Ryan and Luke head back to the Mermaid Inn to retrieve Ryan's watch. On their way out, they catch Luke and Julie kissing. The next day, Summer and Marissa are walking on the beach and run into the star of their favorite show, The Valley. He invites them to a party that night in L.A.
Ryan confronts Luke at school and orders him to end the relationship with Julie. Meanwhile, Jimmy and Sandy take Caleb on as a silent partner in the restaurant and Julie as the interior designer. They decide to host a party with the chef of The Lighthouse cooking for many of Newport's most well-established people.
Despite Marissa's desire to have some independence, Ryan convinces her to go to L.A. so Luke can end things with her mother. At the party, Summer heads off to a car to watch special episode of The Valley with the show's star, while Seth flirts with the pointless Paris Hilton and they all find Hailey working as a dancer. Ryan calls Sandy to inform her of Hailey's profession and Jimmy leaves the dinner partly in protest to Caleb's ideas and partly to rescue Hailey.
Back at the party, Summer realizes how lame They Valley star is and Seth takes her away. Ryan, Marissa and Hailey get thrown out of the club, just as Jimmy arrives to take Hailey back home. He delivers her back to the Cohens and pretends as though he just picked her up at the airport. In the poolhouse, the real drama is about to begin as Marissa overhears Luke as he tells Ryan that he has "stopped having sex with Julie Cooper." That's not the sort of thing any daughter likes to hear.
"The L.A." File: