Is it true? Can a California court throw you out on your ear just for being really, really, bad? And what in the world could that have to do with the bear with very little brain?
The answer to the first question is “yes.” The answer to the second question appears in Stephen Slesinger, Inc v. The Walt Disney Company (September 25, 2007) B178340. More after the jump.
In 1930, Mr. Slesinger acquired the rights to exploit
the Winnie the Pooh stories from the father of Christopher Robin
himself, A.A. Milne. Mr. Slesinger assigned the rights to SSI, a
corporation he formed, an in 1961, SSI licensed certain rights to
Disney.
In 1991 – yes, this case was apparently filed sixteen years ago -- SSI
sued Disney for breach of contract, fraud and declaratory relief. As
seems to always be the case with cases that go on forever, this one was
really, really nasty. Furthermore, the discovery battles took on a
life of their own. SSI obtained evidentiary sanctions and monetary
sanctions against Disney in 2001 after the judge concluded that Disney
had destroyed documents. Then, in 2003, Disney moved for a terminating
sanction – that’s California-ese for dismissing the complaint or
striking the answer – against SSI for “pervasive conduct.” After the
trial court conducted a five day hearing including live testimony
(extremely rare in California motion practice), and heard much evidence
of what the Court of Appeal described as “litigation misconduct run
riot,” the trial court dismissed SSI’s case.
The Court of Appeal affirmed the dismissal after finding there was
substantial evidence to support the trial court having found the
following:
- SSI employed an investigator on two occasions over a period of years to take documents from Disney facilities, trash receptacles and the secure facility of the document destruction firm Disney used;
- The investigator was hired by SSI’s then attorney (SSI had ten law firms during the suit), and managed by the husband of SSI’s sole shareholder, who admonished the investigator to “make sure what you’re doing is legal,” but took no steps to oversee him;
- Improperly obtained documents were received and/or reviewed by SSI’s sole officer and board member and her daughter, the sole shareholder;
- SSI refused to return confidential documents, and feigned ignorance about where they had had come from;
- In some instances, SSI falsely stated under oath that wrongfully obtained documents had come from Disney in discovery;
- SSI lied about having retained the investigator, and the investigator lied about where he had obtained documents;
- SSI altered documents to delete references to their confidentiality, or to remove fax legends showing who had faxed purloined documents to whom;
And on, and on, and on, for some twenty-three pages of description of misconduct.
The Court of Appeal followed this with another twenty-eight pages boiling down to the following: the trial court has inherent power to dismiss a case as a sanction for misconduct. It did not abuse its discretion in doing so here.
Comments