ROSSBACHER & ASSOCIATES
Henry H. Rossbacher (060260)
James S. Cahill (070353)
David F. Desmond (166670)
445 S. Figueroa St., 24th Floor
Los Angeles, CA 90071
Telephone: (213) 895-6500

DYER DONNELLY
F. James Donnelly
825 Logan St.
Denver, CO 80203-3114
Telephone: (303) 861-3003

LAW OFFICES OF CLIFFORD A. CANTOR
Clifford A. Cantor
627 208th Ave. SE
Redmond, WA 98053-7033
Telephone: (425) 868-7813

Attorneys for Plaintiff and Class Members

SUPERIOR COURT OF THE STATE OF CALIFORNIA
IN AND FOR ORANGE COUNTY

Plaintiff, by his attorneys, brings this action on behalf of himself and all other persons similarly situated. Plaintiff, based on personal knowledge as to those averments pertaining to himself and on information and belief as to all other averments, hereby alleges as follows:

NATURE OF THE CASE

1. Defendant Excalibur Entertainment Inc. ("Excalibur") is a California corporation engaged in national and international retail sales over the Internet, by means of false and misleading advertisements declaring that all of Excalibur's products are "on sale" at less than a fictitious "regular price." Plaintiff is informed and believes and thereon alleges that as a result of Excalibur's advertisements Excalibur reaps millions of dollars in profits by duping consumers worldwide.

JURISDICTION AND VENUE

2. This Court has jurisdiction over all causes of action asserted herein pursuant to the California Constitution, Article VI, §10 as Excalibur is a corporation organized under the laws of the State of California and California Business and Professions Code §17204.

3. Venue is proper in this Court because a substantial portion of the transactions complained of herein occurred in Orange County. Excalibur does most if not all of its business from Orange County. All of the communications complained of herein emanated from California. In addition, Excalibur has received substantial compensation from the solicitation of sales in Orange County as a result of its business activities.

PARTIES

4. Plaintiff is an adult individual residing in Greenwich, Connecticut.

5. Excalibur is a California corporation with its principal place of business located in Fullerton, Orange County, California.

6. The true names and/or capacities, whether individual, corporate, associate or otherwise of defendants DOES 1 through 100, inclusive, and each of them, are unknown to plaintiff, who therefore sues said defendants by such fictitious names. Plaintiff is informed and believes and thereupon alleges that each of the defendants fictitiously named herein as a DOE is legally responsible, negligently or in some other actionable manner, for the events and happenings hereinafter referred to, and thereby proximately caused the injuries and damages to plaintiff as hereinafter alleged. Plaintiff will seek leave of court to amend this complaint and state the true names and/or capacities of said fictitiously named defendants when the same has been ascertained.

7. By taking, approving and ratifying the actions described herein, the defendants conspired with each other during the relevant time period described herein to conduct the wrongdoing alleged herein.

8. Plaintiff is informed and believes and thereupon alleges that at all times mentioned herein, defendants, and each of them, including DOES 1 through 100, inclusive, and each of them, were the agents, servants, employees and/or joint venturers of their co-defendants, and each was, as such, acting within the course, scope and authority of said agency, employment and/or joint venture and was acting with the consent, permission and authorization of each of the remaining defendants, and that each and every defendant, as aforesaid, when acting as a principal, was negligent in the selection and hiring of each and every other defendant as an agent, employee, and/or joint venturer. All actions of each defendant as alleged in the causes of action stated herein were ratified and approved by every other defendant or their officers or managing agents.

GENERAL ALLEGATIONS

9. Excalibur is in the business of adult entertainment. From its offices in Fullerton, California, Excalibur sells and distributes adult videotape movies ("videos"), DVDs, CD ROMs, laser discs, books, adult actress search engines, biographies of pornography stars, and "Sexy XXX Hot Links" to locations throughout most of the United States and the world.

10. Excalibur's main source of advertising and distribution is the Internet. Its channels of distribution are huge. Excalibur claims to be the "World's Largest Mail-Order Distributor of Adult Entertainment Materials." To date, Excalibur claims to have had over eight hundred fifty million visits to its web site.

11. Despite Excalibur's large reach in advertising and distribution, it does most, if not all, of its business from California. All of the communications complained of herein emanated from California.

12. When a prospective purchaser of adult entertainment material visits Excalibur's web site, he or she is offered a menu of choices, including a "Free Catalogue" of videos sold by Excalibur. The catalogue lists over 40,000 videos sold at "Low Discount Prices!"

13. For each video, the catalogue lists its starring cast, rating, stock number, and price. For each and every one of the 40,000-plus videos offered by Excalibur, two prices are listed: a "Regular Price" and a lower "Sale Price." The "Sale Price" is normally six to fourteen dollars less than the "Regular Price."

14. In truth and in fact, the "Sale Price" is not in any manner a reduction in price. The "Sale Price" is actually the unreduced retail price. All of Excalibur's 40,000-plus videos have never been listed by Excalibur for purchase at the "Regular Price." To the contrary, the "Sale Price" is the regular price.

PLAINTIFF JAMPOLE'S TRANSACTION

15. In response to Excalibur's advertising, plaintiff purchased a video from Excalibur entitled "Pandora: An Erotic Trilogy--Brothers Grime Adult Cartoon #03."

16. Excalibur listed the video that plaintiff purchased at a "Regular Price" of $18.95 and "Sale Price" of $9.95. Based on Excalibur's advertising, plaintiff ordered the video believing it to be on sale.

17. The video was not on sale and, in fact, had never been sold by Excalibur at the "Regular Price."

CLASS ACTION ALLEGATIONS

18. Plaintiff brings this matter individually and on behalf of a class of all persons who made purchases from Excalibur supposedly at a sale price or discounted price, and whose claims are not barred by an applicable statute of limitations. Excluded from the class are Excalibur's directors, officers, employees, and their immediate family members.

19. This action satisfies all the requirements of California Code of Civil Procedure section 382.

20. Membership in this class is ascertainable from Excalibur's records.

21. Plaintiff is informed and believes and thereon alleges that the class has at least thousands of members in diverse geographic locations and therefore is so numerous and dispersed that joinder is impractical.

22. There is a well-defined community of interest among the class members, including but not limited to an interest in not being subjected to Excalibur's unlawful, unfair and/or deceptive advertisements.

23. Questions of law or fact common to the class predominate over individual questions.

24. Such common questions include but are not limited to the following:

a. Whether Excalibur has a practice of listing a regular price and sale or discounted price for adult entertainment items when Excalibur never sells those items at the regular price;

b. Whether that practice is unlawful, unfair or fraudulent;

c. Whether that practice constitutes unfair, deceptive, untrue or misleading advertising;

d. Whether that practice constitutes the making of false or misleading statements of fact concerning reasons for, existence of or amounts of price reductions;

e. Whether Excalibur's practice violates California's unfair competition and/or consumer protection laws, including but not limited to California Business and Professions Code section 17200 et seq. and/or 17500 et seq.;

f. Whether the plaintiff and the class are entitled to injunctive relief;

g. Whether plaintiff and the class are entitled to restitution, compensatory and punitive damages, expenses of litigation, attorneys' fees and prejudgment interest.

25. Plaintiff Jampole is a member of the class. Plaintiff Jampole's claim is typical if not identical to the claims of the other class members. The only difference is the monetary impact on each member, which will be readily determinable from Excalibur's records and does not bar class certification.

26. Plaintiff Jampole will fairly and adequately protect the interests of members of the class and has retained attorneys experienced in the prosecution of class action litigation. Neither plaintiff nor his counsel have any conflict in undertaking this representation. In addition, plaintiff is represented by counsel who are experienced and competent in the prosecution and complex and class litigation.

FIRST CAUSE OF ACTION

Unlawful, Unfair and Deceptive Business Practices
in Violation of California Business and Professions Code
Section 17200, et seq.

(Against All Defendants)

27. Plaintiff incorporates and realleges all of the allegations of paragraphs 1 through 26, inclusive, as if fully set forth hereat.

28. California Business and Professions Code §17200 prohibits acts of unfair competition, which shall mean and include any "unlawful . . . business act or practice." By violating the statutes set forth herein, defendants have violated California Business and Professions Code Section 17200:

a. The conduct of Excalibur of listing videos and other items at sale prices when in fact Excalibur has not reduced the price is unlawful, unfair or fraudulent, and/or constitutes unfair, deceptive, untrue or misleading advertising within the meaning of California Business and Professions Code section 17200.

b. Such advertising is also untrue or misleading and Excalibur knows or in the exercise of reasonable care should know that such advertising is untrue or misleading within the meaning of California Business and Professions Code section 17500. Excalibur's actions have a likelihood of deceiving members of the public and occur in the ordinary day-to-day conduct of its business.

c. Excalibur's conduct also includes making false or misleading statements of fact concerning the reasons for, existence of or amounts of price reductions, which is illegal under California Civil Code section 1770(a)(13) and therefore a violation of California Business and Professions Code section 17200.

29. Excalibur acquired funds from plaintiff and the class by means of the practices alleged herein.

30. Pursuant to California Business and Professions Code sections 17203 and 17535, plaintiff and the class are entitled to an injunction to prevent Excalibur from engaging in the practice complained of herein and an order of damages and/or restitution in the amount of all funds that Excalibur acquired by means of its unlawful, unfair or fraudulent business acts or practices and/or unfair, deceptive, untrue or misleading advertising, including prejudgment interest, expenses of this suit, and reasonable attorney fees.

31. Excalibur's misrepresentations and omissions of the material facts, set forth more fully elsewhere in this complaint, defrauded and misled plaintiff, and the class, in violation of the Civil Code as well as principles of common law.

32. California Business and Professions Code §17200 also prohibits acts of unfair competition, which includes any "unfair . . . business act or practice." As detailed in the preceding paragraphs, Excalibur engaged in a pattern or practice involving fraudulent and deceptive schemes to sell videos to plaintiff and the class by the use of uniform misrepresentations and nondisclosure made to plaintiff, and the class. The conduct complained of in this complaint offends public policy, as set forth more fully in statutes and common law specifically alleged in this complaint. Moreover, Excalibur's practices were unethical, oppressive, and unscrupulous. Excalibur's conduct caused and continues to cause substantial injury to consumers, including plaintiff and the class. The justifications for Excalibur's wrongful conduct were and are outweighed by the adverse effects of such conduct. Finally, there were reasonably available alternatives to Excalibur, other than through the fraudulent and wrongful schemes described herein. As a result, Excalibur engaged in unfair business practices, prohibited by Business and Professions Code Section 17200, et seq.

33. California Business and Professions Code §17200 also prohibits acts of unfair competition which shall mean and include any "fraudulent business act or practice." Excalibur's misrepresentations and nondisclosures, as more fully set forth elsewhere in this complaint, were misleading and tended to deceive the consuming public. Excalibur's fraudulent conduct constitutes a fraudulent business act or practice within the meaning of Business and Professions Code §17200, et seq.

34. The misrepresentations and nondisclosures by Excalibur of the material facts in the sale of videos, the benefits of which were not as represented in any manner, constitute unfair competition and unfair, deceptive, untrue or misleading advertising within the meaning of Business and Professions Code §17500, et seq., as set forth more fully throughout this complaint. The advertisements are likely to deceive and continue to deceive the consuming public. Excalibur either knew, recklessly disregarded or reasonably should have known that such advertising was untrue and/or misleading. Such conduct also constitutes a violation of Business and Professions Code §17200, et seq.

35. Plaintiff is informed and believes and thereon alleges that the above-described acts conducted by Excalibur still continue to be a threat to the class.

36. As a result of the foregoing conduct, defendants have been and will be unjustly enriched at the expense of plaintiff, and the class. Specifically, Excalibur has been unjustly enriched by the receipt of millions of dollars in Internet sales of videos as a result of their solicitation of such through the conduct described in this complaint.

37. Plaintiff reserves the right to allege other violations of law which constitute other unlawful business acts or practices.

38. For the foregoing reasons, the class is therefore entitled to the relief described below.

39. Pursuant to Business and Professions Code Sections 17203 and 17535, plaintiff, and the class seek an order of this Court ordering defendants to immediately cease such acts of unfair competition and enjoining Excalibur from continuing to falsely advertise or conduct business via the unlawful, unfair or fraudulent business acts and practices and untrue and misleading advertising complained of herein, and from failing to fully disclose the true nature of its misrepresentations, as well as from failing to engage in a corrective advertising campaign or program. Plaintiff and the class additionally request an order disgorging Excalibur's ill-gotten gains and also awarding plaintiff, the class and full restitution of all monies wrongfully acquired by Excalibur by means of such acts of unfair competition and false advertising, plus interest and attorneys' fees pursuant to, inter alia, Code of Civil Procedure Section 1021.5, so as to restore any and all monies to plaintiff, and the class, which were acquired and obtained by means such as unfair competition and untrue and misleading advertising, and which ill-gotten gains are still retained by defendants.

SECOND CAUSE OF ACTION

False and Misleading Advertising In Violation of
California Business & Professions Code Sections 17200 and 17500

(Against All Defendants)

40. Plaintiff incorporates and realleges all of the allegations of paragraphs 1 through 39, inclusive, as if fully set forth hereat.

41. Excalibur stated and represented to plaintiff, and the class, of the public, that videos and other items were offered at sale prices when in fact Excalibur had not reduced the price. Excalibur failed to disclose material information relating to the transactions.

42. Excalibur violated Business and Professions Code Section 17500, as these statements and representations, made solely to induce plaintiff and the class to purchase videos, were untrue and misleading when made, and Excalibur knew or should have known that these statements were untrue or misleading when made.

43. The above-described false and misleading advertising conducted by Excalibur continues to this day to present a threat to plaintiff, and the class in that Excalibur has failed and refused to publicly acknowledge its wrongdoing or to publicly issue a disclaimer to actual and potential purchasers.

44. As a result of the conduct described above, Excalibur has been and will be unjustly enriched at the expense of plaintiff, and the class. Specifically, Excalibur has been unjustly enriched by the receipt of millions of dollars in video sales, both in California and throughout the United States, which are promoted and sold through advertisements which affirmatively misrepresent, either directly or by implication, that videos are offered at sale prices but which conceal the adverse facts described throughout this complaint from plaintiff, and the class.

45. Pursuant to Business and Professions Code Sections 17203 and 17535, plaintiff, and the class seek an order of this Court ordering Excalibur to immediately cease such acts of unfair competition and enjoining defendants from continuing to falsely advertise or conduct business via the unlawful, unfair or fraudulent business acts and practices and false and misleading advertising complained of herein and from failing to fully disclose the true nature of Excalibur's misrepresentations. Plaintiff and the class also seek injunctive relief prohibiting defendants from continuing to conduct Internet sales of videos without first commencing a corrective advertising campaign to correct misperceptions created by Excalibur in the market as a result of its fraudulent campaign. Plaintiff and the class additionally request an order disgorging Excalibur's ill-gotten gains and awarding plaintiff, and the class full restitution of all monies wrongfully acquired by Excalibur by means of such acts of unfair competition and false advertising, plus interest and attorneys' fees pursuant to, inter alia, Code of Civil Procedure Section 1021.5, so as to restore any and all monies to plaintiff, and the class which were acquired and obtained by means of such unfair competition and false advertising, and which ill-gotten gains are still retained by Excalibur. Plaintiff and the class additionally request that such funds be impounded by the Court or that an asset freeze or trust be imposed upon such revenues and profits to avoid dissipation and/or fraudulent transfers or concealment of such monies by Excalibur. Plaintiff, and the class may be irreparably harmed and/or denied an effective and complete remedy if such an order is not granted.

46. By reason of the foregoing, plaintiff and the class have been irreparably harmed and damaged in an amount to be determined at the trial of this action.

THIRD CAUSE OF ACTION

Unjust Enrichment

(Against All Defendants)

47. Plaintiff incorporates and realleges all of the allegations of paragraphs 1 through 47, inclusive, as if fully set forth hereat.

48. Excalibur received from plaintiff and the class millions of dollars from Internet video sales. The videos were not sold at sale prices.

49. As a result, Excalibur will be unjustly enriched if it is allowed to retain such funds. Plaintiff and the class are entitled to restitution of all monies wrongfully obtained by Excalibur.

50. Plaintiff and the class have no adequate remedy at law.

51. By reason of the foregoing, plaintiff and the class
have been damaged in an amount to be determined at the trial of this action.

PRAYER FOR RELIEF

WHEREFORE, plaintiff prays that the Court grant the following relief:

1. For an order certifying that this action may be maintained as a nationwide class action and directing that reasonable notice be given to each class member;

2. For a decree that the wrongful business acts and practices alleged herein against defendants violate the California Unfair Business Practices Act, Business & Professions Code Section 17200 et seq., inter alia;

3. For compensatory damages sustained by plaintiff and each class member plus pre- and post-judgment interest as provided by law in an amount according to proof at time of trial;

4. For a permanent injunction enjoining defendants and each of them, their officers, directors, employees, agents, partners, representatives, successors, assignees and transferees, and any and all persons acting in concert or in participation with them from directly or indirectly committing the unlawful, unfair and deceptive business acts and practices complained of herein;

5. For an order directing restitution or disgorgement of all improperly collected sums, including interest thereon, by Excalibur and imposition of a constructive trust over such amounts for the benefit of plaintiff and the members of the class.

6. For an award to plaintiff and the class members of their costs and expenses incurred in this action including reasonable attorneys' fees and expert fees as provided by law; and

7. For such other and further relief as the court may deem necessary and proper.

DATED: August 3, 1998

ROSSBACHER & ASSOCIATES
Henry H. Rossbacher
James S. Cahill
David F. Desmond

by_____________________________
    James S. Cahill

F. James Donnelly
DYER DONNELLY

Clifford A. Cantor
LAW OFFICES OF CLIFFORD A. CANTOR

Attorneys for Plaintiff and Class Members

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