Peggy Lee wins a landmark case -- The singer opens the door for other performers with her success against the Walt Disney Company

I’m surprised I feel as good as I do,” says Peggy Lee, splashing around in the swimming pool of her Los Angeles home. ”I guess when you’re a winner you feel good.” The 70-year-old chanteuse has every reason to feel cheerful. She has suddenly become a heroine among Hollywood’s old guard, the only victory symbol thus far for yesterday’s stars as they confront today’s mammoth home video industry.

In Los Angeles County Superior Court last month, Lee, who suffers from a weak heart and diabetes and uses a wheelchair most of the time, emerged with a $3.83 million award in her lawsuit against the Walt Disney Company. Lee charged that the entertainment giant had violated her contract by releasing Lady and the Tramp on videocassette in 1987 without her permission. The singer had created four character voices in the 1955 animated classic and cowritten six of its songs. Her contract, signed in 1952, paid her only $3,500 but gave her the right to approve (and profit from) ”transcriptions for sale to the public.” According to the court, that includes videocassettes, an invention neither Disney nor Lee ever dreamed would exist.

Lee’s case opened an ancient wound in Hollywood, where older performers have routinely been victimized. ”Nobody saw coming and the studios took advantage,” snaps Celeste Holm (All About Eve). It wasn’t until 1971 that the Screen Actors Guild demanded — and got — residuals from movies used in ”supplemental” markets, which would later include videocassette. But the decision has also pumped new life into the town. Stars are dusting off decades-old contracts, hoping to find clauses that will allow them to share video’s $10-billion-a-year revenues. ”Everybody’s very excited,” says Dale Olson, a veteran Hollywood publicist who represents Glenn Ford, Shirley MacLaine, and Donald O’Connor, among others. ”It says the courts agree that the person identified with a product should participate in all profits.”

Many of those people are trying. Mary Costa, who gave voice to Disney’s Sleeping Beauty in 1959, and Ilene Woods Shaughnessy, who spoke for Cinderella in the 1950 film, have filed suit for video profits. Costa’s lawyer, Lise Hudson, says she has uncovered 16 other Disney artists who have transcription clauses in their contracts similar to Lee’s, including Dinah Shore and the Andrews Sisters. Marni Nixon, who dubbed the singing voices of the female leads in The King and I, West Side Story, and My Fair Lady, is looking for contracts in old scrapbooks.

However, few stars will find the language that gives them a piece of the sales. ”[Lee’s] is truly an extraordinary case,” says George Feltenstein, an MGM/Pathé Home Video executive, who says that MGM’s lawyers ”always made sure they reserved all the rights for the studio.” Even the Lee decision isn’t set in cement. Disney will probably appeal, arguing that a transcription in the 1950s specifically referred to a 16-inch metal disk used by radio stations. ”Disney has certainly made a fortune,” says Lee. ”I should think they’d be willing to share, but I guess mice need a lot of cheese.”