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Beverly Hills Law Corp., PC

Sagar Pankh, Esq. (SBN 282655)

433 N. Camden Drive, 6th Floor

FILED

Beverly Hills, CA 90210

Telephone:
(310)887-1338
Facsimile:
(310)982-2603

Superior Court of California

County of Los Angeles

MOV 2 4 2QH

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Attorneys for
ior Plaintiff,
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GoDigital Records, LLC r\Tc^ ^(V\l (J&W^ V^lAt0^

Sherri R. Carter, Executive Officer/Clerk

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SUPERIOR COURT OF THE STATE OF CALIFORNIA

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FOR THE COUNTY OF LOS ANGELES

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Case No

GODIGITAL RECORDS, LLC, a California

limited liability company.

BC 5 6 3 996

COMPLAINT FOR:

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Plaintiff,
1.

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2.

VIOLATION OF BUSINESS AND

Delaware corporation; AND DOES 1-20,

PROFESSIONS CODE 17200

3. NEGLIGENT INTERFERENCE WITH
PROSPECTIVE ECONOMIC

Defendants.
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ADVANTAGE
4.

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INTENTIONAL INTERFERENCE
WITH PROSPECTIVE ECONOMIC
ADVANTAGE

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UNFAIR BUSINESS PRACTICES IN

UNIVERSAL MUSIC GROUP, INC., a

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INTENTIONAL INTERFERENCE
WITH CONTRACTUAL RELATIONS

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Plaintiff, GODIGITAL RECORDS, LLC ("Plaintiff') complains and alleges upon

information and belief as follows:

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GENERAL ALLEGATIONS

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Plaintiff is a California limited liability company, authorized and doing biii&i|ls

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corporation, authorized and doing business in the County of Los Angeles, State ofCalifornia. ~

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Defendant UNIVERSAL MUSIC GROUP ("Defendant") is v Delaw&er x

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in the County of Los Angeles, State of California.

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Plaintiff is ignorant of the true names and capacities, whether individual- ~

corporate, associate, or otherwise, of Defendants sued herein as DOES 1through 2jp^inclusive?

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COMPLAINT FOR DAMAGES

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and, therefore, sues these Defendants by such fictitious names.

complaint to allege their true names and capacities when ascertained. Plaintiff is informed and

believes and thereon alleges that each of these fictitiously named Defendants is responsible in

some manner for the occurrences herein alleged, and that Plaintiffs damages, as herein alleged,

were proximatelycaused by such Defendants.

4.

Plaintiff will amend this

Plaintiff is informed, believes and thereupon alleges that Defendants, including

those sued herein as DOES 1 through 20, inclusive, and each of them, were and are the tenants,

agents, employees, officers, directors, principals, managing agents, managers, members,

subsidiaries, affiliates, joint ventures, partners, subcontractors, alter egos, co-conspirators or

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representatives of each other with respect to the events and transactions alleged herein. Plaintiff

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is informed, believes and thereupon alleges that Defendants, including those sued herein as

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DOES 1 through 20, inclusive, and each of them, were involved in the acts, transactions, and

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omissions alleged herein below and are responsible in whole or in part for the injuries and

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damages herein alleged. Plaintiff is informed, believes and thereupon allege that, at all times

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herein mentioned, each of the Defendants, including those named herein as DOES 1 through 20,

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in addition to action forherself and itself at all material times was acting as the agent, servant,

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employee and representative of each of the other Defendants, and in doing the things herein after

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alleged, was acting within the course and scope of such relationship and with the permission,

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consent and ratification of each and every other Defendant. All of the references made herein
below to Defendants,and each of them, include a referenceto the fictitiously named Defendants.

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Defendants DOES 1 through 20 identified in the complaint are fictitiously named Defendants,

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and Plaintiff reserves the right to amend this complaint to identify those parties true names once

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discovered.

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COMPLAINT FOR DAMAGES

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FACTUAL ALLEGATIONS

COMMON TO ALL CAUSES OF ACTION

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Plaintiff is a digital media company in the business of helping its clients identify,

track, and monetize through advertising user generated uses of their content that are posted on

social media websites.The primary venue for this is YouTube.com ("YouTube").

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Plaintiff uses its services to monetize music compositions, sound recordings, and

video for its clients.

7.

On or about May 11, 2011, Plaintiff entered into an agreement (the "AdShare

Agreement") to provide this service to El Cartel Records ("E! Cartel").

8.

The Adshare Agreement was for the benefit of one of El Cartel's artists, and its

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primary owner, Raymond Luis Ayala Rodriguez, professionally known as Daddy Yankee

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("Daddy Yankee").

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9.

The Adshare Agreement provided that El Cartel was to license to Plaintiff EI

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Cartel's catalog of audio and video recordings and music compositions ("Content"). Plaintiff

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would then monitor YouTube for any Content uploaded by any third-party user of YouTube.

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-' -i'O:Plaintiff would then sub-license to-YouTube-the rightto continue to exhibit this

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third-party uploadedContent in exchange for the right to participate in the sale of advertisements

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on the website pages where the Content is displayed.

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The revenue generated from these advertisements would be split between Plaintiff

and El Cartel in accordance with the terms of the AdShare Agreement.

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Most importantly, the AdShare Agreement provided that Plaintiffs rights would

be exclusive with respect to any Content on YouTube.

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Upon execution of the AdShare Agreement, Plaintiff began licensing the Content

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on YouTube on behalf of El Cartel and Daddy Yankee and started collecting and dividing

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revenue received. Thus, Plaintiffs rights to the Content were exclusive.

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14.

In or about March 2012, EMI Records Ltd, (whose rights were assigned to

Defendant via merger) entered into a distribution and license agreement with El Cartel by which
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COMPLAINT FOR DAMAGES

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Defendant was purportedly given an exclusive license to distribute certain El Cartel master

sound and audiovisual recordings subject to a carve-out specifically excluding YouTube.

15.

Nevertheless, shortly after entering into the distribution and license agreement

with El Cartel, Defendant began asserting claims to and collecting revenue from advertisements

placed on website pages on YouTube for the Content that Plaintiff had already been exclusively

licensing and monetizing for ninemonths.

16.

As El Cartel had already granted the exclusive rights to exploit the Content on

YouTube to Plaintiff in May 2011^ El Cartel had no ability to grant the same exclusive rights to

exploit the Content on YouTube to Defendant.

17.

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Plaintiff brought this to the attention of Defendant numerous times, explaining

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that Plaintiffs rights under the AdShare Agreement Plaintiff had with El Cartel superseded any

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contract that Defendant made with El Cartel with regards to licensing the Content on YouTube.

18.

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Plaintiff even went so far as to provide Defendant with a copy of the Adshare

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Agreement in or about November 2013, so Defendant could seeforitselfthedate of execution of

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the Adshare Agreement, what Plaintiffs rights were under the Adshare Agreement, and the fact

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thatDefendantwas violating theAdshare Agreement.

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Defendant was informed that by improperly asserting claims to Content that itdid

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not have the right to license, and that were already being licensed on YouTube by Plaintiff,

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Defendant was directly preventing Plaintiff from collecting revenue pursuant to the Adshare

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Agreement.

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As a result of Defendant's actions, Plaintiff has suffered a tremendous loss of

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revenue and has been unable to assert the copyright rights to the Content that was exclusively

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granted to it by El Cartel prior to any dealings El Cartel had with Defendant.

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21.

Plaintiff has never granted any license, permission, authorization, or consent to

Defendant to use or exploit any ofthe copyrighted Content that has been exclusively licensed to

it

Plaintiff.

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COMPLAINT FOR DAMAGES

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FIRST CAUSE OF ACTION

(Intentional Interference With Contractual Relations Against AH Defendants)

22.

23.

In or about May 2011, Plaintiff signed the AdShare Agreement with El Cartel,

giving Plaintiffthe exclusive right to license the Content on YouTube.

24.

Plaintiff adopts and incorporates each of the foregoing paragraphs by reference as

though fully set forth herein.

Defendant subsequently attempted to license the Content on YouTube, harming

Plaintiffs rights under the AdShare Agreement with El Cartel, which it was aware of.

25.

Defendant knew and/or was substantially certain that by wrongfully licensing the

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Content on YouTube, Plaintiff would suffer severe and extensive economic losses as a result of

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Defendant directly interfering with the AdShare Agreement between Plaintiffand El Cartel.
26.

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As a direct and proximate result of the aforementioned conduct of Defendant,

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Plaintiff has been damaged as it suffered economic, special and consequential damage in an

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amount to be determined at trial.

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SECOND CAUSE OF ACTION

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(Unfair Competition Against Ail Defendants)"--.->-.-v;s.^,;..-,

Plaintiff adopts and incorporates each of the foregoing paragraphs by reference as

though fully set forth herein.

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Defendant has engaged in unfair competition within the meaning of California

Business and Professions Code 17200 etseq. because Defendant's business acts and practices
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are and were unlawful and unfair as herein alleged. Plaintiff was injured by Defendant's

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unlawful business acts and suffered anactual loss of money as a result of those acts.

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Specifically, Defendant directly interfered with the revenue that Plaintiff was collecting from its

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licensing of the Content on YouTube by making its own claims to Plaintiffs exclusive nglits to

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collect this revenue.

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COMPLAINT FOR DAMAGES

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Defendant's business practices, and each of them, are also unfair because they

offend established public policy, are immoral, oppressive, unscrupulous, and/or substantially

injurious to businesses such as Plaintiff.

30.

Plaintiffis informed and believe that Defendant's herein-alleged conduct violates

various other ethical standards, community fairness standards, laws, regulations, statutes, and/or

common law duties owed by Defendant to theconsuming public.

31.

As a result of Defendant's wrongful conduct, Plaintiff has incurred and continues

to incur expenses and attorneys' fees and seeks an award ofsame in an amount subject to proof

at the appropriatetime.

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THIRD CAUSE OF ACTION

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(Negligent Interference With Prospective Economic Relations Against AllDefendants)

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32.

Plaintiff adopts and incorporates each of the foregoing paragraphs by reference as

though fully set forth herein.

33.

In or about May 2011, Plaintiff signed the AdShare Agreement with El Cartel,

giving Plaintiffthe exclusive right tolicense the Content onYouTube.

.~^,,34.;,.~.,. Defendan-t-subsequently attempted to license the-Contenroti-YouTube, harming''

Plaintiffs rights under the AdShare Agreement with El Cartel, which itwas aware of.
35.

The AdShare Agreement between Plaintiff and El Cartel created an economic

relationship between Plaintiffand El Cartel.

36.

This relationship was to provide Plaintiff with revenue generated from its

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licensing of the Content on YouTube in exchange for the placement of advertisements on the

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website pages where the Content was displayed. Plaintiff was to receive revenue from these

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advertisements.

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Plaintiff brought to Defendant's attention that Defendant was attempting to

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license Content on YouTube that was already exclusively licensed to Plaintiff and was

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generating advertisement revenue for Plaintiff. Thus, Defendant was onnotice that if itdid not

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COMPLAINT FOR DAMAGES

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stop licensing the Content on YouTube and did not stop asserting claims to it, it would be
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interfering with Plaintiffs relationship with El Cartel causing Plaintiff to lose out on substantial

revenue.

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38.

Defendant was negligent by failing to stop licensing the Content on YouTube

even afterbeing put on notice by Plaintiff numerous times.

39.

This resulted in monetary damages to Plaintiff, as Plaintiffs revenue generated

from licensing the Content on YouTube was and continues to be greatly reduced due to

Defendant making claims to the same Content and deriving advertising revenue from the same

Content.

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40.

Defendant's actions and inactions led to Plaintiff losing out on the full economic

benefit that was to be reasonably expected from its economic relationship with El Cartel.
41.

As a direct and proximate result of the aforementioned conduct of Defendant,

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Plaintiff has been damaged as itsuffered economic, special and consequential damage in amount

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to be determined at trial.

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FOURTH CAUSE OF ACTION

'(IntetionalTnterferencc With Prospective-EconomicRelatiorisAgainst AIIDefendants)

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Plaintiff adopts and incorporates each ofthe foregoing paragraphs by reference as

though fully set forth herein.

43.

In or about May 2011, Plaintiff signed the AdShare Agreement with El Cartel,

giving Plaintiff the exclusive right to license theContent on YouTube.

44.

This relationship was to provide Plaintiff with revenue generated from its

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licensing of the Content on YouTube in exchange for the placement of advertisements on the

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website pages where the Content was displayed. Plaintiff was to receive revenue from these

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advertisements.

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Plaintiff brought to Defendant's attention that Defendant was attempting to

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license Content on YouTube that was already exclusively licensed to Plaintiff and was

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generating advertisement revenue for Plaintiff. Thus, Defendant was on notice that if it did not

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,___

COMPLAINT FORDAMAGES

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stop licensing the Content on YouTube and did not stop asserting claims to it, it would be
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interfering with Plaintiffs relationship with El Cartel causing Plaintiff to lose out on substantial

revenue.

46.

Defendant intentionally licensed the Content on YouTube even after being put on

notice by Plaintiff numerous times.

47.

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This resulted in monetary damages to Plaintiff, as Plaintiffs revenue generated

from licensing the Content on YouTube was and continues to be greatly reduced due to

Defendant making claims to the same Content and deriving advertising revenue from the same

Content.

48.

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Defendant's intentional actions led to Plaintiff losing out on the full economic

benefit that was to be reasonablyexpected from its economic relationship with El Cartel.

II

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As a direct and proximate result of the aforementioned intentional conduct of

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Defendant, Plaintiff has been damaged as it suffered economic, special and consequential

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damage in amount to be determined at trial.

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juiv-*

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- PRAYER FOR JUDGMENT-- - *-""--

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WHEREFORE, Plaintiff prays that this Court enter judgment in their favor and against

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Defendants, as follows:

1. For general damages in an amount to be proven at trial, but in an amount exceeding the

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minimum jurisdictional limit of this Court;

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2. For restitutionary damages in an amount to be proven at trial;

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3. For special and consequentialdamages in a sum accordingto proof at the time of trial;
4. For interest according to law;
5. For reasonable attorneys' fees pursuant to Code of Civil Procedure 1021.5, or other

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applicable law; and

6. For such other and further relief as this Court deems just and proper.

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COMPLAINT FOR DAMAGES

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DEMAND FOR JURY TRIAL

Plaintiff hereby demands a trial byjuryin this action.

Respectfully Submitted,

Dated: 11/24/2014
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BEVERLY HILLS LAW CORP., PC

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By:

IPbJt^
SagarParikh
Attorney for Plaintiff,
GODIGITAL RECORDS, LLC

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COMPLAINT FOR DAMAGES

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