1960s.

On Feb. 3, Disney filed a motion to issue monetary sanctions against the Slesingers because they hired unlicensed private investigator Terry Sands in the early and mid-1990s to allegedly steal internal Disney files from garbage bins and offices, according to court papers.

"For years, SSI (Stephen Slesinger Inc.) used an unlicensed, private investigator in a criminal scheme to sneak into private Disney facilities and steal confidential and privileged Disney documents," Disney said in its Feb. 3 motion.

Fields was not representing the Slesingers at that time of the alleged thefts.

Still, Disney claimed in its motion that Fields turned over nearly 5,000 pages of allegedly stolen documents inherited by him when he took over the case.

Disney's outside counsel, Daniel Petrocelli, a partner at O'Melveny & Myers LLP, declined comment.

In court papers, Disney claimed that Sands, who was employed by Nick Harris Detectives Inc., used a neighbor and ex-convict, Dale Holman Sr., to steal the documents. Holman Sr. brought his then-teenage son, Dale Holman Jr., to act as an "alibi" during the searches, according to its filings.

Turnabout

Slesinger has called Disney's allegations retaliatory, especially since the California Supreme Court earlier this year reaffirmed a $90,000 sanction against Disney for Slesinger legal fees because it failed to disclose it had destroyed boxes of evidence, including one labeled, "Winnie the Pooh--legal problems."

"There is no evidence that any Disney employee ever reported a single theft of any such document from a desk or briefcase, much less the hundreds or 'thousands' of documents Disney now claims were 'stolen,'" Slesinger said in a reply brief filed earlier this year.

While she admitted she hired Sands, Slesinger said in court papers that documents were only taken from public garbage bins, which is not illegal.

As to the more recently discovered documents, including the mystery document, Slesinger claimed in the interview to have no knowledge of their origins. She could not say whether other investigators had been used in the case, but was adamant that Pellicano was never hired.

She said that both she and Sands filed declarations denying any knowledge of the source of the mystery document Disney claims was stolen in the last couple of years.

Sands could not be located for comment. Representatives of Nick Harris Detectives, which has an unlisted phone number, could not be reached for comment.

Since 1977, Nick Harris Detectives has had no record of disciplinary actions and holds a valid private investigator's license through May 31, 2004, said Kevin Flanagan, a spokesman for the California Department of Consumer Affairs, which oversees the Bureau of Security and Investigative Services.

He could not verify employees of Nick Harris Detectives but said an individual named Terry Sands had a gun permit that expired in 1997 and a security guard's license that expired in August 1999.

"This person is not a private investigator," he said. "This person is a security guard."