Warner Bros, TMZ v. Starline Tours - complaint.pdf

8/18/2019 Warner Bros, TMZ v. Starline Tours - complaint.pdf

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COMPLAINT

CALDWELLLESLIE &

PROCTOR

CALDWELL LESLIE & PROCTOR, PCLINDA M. BURROW, State Bar No. 194668

[email protected] R. JOHNSON, State Bar No. 247583 [email protected]

JULIA J. BREDRUP, State Bar No. 275526

[email protected] South Figueroa Street, 31st Floor Los Angeles, California 90017-5524Telephone: (213) 629-9040Facsimile: (213) 629-9022

Attorneys for PlaintiffsEHM PRODUCTIONS INC., dba TMZ,and WARNER BROS.ENTERTAINMENT INC.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION

WARNER BROS. ENTERTAINMENTINC., a Delaware corporation, andEHM PRODUCTIONS INC., dbaTMZ, a California corporation;

Plaintiffs,

v.STARLINE TOURS OFHOLLYWOOD, INC., a Californiacorporation,

Defendant.

Case No. 2:16-CV-02001

COMPLAINT FOR:

(1) Trademark Infringement Underthe Lanham Act, 15 U.S.C. § 1114;

(2) Unfair Competition Under theLanham Act, 15 U.S.C. § 1125(a);

(3) False Designation of Origin, Falseor Misleading Description of Fact,False or Misleading Representation of Fact, False Advertising and UnfairCompetition under the Lanham Act;

(4) Trademark Dilution Under theLanham Act, 15 U.S.C. § 1125(c);

(5) Trademark Infringement Under

Common Law;(6) False Advertising Under Cal. Bus.& Prof. Code § 17500;

(7) Violation of Cal. Bus, & Prof.Code § 17200;

(8) Declaratory Relief

Case 2:16-cv-02001-SJO-GJS Document 1 Filed 03/23/16 Page 1 of 21 Page ID #:1


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-1- COMPLAINT

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Plaintiffs Warner Bros. Entertainment Inc. (“WBEI”) and EHM Productions

Inc., dba TMZ (“TMZ”) (collectively, “Plaintiffs”), bring this action to halt

Defendant Starline Tours of Hollywood, Inc. (“Starline”)’s false advertising,

unauthorized use of Plaintiffs’ registered and unregistered trademarks, and unfair

competition, and for a judicial declaration that TMZ had a right to terminate its

contract with Starline as a result of Starline’s material breaches.

INTRODUCTORY STATEMENT

1. TMZ and Starline are parties to a written agreement (the “TMZ-

Starline Agreement”) pursuant to which Starline operated TMZ-branded bus tours in

the Los Angeles, California area (the “TMZ Bus Tour”). Among Starline’s

obligations to TMZ were to remit timely payments of tour revenue to TMZ, to

maintain a separate bank account for all TMZ Bus Tour revenue. Starline breached

each of these provisions, among others, and TMZ thus properly terminated the

Starline Agreement, which, in turn, terminates Starline’s right to operate the TMZ

Bus Tour and Starline’s license to use Plaintiffs’ marks.

2. Starline, however, continues to use Plaintiffs’ marks and the goodwill

associated therewith, to sell TMZ Bus Tour tickets for periods after the end of the

60-day wind-down period in the TMZ-Starline Agreement (a date that TMZ has

agreed to extend by 30 days), despite having no right to conduct any TMZ Bus

Tours after that date. Plaintiffs thus bring this action to vindicate their rights and

protect the TMZ brand and confused consumers from the irreparable harm caused

by Starline’s unauthorized use of the TMZ marks.

THE PARTIES

3. Plaintiff TMZ is a well-known distributor of news related to the

entertainment industry and pop culture. TMZ runs multiple websites—TMZ.com,

TMZ.sports.com and fishwrapper.com—through which TMZ investigates and

reports on issues relating primarily to entertainment, sports, and business celebrities.

TMZ also produces a television show, TMZ on TV , which was launched in 2007 and



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focuses on the same topics, as well as the television programs TMZ Live and TMZ

Sports, and the celebrity-focused game show, South of Wilshire. TMZ maintains a

highly visible and active presence on social media. TMZ has more than six million

followers on Facebook, more than 3.75 million Twitter followers, and more than

two million subscribers to its YouTube channel. TMZ is a corporation organized

and existing under the laws of the State of California and has its principal place of

business in the County of Los Angeles, California. TMZ is an indirect, partially-

owned subsidiary of and is related to WBEI.

4. Plaintiff WBEI is a corporation organized and existing under the laws

of the State of Delaware and has its principal place of business in the County of Los

Angeles, California. WBEI is the owner of all trademarks, including registered

trademarks, incorporating the TMZ name and/or logo, which TMZ uses as a

company related to and under the supervision of WBEI, pursuant to 15 U.S.C. §

1055 and pursuant to license.

5. On information and belief, Starline is a tour company whose business

focuses on transporting passengers on sightseeing bus tours in or around Los

Angeles, California. On information and belief, Starline is a corporation organized

and existing under the laws of the State of California and has its principal place of

business in the County of Los Angeles, California.

JURISDICTION AND VENUE

6. This action arises under the laws of the United States, particularly 15

U.S.C. § 1114, and 15 U.S.C. § 1125(a). This Court has jurisdiction over the federal

claims under 28 U.S.C. § 1331 and § 1338(a) and (b). This Court has supplemental jurisdiction over the state law claims under 28 U.S.C. § 1367(a), those claims being

so related to the federal claims that they form part of the same case or controversy

and derive from a common nucleus of operative fact.



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7. Venue is proper in this district pursuant to 28 U.S.C. § 1391(b) because

Starline resides here and because a substantial part of the events or omissions giving

rise to the claims herein occurred in the Central District of California.

FACTUAL ALLEGATIONS

COMMON TO ALL CAUSES OF ACTION

A. Plaintiffs Are Owners of Distinctive Marks

8. WBEI is the owner of all rights in and to a series of trademarks and

service marks incorporating the TMZ name and logo, both registered and at

common law (collectively, the “TMZ Marks”). WBEI owns a number of federal

trademark registrations of marks that incorporate TMZ, including, without

limitation:

MARK REG. NO. GOODS/SERVICES

TMZ HOLLYWOODTOUR SERCREST ANDCELEBRITY HOT SPOTS

4059766 Conducting sightseeing tours.

TMZ 3399620 Entertainment services in the natureof (a) live-action, comedy, anddrama television series.

TMZ.COM 3240696 Entertainment services in the natureof (a) live-action, comedy, dramaand animated television series; production of (a) live-action,

comedy, drama and animatedmotion picture theatrical films; production of live-action, comedy,drama and animated motion picturetheatrical films; theatrical performances both animated andlive action; internet services providing information via anelectronic global computer network



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in the field of entertainment relatingspecifically to music, movies, andtelevision; providing general

interest news, entertainment, andeducational information via a globalcomputer network; and providinginformation for and actualentertainment via electronic globalcommunications network in thenature of live-action, comedy,drama and animated programs and production of live-action comedy,action and animated motion films

for distribution via a globalcomputer network.

9. WBEI is the owner of the TMZ Marks, and has exclusive control over

their use. No third party is permitted to use the TMZ Marks or any other material

associated with the TMZ Marks without WBEI’s express written consent. TMZ, as

the primary user of the TMZ Marks as a company related to WBEI, has the right to

enter into and/or revoke any license to use the TMZ Marks, in consultation with

WBEI.

10. Plaintiffs have extensively advertised and promoted the TMZ Marks

and have invested substantial time, energy, and resources to develop the TMZ

Marks. Each of the TMZ Marks is inherently arbitrary, distinctive or suggestive, or

has otherwise acquired secondary meaning in the relevant channels of trade to refer

to TMZ. As a result of Plaintiffs’ substantial investments, and the inherent strengthof the TMZ Marks, those marks have become famous to the relevant public,

including, without limitation, in connection with tour services.

B. TMZ and Starline Begin Operation of the TMZ Bus Tour

11. In or around 2010, TMZ partnered with Starline to create a custom,

licensed TMZ-branded bus tour, to be operated by Starline. The TMZ Bus Tour,



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which was launched in 2011, was to take place in customized buses featuring the

TMZ logo and airing video content prepared and owned by TMZ. On information

and belief, the strength and popularity of the TMZ brand, and its association with

celebrities and pop culture, was a primary draw for consumers purchasing tickets to

the TMZ Bus Tour, as opposed to other Hollywood-area bus tours, including but not

limited to other tours operated by Starline. On further information and belief,

Starline licensed the TMZ Marks from TMZ specifically because of the fame of

such marks, and in order to allow its tour service to benefit from Plaintiffs’ goodwill

in the TMZ Marks.

12. The Parties memorialized the terms of their arrangement in the August

2012 TMZ-Starline Agreement. A true and correct copy of the TMZ-Starline

Agreement is attached hereto as Exhibit “A.”

13. Pursuant to the TMZ-Starline Agreement, Starline’s responsibilities

included, among other things, acquiring, building out (subject to TMZ’s approval)

and maintaining the customized buses to be used in the TMZ Bus Tour; maintaining

the buses; hiring and managing bus drivers; and marketing, selling tickets and

collecting payments for the TMZ Bus Tour. (See TMZ-Starline Agreement, Ex. A,

§ 4.) TMZ, on behalf of WBEI, exercised quality control over the customization of

the buses. TMZ was responsible for, among other things: hiring and training all

tour guides; designing the video content, audio content, tour guide scripts and other

materials used on the TMZ Bus Tour; designing the route for each tour bus (subject

to Starline’s approval); installing the audio/visual equipment to be used on the tour

busses; and designing and commissioning the decorative exterior wrap to be used onthe outside of the bus. (See id., § 5.)

14. Net Revenue from the TMZ Bus Tour (defined as gross revenue from

all ticket and charter sales minus specified costs) was to be shared equally between

TMZ and Starline— i.e. fifty percent to TMZ and fifty percent to Starline. (See id .,

§ 3.)



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C. The TMZ-Starline Agreement Provides that TMZ May Terminate the

Agreement for Nonpayment of Revenue and Other Material Breaches

15. The TMZ-Starline Agreement provides for a detailed a monthly

reconciliation process for the parties to determine, and ultimately share, Net

Revenues each month. “On or before the twenty-fifth (25th) day following the

month in which the revenues are earned and costs are incurred,” Starline was to

“provide to TMZ all backup documentation” to support its revenue calculations and

Starline and TMZ were to provide each other with “expense calculations with

supporting documentation.” TMZ then would prepare and provide to Starline a

monthly reconciliation statement, following which Starline had five days to

distribute to TMZ any theretofore unreimbursed portion of shared costs incurred by

TMZ and TMZ’s share of the Net Revenue for the reported month. ( Id ., § 3.5.)

16. Pursuant to the express language of the Agreement, Starline’s failure to

make such payment within the time period designated above constitutes an

“incurable material breach,” giving TMZ the right to “immediately terminate the

[TMZ-Starline] Agreement” for cause, without first providing Starline with notice

and an opportunity to cure. ( Id ., § 8.2 (“For Cause”).)

17. The TMZ-Starline Agreement further requires Starline to deposit all

revenues derived from the TMZ Bus Tour “immediately upon collection” into a

“business checking account solely dedicated” to the TMZ Bus Tour (the “Dedicated

Account”), and to maintain a “minimum account balance of $15,000.00 to minimize

bank fees and expenses.” ( Id., § 3.2.) Starline’s failure to “deposit ninety (90) or

more percent of revenues into the Dedicated Account in any one month immediatelyupon the collection thereof” also constitutes an “incurable material breach” under

the TMZ-Starline Agreement, also giving TMZ an immediate right to terminate the

agreement for cause, without first providing Starline with notice and an opportunity

to cure. ( Id ., § 8.2 (“For Cause”).)



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18. In addition, the TMZ-Starline Agreement grants either party a right to

terminate the agreement for cause in the event of any other “material uncured

breach” that the other party fails to cure on demand. ( Id .)

19. The TMZ-Starline Agreement requires any and all amendments to be in

writing, and expressly provides that “[t]he fact that any party has not previously

insisted upon the other party expressly complying with any provision of [the TMZ-

Starline] Agreement shall not be deemed to be a waiver of the party’s future right to

require compliance in respect thereof and the parties specifically acknowledge and

agree that the prior forbearance in respect of any act, term or conduction shall not

prevent either party from subsequently requiring full and complete compliance

thereafter.” ( Id., § 19).

20. In the event of termination for any reason, all payments owed by

Starline to TMZ immediately become due and Starline is required to “return and

destroy all intellectual property belonging to [TMZ] as directed.” ( Id., § 8.2

(“Effect of Termination”).)

21. In the event of a termination of the TMZ-Starline Agreement for cause,

the non-breaching party is not bound by the non-compete provision contained in the

Agreement. ( Id ., § 8.2 (“For Cause”).)

22. Although the TMZ-Starline Agreement requires the parties to submit

disputes to final and binding arbitration, each party is “entitled to seek injunctive

relief in the state and federal courts of Los Angeles County to prevent or to compel

conduct as it relates to operation of the Bus Tour… .” ( Id., §§ 18.1, 18.2).

D. Starline Repeatedly Breached the TMZ-Starline Agreement, Including

By Failing to Pay TMZ the Revenue Owed to It

23. Starline was required to make payments to TMZ within five days after

receiving a monthly reconciliation statement from TMZ. Starline missed every

payment deadline for the past two years, sometimes by more than four months.

Although the TMZ-Starline Agreement expressly grants TMZ the right to terminate



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the Agreement immediately in the event of late payment, without providing Starline

any opportunity to cure, TMZ in fact sent multiple communications to Starline

demanding payment. Nevertheless, Starline did not cure its payment breach for

November or December 2015 until February 2016, after TMZ had already

terminated the Agreement, and, as of this filing, still has not paid Net Revenues for

December 2015, which are nearly one month late.

24. Starline also breached the TMZ-Starline Agreement by failing to

“deposit ninety (90) or more percent of revenues into the Dedicated Account in any

one month immediately upon the collection thereof.” Indeed, in a meeting at TMZ’s

offices, Starline informed TMZ that it lacked the “capacity” to segregate the TMZ

Bus Tour revenues into the Dedicated Account, and that it was therefore

“impossible” for Starline to timely make payments to TMZ.

E. TMZ Exercises Its Contractual Right to Terminate the Agreement and

Demands That TMZ Cease Use of the TMZ Marks

25. On or about February 11, 2016, in response to Starline’s repeated

breaches of the TMZ-Starline Agreement, including those alleged above, TMZ

provided Starline with written notice of termination for cause (the “Termination

Letter”). A true and correct copy of TMZ’s Termination Letter is attached hereto as

Exhibit “B.” Although the TMZ-Starline Agreement provides for a 60-day wind-

down period in the event of termination for cause, on March 21, 2016, in response to

Starline’s request to maintain the “status quo,” TMZ agreed to extend the wind-

down period for 30 days, so that the termination will be complete on May 11, 2016

(the “Termination Date”).26. In its February 11, 2016 Termination Letter as well as in multiple

subsequent communications, TMZ demanded that Starline cease operation of the

TMZ Bus Tour after the Termination Date and end its use of any TMZ Marks and

other intellectual property belonging to TMZ as of that date. TMZ also has

demanded that Starline immediately cease using the TMZ Marks to advertise bus



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tours taking place after the Termination Date, as Starline has no right to provide any

such tours and its use of TMZ Marks in advertising such tours is therefore

misleading and damaging to TMZ’s reputation and brand.

F. TMZ Refuses to Cease Operation of the TMZ Bus Tour and its Use of

the TMZ Marks

27. Despite TMZ’s express demands, Starline has refused to agree to cease

operations after the Termination Date or to cease using the TMZ Marks in its

advertising. As of the date of this filing, Starline is continuing to sell tickets to the

TMZ Bus Tour for dates after the Termination Date and is continuing to use the

TMZ Marks in advertising the TMZ Bus Tour as taking place after that date.

28. In violation of its contractual obligations, Starline also has failed to

immediately remit payment to TMZ for all sums currently due. Although Starline

finally paid TMZ the sums due and owing as of October and November 2015 after it

received TMZ’s notice of termination on February 11, 2016, it has yet to pay TMZ

the sums due and owing as of December 2015.

29. Despite its multiple breaches of the TMZ-Starline Agreement, each of

which give TMZ the right to terminate under the express language of the agreement,

Starline has taken the position that TMZ’s termination is invalid.

FIRST CAUSE OF ACTION

(Trademark Infringement

Under the Lanham Act, 15 U.S.C. § 1114)

30. Plaintiffs repeat, re-allege, and incorporate each and every allegation of

the foregoing paragraphs, as though fully set forth herein.31. WBEI owns the registered TMZ Marks, including, without limitation,

the following registrations:



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TMZ HOLLYWOODTOUR SERCREST AND

CELEBRITY HOT SPOTS

4059766 Conducting sightseeing tours.

TMZ 3399620 Entertainment services in the natureof (a) live-action, comedy, anddrama television series.

TMZ.COM 3240696 Entertainment services in the natureof (a) live-action, comedy, drama

and animated television series; production of (a) live-action,comedy, drama and animatedmotion picture theatrical films; production of live-action, comedy,drama and animated motion picturetheatrical films; theatrical performances both animated andlive action; internet services

providing information via anelectronic global computer network in the field of entertainment relatingspecifically to music, movies, andtelevision; providing generalinterest news, entertainment, andeducational information via a globalcomputer network; and providinginformation for and actualentertainment via electronic global

communications network in thenature of live-action, comedy,drama and animated programs and production of live-action comedy,action and animated motion filmsfor distribution via a globalcomputer network.



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All of the registered TMZ Marks are on the Principal Register maintained by the

United States Patent and Trademark Office and remain in good standing. WBEI,

including through its related company, TMZ, has the exclusive right to control the

use of the registered TMZ Marks by others.

32. The license TMZ granted to Starline to use the TMZ Marks in the

TMZ-Starline Agreement is expressly limited to use in connection with the

authorized TMZ Bus Tour during the time that the TMZ-Starline Agreement is in

effect. Any license to Starline to use the TMZ Marks expires in the event of

termination of the agreement and Starline has no right to continue to use the TMZ

Marks to advertise services that they have no right to provide— i.e. bus tours taking

place after the Termination Date.

33. Neither WBEI nor TMZ has consented to Starline’s use of the TMZ

Marks to advertise bus services taking place after the Termination Date and, in fact,

explicitly and repeatedly has demanded that Starline cease using the TMZ Marks in

this way. Starline thus is aware that it has no right to continue using the TMZ

Marks to advertise tours taking place after the Termination Date and any continued

use of such marks is therefore intentional, willful, and without regard to WBEI’s

trademark rights.

34. Despite TMZ’s repeated demands, Starline has continued to use the

TMZ Marks in advertising bus tour services taking place after the Termination Date

and has stated that it will continue to use the TMZ Marks in operating unauthorized

bus tours after that date.

35. Starline’s unauthorized use of the TMZ Marks is likely, if not certain,to deceive or cause confusion or mistake among consumers as to the origin,

sponsorship, or approval of the services advertised by Starline and to cause

confusion or mistake as to any affiliation, connection, or association between

Starline and TMZ after the Termination Date.



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36. As a result of Starline’s infringement of the TMZ marks, Plaintiffs have

lost control over the use of the TMZ Marks and will suffer and are suffering other

irreparable harm, the exact nature of which cannot be ascertained at this time and for

which there is no adequate remedy at law.

37. Starline’s infringement is intentional, willful, and in wanton disregard

of Plaintiffs’ rights.

SECOND CAUSE OF ACTION

(Unfair Competition Under the Lanham Act, 15 U.S.C. § 1125(a)


the foregoing paragraphs, as though fully set forth herein.

39. WBEI owns the TMZ Marks, all of which are distinctive and have

acquired secondary meaning. WBEI, including through its related company, TMZ,

has the exclusive right to control the use of the registered TMZ Marks by others.

40. The license TMZ granted to Starline to use the TMZ Marks in the

TMZ-Starline Agreement is expressly limited to use in connection with the

operation of the authorized TMZ Bus Tour during the time that the TMZ-Starline

Agreement is in effect. Any license to Starline to use the TMZ Marks expires in the

event of termination of the agreement and Starline has no right to continue to use the

TMZ Marks to advertise services that they have no right to provide— i.e. bus tours

taking place after the Termination Date.

41. Neither WBEI nor TMZ has consented to Starline’s use of the TMZ

Marks to advertise bus services taking place after the Termination Date and, in fact,

explicitly and repeatedly has demanded that Starline cease using the TMZ Marks inthis way. Starline thus is aware that it has no right to continue using the TMZ

Marks to advertise tours taking place after the Termination Date and any continued

use of such marks is therefore intentional, willful, and without regard to WBEI’s

trademark rights.



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42. Despite TMZ’s repeated demands, Starline has continued to use the

TMZ Marks in advertising bus tour services taking place after the Termination Date

and has stated that it will continue to use the TMZ Marks in operating unauthorized

bus tours after that date.

43. Starline’s unauthorized use of the TMZ Marks is likely, if not certain,

to deceive or cause confusion or mistake among consumers as to the origin,

sponsorship, or approval of the services advertised by Starline and to cause

confusion or mistake as to any affiliation, connection, or association between

Starline and TMZ after the Termination Date.

44. As a result of Starline’s infringement of the TMZ marks, Plaintiffs have

lost control over the use of the TMZ Marks and will suffer and are suffering other

irreparable harm from Starline’s infringement of the TMZ Marks, the exact nature

of which cannot be ascertained at this time and for which there is no adequate

remedy at law.

45. Starline’s infringement is intentional, willful, and in wanton disregard

of Plaintiffs’ rights.

THIRD CAUSE OF ACTION

(False Designation of Origin, False or Misleading Description of Fact,

False or Misleading Representation of Fact,

False Advertising under 15 U.S.C. § 1125(a))



47. The TMZ Marks have become uniquely associated with and identifyWBEI and its related company, TMZ, and its licensed products and services.

48. Starline’s use of the TMZ Marks in advertising bus tours taking place

after the Termination Date, as well as any use of the TMZ Marks in any bus tours

that actually take place after that date, constitutes a false designation of origin, a

false or misleading description of fact or misleading representations of fact.



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49. Starline’s use of the TMZ Marks to advertise bus tours taking place

after the Termination Date misrepresents the nature of Starline’s services as Starline

is not authorized to provide any TMZ-branded tours after the Termination Date.

50. Starline’s continued advertising of TMZ-branded tours taking place

after the Termination Date using the TMZ Marks will reflect adversely on Plaintiffs,

as consumers inevitably will be frustrated and upset when they realize they have

booked tours which they, in fact, will not be able to take because Starline is not

authorized to operate the TMZ Bus Tour after the Termination Date.

51. In addition, in the event that any TMZ-branded tours continue after the

Termination Date, TMZ has no control over the nature and quality of the services

offered by Starline after the Termination Date and any failure, neglect or default in

providing adequate services will reflect adversely on Plaintiffs.

52. TMZ repeatedly has demanded that Starline cease using the TMZ

Marks in advertising tours taking place after the Termination Date. Starline is thus

aware that it has no right to continue using the TMZ Marks in this way and that its

continued use of the marks notwithstanding this knowledge is intentional, willful,

and without regard to TMZ’s rights.

53. As a result of Starline’s unlawful actions, Plaintiffs will suffer and are

suffering irreparable harm, the exact nature of which cannot be ascertained at this

time and for which there is no adequate remedy at law.

FOURTH CAUSE OF ACTION

(Dilution under 15 U.S.C. § 1125(c))

54. Plaintiffs repeat, re-allege, and incorporate each and every allegation ofthe foregoing paragraphs, as though fully set forth herein.

55. As a result of Plaintiffs’ exclusive and long-term use of and investment

in the TMZ Marks, the TMZ Marks have become famous.



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56. Starline’s unlawful use of the TMZ Marks after the Termination Date is

likely to impair the distinctiveness of the TMZ Marks and to harm the reputation of

the TMZ Marks and of TMZ.

57. As a result of Starline’s unlawful actions, Plaintiffs will suffer and are

suffering irreparable harm, the exact nature of which cannot be ascertained at this

time and for which there is no adequate remedy at law.

FIFTH CAUSE OF ACTION

(Trademark Infringement under Common Law)



59. WBEI owns the TMZ Marks, all of which are distinctive and have

acquired secondary meaning. WBEI, including through its related company, TMZ,

has the exclusive right to control the use of the registered TMZ Marks by others.

60. Starline’s unauthorized use of the TMZ Marks in advertising bus tours

taking place after the Termination Date, as well as any use of the TMZ Marks in any

bus tours that actually take place after that date, constitutes a false designation of

origin, a false or misleading description of fact or misleading representations of fact,

is likely, if not certain, to cause confusion or mistake among consumers as to the

origin, sponsorship, or approval of the services offered by Starline and to cause

confusion or mistake as to any affiliation, connection, or association between TMZ

and Starline after the Termination Date.

61. TMZ repeatedly has demanded that Starline cease using the TMZ

Marks in advertising tours taking place after the Termination Date. Starline is thusaware that it has no right to continue using the TMZ Marks in this way and their

continued use of the marks notwithstanding this knowledge is intentional, willful,

and without regard to TMZ’s rights.

62. As a result of Starline’s infringement of the TMZ Marks, Plaintiffs

have lost control over the TMZ Marks and will suffer and are suffering other



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irreparable harm, the exact nature of which cannot be ascertained at this time and for

which there is no adequate remedy at law.

SIXTH CAUSE OF ACTION

(False Advertising Under Cal. Bus. & Prof. Code § 17500)



64. Starline’s unauthorized use of the TMZ Marks in advertising bus tours

taking place after the Termination Date, as well as any use of the TMZ Marks in any

bus tours that actually take place after that date, constitutes unfair, deceptive, untrue,

and misleading advertising.

65. Starline has misled and will continue to mislead the public into

believing that Starline is authorized to conduct TMZ-branded tours after the

Termination Date and that tours conducted by Starline after the Termination Date

are affiliated with, associated with, connected to, or approved by TMZ.

66. Starline’s actions are likely to cause confusion, to cause mistake, or to

deceive as to Starline’s affiliation, connection, or association with TMZ.

67. Starline’s continued advertising of TMZ-branded tours taking place

after the Termination Date using the TMZ Marks will reflect adversely on Plaintiffs,

as consumers inevitably will be frustrated and upset when they realize they have

booked tours which they, in fact, will not be able to take because Starline is not

authorized to operate the TMZ Bus Tour after the Termination Date.

68. In addition, in the event that any TMZ-branded tours continue after the

Termination Date, TMZ has no control over the nature and quality of the servicesoffered by Starline after the Termination Date and any failure, neglect or default in

providing adequate services will reflect adversely on Plaintiffs.

69. TMZ’s untrue and misleading representations were knowingly and

intentionally made.



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70. Plaintiffs will suffer and are suffering irreparable harm from Starline’s

actions, the exact nature and extent of which cannot be ascertained at this time, and

for which there is no adequate remedy at law.

SEVENTH CAUSE OF ACTION

(Unfair Competition under Cal. Bus. & Prof. Code § 17200)



72. Starline’s business practices, as alleged above, violate California’s

Unfair Competition Law, Business & Professions Code § 17200, et. seq.

73. California Business & Professions Code § 17200 prohibits any

unlawful, unfair, or fraudulent business practice. Starline’s business practices are

unlawful, unfair, and/or fraudulent, for at least the following reasons:

(a) Starline has infringed both the registered and unregistered TMZ

Marks, in violation of the Lanham Act, 15 U.S.C. §§ 1114 and 1125(a),

and common law; and

(b) Starline has misled the public into believing that it is authorized

to conduct TMZ-branded bus tours after the Termination Date and that

any tours conducted after the Termination Date are affiliated with,

associated with, connected to, or approved by TMZ, in violation of

California Business & Professions Code § 17500.

74. Starline’s actions have caused, and are likely to cause, consumer

confusion, mistake and deception, and to erode TMZ’s good will. Plaintiffs

therefore have suffered injury in fact and have lost money and/or property as a resultof Starline’s unfair competition.

75. Plaintiffs will suffer and are suffering irreparable harm from Starline’s

actions, the exact nature and extent of which cannot be ascertained at this time, and

for which there is no adequate remedy at law.



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76. Plaintiffs are informed and believe and on that basis allege that

Starline’s conduct is willful, oppressive, fraudulent, and malicious.

EIGHTH CAUSE OF ACTION

(Declaratory Relief)



78. An actual controversy has arisen and now exists between TMZ and

Starline with regard to the propriety of TMZ’s termination of the TMZ-Starline

Agreement. Section 8.2, “For Cause,” of the TMZ-Starline Agreement grants TMZ

an immediate right to terminate the Agreement for cause in the event of Starline’s

failure “to either (1) deposit ninety (90) or more percent of the revenues into the

Dedicated Account in any one month immediately upon collection thereof; or (2)

distribute all undisputed share of revenues owed to TMZ by the date upon which

such distribution is due.” (TMZ-Starline Agreement, Ex. A., § 8.2 (“For Cause”).)

TMZ need not provide Starline an opportunity to cure such breaches. (See id.) In

addition, Section 8.2 of the TMZ-Starline Agreement permits TMZ to terminate the

agreement for cause in the event of any other “material breach” that Starline refuses

to cure on demand. ( Id.) As a result of Starline’s breaches of these provisions as

alleged above, TMZ provided notice of termination to Starline on or about February

11, 2016. Starline, however, has taken the position that TMZ’s termination is

invalid.

79. Plaintiffs desire a judicial declaration that TMZ’s termination of the

TMZ-Starline agreement was proper, that the TMZ-Starline Agreement will beterminated as of the Termination Date, and that Starline has no right to operate the

TMZ Bus Tour or use any TMZ Marks after that date. A declaration of rights is

necessary and appropriate at this time in order that Plaintiffs may make the plans

and commitments necessary for the period following the Termination Date, and



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because no other adequate remedy exists by which the rights of the parties may be

determined.

80. Plaintiffs therefore respectfully request that the Court issue an order

declaring that TMZ’s termination of the TMZ-Starline agreement was proper, that

the TMZ-Starline Agreement will be terminated as of the Termination Date, and that

Starline has no right to operate the TMZ Bus Tour or use any TMZ Marks after that

date.

PRAYER FOR RELIEF

Wherefore, Plaintiffs hereby request that this Court:

A. Enter a temporary and permanent injunction enjoining Starline and its

officers, directors, agents, employees, representatives, and all persons or entities

acting in concert or participation with Starline from using the TMZ Marks, or any

marks substantially similar thereto, in commerce, including, without limitation, to

advertise, market, or operate any bus tours taking place after the Termination Date

of May 11, 2016;

B. Enter a temporary and permanent injunction enjoining Starline and its

officers, directors, agents, employees, representatives, and all persons or entities

acting in concert or participation with Starline from operating, or representing in any

manner that they may operate the TMZ Bus Tour after the Termination Date of May

11, 2016, or that any Starline bus tour operated after that date shares any connection,

affiliation, or association with TMZ;

C. Declare that TMZ’s termination of the TMZ-Starline agreement was

proper, that the TMZ-Starline Agreement will be terminated as of the TerminationDate of May 11, 2016, and that Starline has no right to operate the TMZ Bus Tour

or use any TMZ Marks after that date.

///

///

///



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D. Enter an award of attorneys’ fees and costs; and

E. Award any such other and further relief as this Court deems just and

proper.

DATED: March 23, 2016 CALDWELL LESLIE & PROCTOR, PC

LINDA M. BURROWARWEN R. JOHNSONJULIA J. BREDRUP

By /s/

LINDA M. BURROWAttorneys for Plaintiffs WARNER BROS.ENTERTAINMENT INC. and EHMPRODUCTIONS INC., dba TMZ


Documents

Warner Bros, TMZ v. Starline Tours - complaint.pdf