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TMZ wins legal battle with Starline Tours, deputies raid tour bus offices to collect cash

TMZ wins legal battle with Starline Tours, deputies raid tour bus offices to collect cash
Tourists head out on a TMZ Hollywood tour in 2012. TMZ and Starline Tours are fighting in court over proceeds from that joint operation. (Mel Melcon/Los Angeles Times)

As divorces go, this one is ugly even by Tinseltown standards: Celebrity news operation TMZ called in Los Angeles sheriff's deputies to raid the Hollywood Boulevard offices of former partner Starline Tours to collect on a court judgment won by TMZ.

The raid is the latest chapter in the legal feud between TMZ and Starline, a sightseeing tour business with about 150 buses and a history that dates back to the 1960s.

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As tourists watched Wednesday morning, deputies performed a "till tap" to collect $2,100 in cash from Starline.

"It's unfortunate we had to involve law enforcement, but it was the only way to get Starline to pay at least some of what it has owed us for a long time," said Jason Beckerman, legal counsel for TMZ.

The two companies joined forces six years ago to operate a celebrity tour that would take tourists to the places where celebrities eat, drink and create headline-grabbing news. TMZ would supply tour guides, along with the celebrity news and gossip, while Starline would provide the buses.

But the two businesses split up this year in a feud over how to share the proceeds.

In addition to that dispute, the two companies also fought over who should pay for the legal costs of defending the celebrity tour operation against accusations of labor law violations by former bus drivers.

TMZ argued in legal papers that Starline refused to take responsibility for defending TMZ in the lawsuit even though the partnership agreement called for Starline to defend TMZ.

An arbitrator ruled that Starline should have been responsible for the legal costs and ordered the tour bus company to pay $201,000 in legal fees and other costs incurred by TMZ to defend itself in the labor law dispute.

To collect on the money, TMZ put a levy on a bank account of Starline Tours and asked deputies to collect cash from the tour operator's headquarters behind the TCL Chinese Theatre.

Photos of the raid show two sheriff's deputies entering the Starline offices and later leaving carrying a plastic bag, presumably filled with cash, as tourists look on.

Starline Tours Chief Executive Kami Farhadi said TMZ didn't need to turn to the sheriff's office because Starline was ready to pay the entire judgment with a cashier's check.

"I think they are trying to create something for their show," he said.

The till tap doesn't resolve the original legal battle over the revenues collected by Starline during the joint tour bus operation.

That rift began about two years ago when Starline failed to split the revenues and pay TMZ its share in a timely manner over the course of two years, according to a lawsuit filed in March by TMZ against Starline.

As a result of the late payments, the suit said, TMZ notified Starline on Feb. 11 that it was giving Starline a 60-day notice to end the partnership. But Starline continued to sell tickets for the TMZ tour beyond the 60-day period, the TMZ lawsuit alleged.

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Lawyers for Starline argued that TMZ failed to show "good cause" to end the contract and therefore triggered a "non-competition clause" in the agreement, which bars TMZ from operating a tour bus business for at least two years.

Starline has since stopped operating buses for TMZ, which has teamed up with a local livery service to run its sightseeing tours.

To read more about the travel and tourism industries, follow @hugomartin on Twitter.

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