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If there was any doubt about Fenwick & West partner John Fox’s latest engagement — testifying as an employment law expert in the widely watched shareholder suit against the Walt Disney board of directors — his deposition three months ago made one thing clear: This was no Mickey Mouse assignment. A barrage of attorneys and stenographers, even a videographer, crowded into the largest Fenwick conference room. Wires snaked across the table, with each lawyer plugged into a bank of sound equipment. And when a plaintiff attorney tossed out a question, the response came from 17 attorneys all at once: “objection.” “Everybody looked shocked and surprised that it was so loud,” Fox recalls. The atmosphere promises to be all the more intense when Fox takes the stand next month in the high-profile shareholder lawsuit trial now unfolding in Delaware Chancery Court. As an anchor witness testifying in a highly visible bench trial, the pressure will be on Fox to put a pro-Disney gloss on the termination of former president Michael Ovitz. It will be Fox’s first turn as an expert, and as many as 50 lawyers will be watching from inside the courtroom — and more will be looking in via the Internet through paid subscription — as he opines in what’s seen as a watershed corporate governance case. Shareholders represented by the firm of Milberg Weiss Bershad & Schulman allege that Walt Disney’s board didn’t adequately investigate the hiring and “not-for-cause” dismissal. Had Ovitz been terminated “for cause,” Disney would have avoided paying him $140 million in severance for 14 months’ work. Disney lawyers at Fried Frank Harris Shriver & Jacobson will call Fox to testify that nothing that Ovitz did at Disney rose to the level of a cause discharge. “What’s interesting in this case and common in executive contracts is that the contract creates a unique definition of cause that is different from the common law definition,” Fox said. Ovitz’s contract sets a very high standard for a “for cause” termination, Fox says, and Disney would have risked an even bigger payout if it had terminated him that way. To prove his point, the Fenwick partner will offer rebuttal to a dozen claims made by an expert for the plaintiffs, Yale University law professor John Donohue III, regarding Ovitz’s performance. He is also counting on five bankers boxes of evidence that Ovitz discovered at the eleventh hour, including e-mail printouts, memos and other documents. “I believe they will be very supportive of Ovitz, that he was working hard for the Disney Co., that he was indeed working on important Disney projects, that he was meeting with managers to put their divisions ahead” said Fox, adding that he hadn’t finished going through them all. “That was a happy day for Michael Ovitz when he found those documents.” That the case is attracting significant attention is not lost on Fox. “I just finished a speaking tour [with the National Employment Law Institute] and as I met 500, 600 people from Chicago, Austin, this case was on their mind,” Fox said. “At a Halloween party around the corner [in his hometown of Los Gatos], a CEO dressed like Martha Stewart in full jail robes suddenly hands me a glass of wine — ‘What do you think about the Disney case?’” The case makes executives nervous for two reasons. “Should Disney lose, this opens the door to challenges to severance agreements across the board,” says Nixon Peabody labor and employment partner Jeffrey Tanenbaum. “It could create a wave of litigation.” From a corporate law standpoint, the case is a test of the business judgment rule and under what circumstances a court shall second-guess a board’s decision. “You can’t pick up any of the weekly highlights newsletters without seeing it,” says Stephen Bainbridge, a UCLA law professor who has blogged about the case. “Every conference I’ve been to, the trial has been a topic.” Fox has never appeared as an expert witness before, but the magnitude of his assignment doesn’t intimidate him. Like many attorneys, however, he did worry about stepping into an expert’s shoes. Patricia Gillette, an employment partner at Heller Ehrman White & McAuliffe, commented, “I’ve been asked a number of times, and I would never do it. I don’t want someone to quote [my words] back to me in a motion for a summary judgment.” But Pamela Phillips, of Rogers Joseph O’Donnell & Phillips, has testified, and she says attorneys are often overly cautious about the consequences to their practice. “[Being an expert] means you have mastered the law; it means people view you as someone likeable and that you present well,” said Phillips, whose firm has represented Fenwick. “I will tell you that being an expert is very hard,” she said, because you come in late and have to get up to speed quickly to be of value. For Fox, it was ultimately the appeal of the case — and that he believed it meshed with his expertise with executive contracts — that compelled him to accept an interview with a team of Disney lawyers. In the end, conflicts kept out some other contenders. “It has been fascinating work,” Fox said. “I have found that it has been helpful to my work as an employment lawyer, to really understand to the zenith all there is to know about executive employment contracts.” Fox is billing $650 an hour for the job — more, he says, than his usual $575. The work is arduous. “You are being grilled by very good lawyers, and lots of them,” Fox said. But being new to the stand may be a plus. “He will seem like less of a trained seal,” said Brian Ashe, a partner with Seyfarth Shaw.

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