Amtote International Inc. v. Kentucky Downs, LLC et al

Filing 187

MEMORANDUM OPINION AND ORDER by Magistrate Judge H. Brent Brennenstuhl on 12/8/2017. AmTote's motion to compel (DN 151 SEALED and DN 152 ) is GRANTED IN PART AND DENIED IN PART. Defendants' motion to compel (DN 153 SEALED and DN 154 ) is DENIED. (See Order for specifics.) cc: Counsel (CDR)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
BOWLING GREEN DIVISION
CIVIL ACTION NO. 1:15-CV-0047-GNS

AMTOTE INTERNATIONAL INC.

PLAINTIFF

VS.

KENTUCKY DOWNS, LLC ET AL

DEFENDANTS

MEMORANDUM OPINION
AND ORDER
INTRODUCTION
This is a discovery dispute that has resulted in cross motions to compel by Plaintiff
AmTote International, Inc. and Defendants Kentucky Downs, LLC, Exacta Systems, LLC, and
Magellan Gaming, LLC. Plaintiff's motion to compel is located at (DN 151 SEALED and DN
152). Defendants' response is at (DN 163 SEALED and DN 165), and Plaintiffs' reply is at (DN
172 and DN 173 SEALED).

Defendants' motion is at (DN 153 SEALED and DN 154).

Plaintiffs' response is at (DN 161 and DN 162 SEALED), and Defendants' reply is at (DN 170).
Both motions are ripe for review. For the reasons set forth below, AmTote's motion is granted in
part, and Defendant's motion is denied.
Discussion
A. Background
This dispute arises out of the Defendants' alleged misappropriation of AmTote's
confidential and proprietary information. The action contains claims of breach of contract,

tortious interference with an existing contract, and actual and threatened misappropriation of
trade secrets. AmTote filed the current version of its complaint, the third amended complaint, on
May 5, 2017 (DN 142 SEALED).
At the time relevant to the dispute, AmTote provided totalisator services1 to Defendant
Kentucky Downs for its pari-mutuel wagering operation.2 A totalisator functions to calculate the
odds of a given historical pari-mutuel horse race and display a ticket of the odds to the end user
(DN 142 SEALED at PageID # 3497 ¶ 17). AmTote and Kentucky Downs entered into a
Totalisator Service Agreement ("TSA") on November 10, 2011 (Id. at PageID # 3500 ¶ 31). The
TSA contains language intended to protect AmTote's proprietary information, as well as the
proprietary information of third parties who contract with AmTote. First, the definitions section
states as follows:
"AmTote Technology" — means AmTote's (including any related
parent and affiliate corporations) proprietary technology,
including, software tools, hardware designs, algorithms, software
(in source and object code formats), user interface designs,
architecture, class libraries, objects and documentation (both
printed and electronic), network designs, know-how, trade secrets
and any related intellectual property rights throughout the world
(whether owned by AmTote or licensed to AmTote from a third
party) and also including any derivatives, improvements,
enhancements or extensions of AmTote Technology conceived,
reduced to practice, or developed during the term of this
Agreement;
(Id. at ¶ 32 Subpt. a.). The TSA also included a promise not to reverse engineer, attempt to
discover the source code, or otherwise derive protected information from AmTote as well as a
non-disclosure provision that covers, among other things, third party relationships (Id. at PageID
1

AmTote describes its totalisator services as comprising "an integrated combination of hardware, software
and business processes for handling, calculating, paying out and reporting on pari-mutuel wagers for authorized
pari-mutuel wagering entities" (DN 142 SEALED at PageID # 3496).
2
AmTote describes pari-mutuel wagering as "a betting system wherein all the amounts of money wagered
by a group of players on each of the possible outcomes of a contest (e.g., a live or historical horse race) are pooled
and the payoff odds are calculated by sharing the pool, minus standard deductions such as taxes and house take,
amongst all winning bets" (DN 142 SEALED at PageID # 3496 ¶ 13).

2

# 3501-02). AmTote asserts it also held meetings with representatives of Defendants where
AmTote revealed additional confidential information, including information about system design
and how the totalisator communicated with the terminal server (Id. at PageID # 3505).
AmTote alleges that agents of Defendants violated the terms of the TSA when officers of
Kentucky Downs provided confidential and proprietary information to officers of Exacta (Id. at
PageID 3506 ¶ 59). Specifically, three officers of Kentucky Downs - Rayford Reid, Nicholas
Hughes, and Corey Johnsen - founded and were officers of Exacta Systems at the same time the
three were in possession of AmTote's confidential proprietary information (Id. at 3505 ¶ 54).
AmTote asserts that Reid, Johnsen, and Hughes founded Exacta in part to create a competing
totalisator service and in so doing communicated AmTote's confidential information to Exacta,
thereby misusing the information to create the competing totalisator service (Id. at 3506).
AmTote additionally details specific features of the AmTote system it alleges Defendants
misappropriated, including aspects of seed pool calculations, models for calculating game
winners, and features of the central determinate translator (Id. at PageID # 3512-13).
Additionally, AmTote alleges Defendants requested that AmTote train its employees on all
aspects of the Instant Racing system with the understanding that the training and knowhow were
the first step toward furthering the relationship between AmTote and Kentucky Downs by
expanding Kentucky Downs' historical horse racing operation using AmTote's totalisator (Id. at
PageID # 3512-13). Instead of using AmTote's totalisator, however, AmTote asserts Defendants
used the expertise gathered from AmTote and subsequently installed Exacta systems at other
historical horse racing facilities (Id. at PageID # 3513 ¶ 88).
Next, AmTote alleges Johnsen approached AmTote to inquire whether it would be
possible to retrofit old slot machines, repurpose them as Instant Racing terminals, and interface

3

the renovated terminals with AmTote's totalisator (Id. at PageID # 3513-14 ¶ 89). AmTote
developed a solution involving equipping the terminals with a logic box, peripherals, and a
wiring harness that could interface with the AmTote totalisator as well as the design of a new
player panel to fit the retrofitted terminals (Id. at PageID # 3514 ¶ 91). The retrofitting project
continued for a number of months, and AmTote now believes Defendants were simultaneously
developing terminals for the Exacta System, using AmTote's confidential information in the
process (Id. at PageID # 3516-17 ¶¶ 98-100).
B. The Scope of This Discovery Dispute
This case ("the AmTote case") is the companion case to Parimax Holdings, LLC et al v.
Kentucky Downs, LLC et al, civil action No. 1:15-CV-00082-GNS ("the Parimax case"). The
Parties have agreed to consolidate the two actions for purposes of discovery only, pursuant to the
terms of the Second Agreed Amended Joint Scheduling Order ("the Agreement") (DN 118).3
Paragraph 7 of the Agreement provides that discovery produced in the Parimax case shall be
deemed to have been produced in the AmTote case, and vice versa (Id. p. 3). The Agreement
further provides that requests propounded in one case do not count toward the total limit of
requests propounded in the companion case (Id.).
The undersigned ordered a telephonic conference held on November 2, 2017 (DN 182).4
The purpose of the telephonic conference was to ensure that, though discovery in the two cases is
proceeding jointly, the parties did not believe a request propounded in one case to constitute a
request in the companion case. The parties expressed that they understood requests for discovery
to apply only to the case in which the requests were propounded, notwithstanding the fact that
information gathered from the requests is deemed produced in both cases.

3
4

Located in the Parimax case at (DN 67).
Located in the Parimax case at (DN 134).

4

The text of Rule 37(a)(3)(B) provides that "[a] party seeking discovery may move for
an order compelling an answer, designation, production, or inspection." (emphasis added).
Thus, only the party who propounded the disputed discovery request may move for enforcement.
Payne v. Exxon Corp., 121 F.3d 503, 510 (9th Cir. 1997) (holding defendant lacked standing to
seek enforcement of codefendant's discovery request).

The Sixth Circuit has not directly

addressed this distinction, but other district courts have reached the same conclusion based on a
plain reading of the Rule. See e.g. Phoenix Life Ins. Co. v. Raider-Dennis Agency, Inc., Nos.
07-CV-15324, 08-CV-11562, 2010 WL 839416, *1 (E.D. Mich. Mar. 4, 2010) (Noting that a
plain reading of the Rule suggests only the party who issued a discovery request may seek to
compel a response); Kingsway Financial Servs., Inc. v. Price Waterhouse-Coopers, LLP, No. 03
Civ. 5560(RMB)(HBP), 2009 WL 72165, *3 (S.D.N.Y. Jan. 9, 2009) (same); In re Urethane
Antitrust Litig., 237 F.R.D. 454, 457 (D. Kan. 2006) (same). While the present matter has the
added wrinkle that two cases have been consolidated for discovery purposes, the reasoning is the
same.
Here, AmTote and Parimax seek to compel responses from Defendants, and Defendants
have filed a reciprocal motion to compel, contingent on whether the undersigned grants
AmTote's motion.

A thorough review of both parties' exhibits reveals that AmTote alone

propounded the disputed discovery requests, and AmTote issued those requests to the
Defendants in this case only, not in the Parimax case. If a party lacks standing to compel a
response to a codefendant's discovery request, it must follow that a non-party also lacks standing,
even if the non-party is involved in parallel litigation and feels entitled to the material. Here,
Parimax had an equal opportunity to request this information from the Defendants.
Alternatively, AmTote could have issued these interrogatories and requests for production in the

5

Parimax case, which would have enabled AmTote to assert relevance arguments from the
Parimax complaint. To conclude, it is AmTote alone who presently has standing to seek an order
compelling more fulsome responses as to the allegedly deficient discovery requests. Moreover,
because these cases are not consolidated for trial, and based on the parties' mutual understanding
that a discovery request in one case does not constitute a discovery request in the other, AmTote
alone must demonstrate that the requested information is relevant to the complaint in the AmTote
case. For these reasons, the undersigned will not look to the complaint in the Parimax case nor
entertain either party’s arguments regarding Parimax's right to discover the disputed
interrogatories and requests for production.
C. Summary of Disputed Interrogatories and Requests for Production
Plaintiff classifies its first set of contested interrogatories as "relating to the development
of the Exacta System" (DN 151 SEALED at PageID # 3600). This group includes Interrogatory
No. 2 to Kentucky Downs, Interrogatory No. 2 to Exacta, as well as Interrogatory No. 4 to
Kentucky Downs. Next, AmTote disputes Defendants' responses to a group of interrogatories
AmTote describes as "interrogatories relating to how the Exacta System operates" (DN 151
SEALED at PageID # 3602). The interrogatories at issue in this category are Interrogatories No.
3 to Exacta, which contains five subparts. The final challenged interrogatory is Interrogatory
No. 4 to Exacta, which AmTote describes as "relating to the terminals and terminal components
used in connection with the Exacta System" (Id. at PageID # 3607).
Plaintiff next outlines challenged requests for production. The first set of disputed RFPs
fall into the category of documents relating to the development of the Exacta System. These
include AmTote Requests for Production of Documents Nos. 29-31, 35-40, 42-44, 46, 75, and 76
(DN 151 SEALED at PageID # 3605). To summarize, this group of requests seeks documents

6

reflecting communications among various parties that relate to either the development, operation,
or maintenance of the Exacta System as well as training materials, GLI reports, engineering
specifications, functional specifications, version change information, manuals, and other material
relevant to the design of the system's hardware and software components (DN 151 SEALED at
PageID # 3605-07). The next set are "[p]roduction requests relating to the development and
design of reports used in connection with the operation of the Exacta System, including
correspondence and documents relating to Win Systems, such as instructions provided to Win
Systems" (DN 151 SEALED at PageID # 36-8). The disputed requests are RFPs 48-52. This set
of requests, as its classification suggests, asks each Defendant for documents related to the
development and design of reports generated by each defendant in connection with the operation
of the Exacta System as well as documents involved in the engagement of Win Systems,
instructions to Win Systems, and any documents related to the development or design of reports
that Win Systems may have generated (DN 151 SEALED at PageID # 3609-10).
AmTote next challenges certain redactions in documents produced by Defendants (DN
151 SEALED at PageID # 3611-16). AmTote alleges Defendants redacted a significant number
of documents, oftentimes doing so without explanation other than a perfunctory reference to
trade secrets or privilege. However, the undersigned conducted a telephonic conference on
November 14, 2017 (DN 184). The parties discussed this issue, and the undersigned understands
the Defendants are in the process of addressing this by providing logs that describe the redacted
material in sufficient detail so AmTote can understand the asserted privilege and decide whether
to challenge the designation.

Therefore, the undersigned will not address this portion of

AmTote's motion in the present order.

7

Finally, AmTote seeks access to Exacta's math definition file. According to AmTote's
expert, the math definition file is likely software code that calculates how payouts are made, but
it is alternatively possible that it is a table of numbers working in conjunction with software code
(DN 152-10 at PageID # 3889). AmTote's expert further notes that he cannot effectively compare
the AmTote System with the Exacta System without access to this information.
D. Standard of Review
In relevant part, Rule 26 states:
Unless otherwise limited by court order, the scope of discovery is
as follows: Parties may obtain discovery regarding any
nonprivileged matter that is relevant to any party's claim or defense
and proportional to the needs of the case, considering the
importance of the issues at stake in the action, the amount in
controversy, the parties’ relative access to relevant information, the
parties’ resources, the importance of the discovery in resolving the
issues, and whether the burden or expense of the proposed
discovery outweighs its likely benefit. Information within this
scope of discovery need not be admissible in evidence to be
discoverable.
Fed. R. Civ. P. 26(b)(1).
Thus, “[i]nformation is discoverable under revised Rule 26(b)(1) if it is relevant to any
party’s claim or defense and is proportional to the needs of the case.” Fed.R.Civ.P. 26, Advisory
Committee’s Note for 2015 Amendment. The scope of discovery is within the broad discretion
of the trial court. Ghandi v. Police Dept. of Detroit, 747 F.2d 338, 354 (6th Cir. 1984). Notably,
district courts within the Sixth Circuit have agreed that the 2015 amendments do not change the
basic principle that Rule 26 is to be liberally construed to permit broad discovery. See e.g. He v.
Rom, No. 15-CV-1869, 2016 WL 5682012, at *13 (N.D. Ohio Oct. 3, 2016); Suzette ScottWarren v. Liberty Life Assurance Co. of Boston, 3:14-CV-00738-CRS-CHL, 2016 WL
5661774, at *5 (W.D. Ky. Sept. 29, 2016); Brooks v. Caterpillar Global Mining Am., LLC, No.

8

4:14-CV-00022-JHM, 2016 WL 5213936, at *7 (W.D. Ky. Sept. 20, 2016); Albritton v. CVS
Caremark Corp., 5:13-CV-00218-GNS-LLK, 2016 WL 3580790, at *3 (W.D. Ky. June 28,
2016). Certainly, the movant bears the burden of demonstrating relevance, but that threshold is
relatively low due to the purpose of the Civil Rules. Albritton, 2016 WL 3580790, at *3
(citations omitted).
E. Relevance
AmTote seeks a significant amount of information about the development and design of
the Exacta System. The Defendants have argued that the scope of discovery should extend no
further than three trade secret claims, specifically:
a. Historical Horse Racing Installation, Set-Up, and Operation—
involves training and support of Kentucky Downs' personnel on
operation of the Instant Racing system, including training on back
of house systems, video servers, customer tracking, network
architecture, equipment lists, equipment pricing, and labor and
training costs;
b. Modification of Slot Gambling Terminals to Operate Historical
Horse Racing Games—involves the information used by a third
party (Cole Kepro) to retrofit slot machine terminals to be
compatible with the Instant Racing system, including hardware
specifications, component lists, pricing and sourcing for
component parts, wiring instructions, specifications and design
drawings of the logic box, wiring harness, and player panel, and a
retrofitted terminal prototype;
c. Operator Interface—involves access to historical racing
accounting reports, including Community Source Liability Report,
Game Liability Summary Report, IRS Report, Outs Report, Bill
Transaction Report, Machine Sales Report, Terminal Transaction
Report, and Admin Log, as well as access to the formatting,
terminology, and accounting-related data used to generate these
reports.
(DN 165 SEALED at PageID # 4478 (cleaned up)).

9

Defendants argue that AmTote's contractual claims are insufficient to warrant discovery
of so much confidential information (DN 165 SEALED at PageID # 4486). By the Defendants'
construction, the trade secret claims relate only to hardware components of the Instant Racing
system. And, finally, AmTote only provided totalisator services, so according to the Defendants,
even if the undersigned finds the scope of discovery to be broader than the trade secret claims,
the Court should require Defendants to produce only information relating to the portion of the
Exacta System that functions as a totalisator.
The undersigned will not endorse such a narrow view of this case for purposes of this
discovery dispute.

The claims within the third amended complaint guide this Court's

determination of what constitutes relevant information under Rule 26(b)(1). As outlined above,
AmTote alleges that Defendants made use of AmTote's proprietary information in the creation of
its Exacta System, violating the terms of the TSA and misappropriating trade secrets. Therefore,
both broader categories of information, described by AmTote as documents and information
relating to the development of the Exacta System and documents relating to the operation of the
Exacta System (DN 151 SEALED at PageID # 3600, 3602), bear directly on allegations within
the complaint. While Defendants argue that AmTote provided only totalisator services, this
ignores the plain language of the TSA that, on its face, covers the confidential information of
third parties doing business with AmTote. Whether this third party claim is meritorious is not
the focus of this discovery dispute, and the undersigned is concerned only with ensuring that
there is some basis for connecting AmTote with the Instant Racing system. The Court finds
AmTote has cleared this hurtle.
Additionally, AmTote alleges that Defendants asked AmTote to assist in retrofitting slot
machines to be used as instant racing terminals. Therefore, the broader category, which AmTote

10

defines as "interrogatories relating to the terminals and terminal components used in connection
with the Exacta System[,]" (Id. at PageID # 3603) is also likely to lead to the discovery of
relevant information.

The undersigned finds that the class of information described as

"[p]roduction requests relating to the development and design of reports used in connection with
the operation of the Exacta System, including correspondence and documents relating to Win
Systems, such as instructions provided to Win Systems" (DN 151 SEALED at PageID # 36-8) is
also likely to lead to the discovery of relevant information. Thus, the categories of information
and documents sought by AmTote are relevant, within the meaning of Rule 26(b)(1), to the
claims asserted in its complaint.
The next issue is whether specific interrogatories and requests are themselves overly
broad or unduly burdensome. First, Interrogatory No. 2 to Kentucky Downs and Exacta reads as
follows: "identify all consultants and/or business partners involved in the development, launch,
operation or maintenance of Exacta's historical horse racing wagering or totalisator services at
Kentucky Downs, including the individual or entity's full name, principal place of business and
best available contact information."

(DN 151 SEALED at PageID # 3600).

Defendants

responded that the interrogatory was overly broad, and they did not understand the terms
"development," "launch," "operation," or "maintenance." (Id.). Plaintiff argues the information
is relevant to its claims, and the information will aid Plaintiff in determining whom to depose
and ultimately assist in proving that the Exacta System was improperly derived from the AmTote
system.
The undersigned finds this interrogatory neither overly broad nor particularly unclear.
The world of individuals involved in creating the Exacta System cannot be so large as to create a

11

legitimate issue. Moreover, the terms "development, launch, operation, and maintenance" should
be given their ordinary understanding, and Defendants are ordered to produce more complete
responses to this interrogatory.
AmTote's Interrogatory No 4 to Kentucky Downs asks the Defendant to "[i]dentify all
meetings, including in-person meetings, video conferences and/or telephonic meetings, between
Kentucky Downs, or its consultants, with any party, related to the development of any aspect of a
historical horse racing product other than Instant Racing, from January 1, 2010, to the filing date
of this action, including the date, subject matter, and persons present at such meetings." While
the language of this request is quite broad, it is not unreasonably so. Kentucky Downs responded
that it did not develop the Exacta System and identified Jeremy Stein of IntuiCode Gaming
Corp., Glen Rose of IntuiCode Gaming Corp., Jeff Lind of IJJC, LLC, and Joseph Enzminger of
IJJC, LLC (DN 152 at PageID # 3704). Perhaps these individuals are the software developers in
the literal sense of the word, meaning those individuals whose job is to take someone's idea for a
computer program and actualize that idea, but it is apparent that when AmTote refers to meetings
relating to the development of the Exacta System, it means more than this narrow read of the
term development. It is not believable that four individuals who work for neither Kentucky
Downs nor Exacta are the only persons involved in the creation of the Exacta System, as this
would mean those four individuals independently created the Exacta System with no input,
direction, or interaction with representatives of Kentucky Downs. Therefore, Kentucky Downs
is ordered to provide a more fulsome response to this interrogatory.
Next are interrogatories relating to the operation of the Exacta System. Here, the first
issue relates to AmTote's third interrogatory to Exacta, which reads as follows:
Interrogatory 3: Describe in specific detail how the Exacta System
operates, including, but not limited to:
12

a. identification and operation of all math models;
b. identification and operation of all game themes;
c. identification and operation of seed pools;
d. identification and operation of the operator interface for the
Exacta System; and
e. identification and operation of any and all reports generated in
connection with the operation of the Exacta System.
(Id.).
Exacta first objects because it claims it provided AmTote with GLI5 reports that Exacta
alleges demonstrate how each component of the Exacta System operates (Id.). Additionally,
Exacta argues AmTote has not advanced an allegation that Defendants misappropriated
AmTote's software or game theme information, and AmTote has abandoned its seed pool
misappropriation claim (Id.). As a result, Exacta refuses to respond to parts a., b., and c. of
AmTote's interrogatory (Id.). As for parts d. and e., Exacta states that all responsive accounting
reports are produced by Win Systems and are derived from existing Win Systems software (Id.).
AmTote contends that the crux of its claims is that Defendants took advantage of its
access to AmTote and Parimax's proprietary information when Kentucky Downs was their
customer (DN 151 SEALED at PageID # 3603). AmTote contends the most efficient way to
prove or disprove these allegations is to have an expert examine the technical workings of the
Exacta System, perform side-by-side comparisons, and opine as to whether the Exacta System
was derived from AmTote or Parimax technology (Id.). Finally, AmTote argues it is irrelevant
that Win Systems produced the requested reports, and Exacta should produce the reports if they
are in Exacta's custody or control (Id.).
5

Later in its motion, AmTote reveals that GLI is Gaming Laboratories International, an independent
service that tests and certifies gaming and gambling systems (DN 151 SEALED at PageID # 3607).

13

The Civil Rules permit a party to serve on another party a request:
(1) to produce and permit the requesting party or its representative
to inspect, copy, test, or sample the following items in the
responding party's possession, custody, or control:
(A) any designated documents or electronically stored
information—including writings, drawings, graphs, charts,
photographs, sound recordings, images, and other data or data
compilations—stored in any medium from which information can
be obtained either directly or, if necessary, after translation by the
responding party into a reasonably usable form[.]"
Fed. R. Civ. P. 34(a)(1)(A) (emphasis added). It is therefore irrelevant that the requested reports
were generated by Win Systems. The question is only whether these reports are in Exacta’s
possession, custody, or control. If they are, Exacta has an obligation under Rule 34(a)(1)(A) to
produce the documents if they are relevant within the meaning of Rule 26(b)(1). According to
the affidavit of AmTote's expert witness, Garry Kitchen, these system reports and operational
details are essential in enabling him to form an opinion regarding whether the Exacta System is
an improper misappropriation of the AmTote system (DN 152-1 at PageID # 3697-98). Having
considered Mr. Kitchen's affidavit along with the claims set forth in the third amended
complaint, the undersigned concludes that the requested reports are relevant within the meaning
of Rule 26(b)(1), and Exacta is directed to produce them.
The undersigned notes that this analysis is also relevant to RFP Nos. 48-52, which ask for
documents relating to communications about and the design of reports generated by the Exacta
System. It is therefore ordered that Exacta provide more fulsome responses to sections d. and e.
of Interrogatory No. 3 as well as to RFPs Nos. 48, 49, 50, 51, and 52.
Similarly, subparts a., b., and c. of Interrogatory request relevant information.

As

AmTote points out, the third amended complaint alleges that the Exacta System is derivative of
the entire AmTote system and that Exacta has even appropriated information from RaceTech.
14

AmTote may not have directly provided services that would ordinarily relate to, for instance,
game themes, but as already noted, the undersigned finds that the third party language in the
TSA is sufficient to demonstrate relevance under Rule 26(b). Therefore, Exacta is ordered to
supplement its responses to sections a., b., and c.
AmTote's fourth interrogatory to Exacta reads "[d]escribe in specific detail each type of
terminal that is, or has been, offered for use in connection with the Exacta System including a
detailed list of components and the date at which each terminal type was first operational" (DN
151 SEALED at PageID # 3607). Exacta responded that it purchases completed terminals from
Intuicode Gaming Corporation, and third parties provide Intuicode with the terminals' hardware
components (DN 151 SEALED at 3603-04).
AmTote objects to this as an incomplete response and seeks more detailed information
about the terminals and hardware, arguing that one of its claims asserts that AmTote provided
Kentucky Downs with a detailed subassembly list of the hardware components comprising
AmTote's retrofitted terminals, and Kentucky Downs relied on this information when developing
the Exacta System (DN 151 SEALED at PageID # 3604-05). As a result, AmTote seeks a
response with specific information about the terminals and their components.
As detailed above, AmTote alleges in the third amended complaint that Kentucky Downs
asked AmTote to assist in retrofitting slot machines to serve as Instant Racing terminals.
AmTote alleges IntuiCode was part of this process as well. It does not matter that IntuiCode
makes the current terminals for the Exacta System because they are nonetheless in the
possession, custody, or control of Exacta. Moreover, because AmTote has met its burden by
demonstrating that information about the terminals is relevant to its asserted claims, Exacta

15

should provide AmTote with a more detailed response.

Therefore, Exacta is ordered to

supplement its response to this fourth interrogatory.
The parties' arguments regarding the disputed RFPs are much the same as the arguments
over the disputed interrogatories. AmTote seeks information relating to the design and operation
of the Exacta System, and Defendants attempt to narrow the scope of Plaintiff's claims. The
undersigned has addressed this argument and found the design and operation of the Exacta
System to be centrally relevant to AmTote's claims. Thus the only remaining issue is whether
any of the individual RFPs are overly broad or unduly burdensome.
RFP No. 29 to Kentucky Downs states:
29. Please produce any and all documents and communications
constituting or relating to designs, technical specifications,
engineering specifications, functional specifications, charts,
manuals, version changes, diagrams, and other documents that
describe the hardware and/or software relating to the Exacta
System, where such documents and communications describe:
a. database structures available or intended to be available;
b. function calls available or intended to be available;
c. database trigger software code to be written; and
d. external-facing interfaces to gaming terminals.
(DN 152-3 at PageID # 3737).
Kentucky Downs responds, in relevant part:
RESPONSE: Objection. This request is overly broad, unduly
burdensome, irrelevant, and not in proportion to the needs of this
case because it does not deal with the three trade secrets AmTote
alleges are in issue in this case. In particular, none of these
requests address the Proprietary Operator Interface, which is the
only claim directed against Kentucky Downs in that the other two
trade secrets misappropriation claims are directed at purported

16

trade secrets Magellan, not Kentucky Downs, allegedly
misappropriated. Kentucky Downs is not Magellan and cannot
answer on behalf of Magellan with respect to the claims against
Magellan.
(Id.).
Kentucky Downs offers either "see response to Request No. 29" or a substantially similar
objection to fifteen other RFPs, which request the following:
30. Please produce any and all documents provided by, and
communications from, Kentucky Downs to Exacta, or to any
person who has subsequently been employed by Exacta, related to
the design, functionality, or operation of live or historical horse
race wagering totalisators between January 15, 2010, and the
present.
31. Please produce any and all documents and communications
describing how Exacta and/or Kentucky Downs developed
software requirements for the Exacta System, including documents
identifying the sources of information used to generate these
requirements.
35. Please produce any and all documents and communications
relating to the conception, design, and development of the Exacta
System or any aspect of it from between January 15, 2010, and the
filing date of this action.
36. Please produce any and all documents and communications
between Exacta and Kentucky Downs regarding the development
and operation of the Exacta System.
37. Please produce any and all documents and communications
between Exacta and IntuiCode regarding the development and
operation of the Exacta System.
38. Please produce any and all documents and communications
between Exacta and IJJC regarding the development and operation
of the Exacta System.
39. Please produce any and all documents and communications
between Exacta and Magellan regarding the development and
operation of the Exacta System.

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42. Please produce any and all documents and communications
relating to the conception, design, and development of the math
models (as that term is used in Exacta's answer to RaceTech KY's
interrogatory #5) used by the Exacta System between January 15,
2010, and the present.
43. Please produce any and all documents and communications
relating to the conception, design, and development of the Central
Determinant Translator (as that term is used in Exacta's answer to
RaceTech KY's interrogatory #5) used by the Exacta System
between January 15, 2010, and the present.
44. Please produce any and all documents and communications
related to training or education received by anyone at Kentucky
Downs related to the Exacta System, including but not limited to
slide presentations, training manuals, reference guides and
explanatory emails.
46. Please produce any and all GLI reports, including drafts,
related to the Exacta System, including, but not limited to, MO399-ENR-14-02, 10.8.2014; MO-399-ENR-14-03, 12.23.2014;
MO-399-ENR-14-03, 1.21.2015; MO-399-ENR-14-03, 1.26.2015;
MO-399-ENR14-03, 1.28.2015; MO-399-ENR-14-03, 2.3.2015.
(DN 152-3 at PageID # 3738-43).
The undersigned is cognizant that these requests seek a substantial amount of confidential
and proprietary information, but confidential and proprietary information is at the center of this
dispute. It is common for courts to order parties to turn over source code when some type of
infringement of proprietary information is alleged. Moreover, there is a protective order in place
in this case that protects sensitive information (DN 63). Finally, AmTote has convinced the
Court via the affidavit of expert Garry Kitchen that viewing the source code and other schematic
and planning materials outlined in the requests above is essential if AmTote is to prove its
claims. See, e.g. Metavante Corp. v. Emigrant Savings Bank, No. 05-CV-1221, 2008 WL
1969596, at *3 (E.D. Wisc. May 5, 2008) (The presence of a protective order, the relevance of
the source code to the claims at issue, and the necessity of the source code for a party to prove its

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claim demonstrated the requisite need for the code); Dynamic Microprocessor Assocs. v. EKD
Computer Sales, 919 F.Supp. 101, 105-06 (E.D.N.Y. 1996) (same). The undersigned wishes to
avoid confusion and future litigation of this issue, and so it is ordered that Exacta shall turn over
the source code and other relevant documents pursuant to the conditions set forth in the Order
portion of this opinion.
F. Certain Redactions
AmTote has complained of certain redactions within the documents Defendants have
already produced. The undersigned addressed this issue in a telephonic conference held on
November 14, 2017, and Defendants have been ordered to produce a redaction log detailing the
reasons for their redactions (DN 186). Therefore, this portion of AmTote's motion is denied as
moot.
G. Defendants' Motion to Compel
Defendants have filed a reciprocal motion to compel that seeks a quid pro quo exchange
of information. In other words, to the extent the Court will allow AmTote access to Exacta's
software and source code to prove Exacta misappropriated AmTote's information, Exacta wants
access to AmTote's software and source code to prove it didn't. However, much of that motion
concerns interrogatories and requests for production issued to Parimax. As a procedural matter,
the undersigned is addressing the substance of this motion where it is filed in the Parimax case.
Here, Defendants' motion (DN 153 SEALED and 154) is denied.

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ORDER
IT IS HEREBY ORDERED THAT:
1. AmTote's motion to compel (DN 151 SEALED and DN 152) is GRANTED IN
PART AND DENIED IN PART;
2. Defendants' motion to compel (DN 153 SEALED and DN 154) is DENIED.
3. Defendants shall supplement their responses to AmTote's interrogatories and requests
for production as detailed above;
4. With respect to the source code:
A. Exacta shall turn over the documents pursuant to the terms of the agreed protective
order (DN 63);
B. Pursuant to ¶ 3 of that protective order, the source code shall be given an attorneys'
eyes only designation;
C. AmTote shall consult its expert to determine the usual format for producing such
information. The parties shall confer, and where possible, Exacta shall turn over discoverable
documents in that format;
D. Unless agreed upon by the parties, AmTote shall not copy any material, in whole or in
part, and upon the conclusion of litigation, AmTote shall return all material to Exacta with an
affidavit affirming that nothing has been copied and that only AmTote's experts and attorneys
have viewed the material.

Copies:

December 8, 2017

Counsel

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