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Parimax Holdings, LLC v. Kentucky Downs, LLC

United States District Court, W.D. Kentucky, Bowling Green Division

May 5, 2017

PARIMAX HOLDINGS, LLC PLAINTIFFS
v.
KENTUCKY DOWNS, LLC ET AL DEFENDANTS

          MEMORANDUM OPINION AND ORDER

          H. Brent Brennenstuhl United States Magistrate Judge.

         INTRODUCTION

         Plaintiff Parimax Holdings, LLC has moved this Court for leave to file an amended complaint and join parties pursuant to Rule 15(a) and Rule 20(a) of the Federal Rules of civil Procedure (DN 70). Defendants Kentucky Downs, LLC and Exacta Systems, LLC responded (DN 77), and the Plaintiff replied (DN 82). Additionally, Defendants have filed a motion for oral argument (DN 79). The Plaintiff has filed a response (DN 83), and the Defendants have filed a reply (DN 88). This matter is ripe for adjudication.

         BACKGROUND

         This is one of two pending cases against these Defendants alleging misappropriation of trade secrets and breach of contract. The other, however, has as the plaintiff Amtote International, Inc. See Amtote Int'l, Inc. v. Kentucky Downs, LLC et al, Civil Action No 1:15-cv-00047-GNS (W.D. Ky.) (the Amtote case). With this motion, Parimax has five objectives: to ensure the record reflects that Parimax was previously substituted for RaceTech KY, LLC; to join Amtote as a co-plaintiff in this case; to amend the complaint in this case with claims identical to those raised in the Amtote case; to add a claim that the Defendant's misuse of Amtote's confidential information constituted a breach of the licensing agreement at issue in the present case; and to add Magellan Gaming, LLC as a co-defendant (DN 70 at pageID # 850). The undersigned will address each request in turn.

         A. AMENDMENT TO REFLECT THAT PARIMAX IS THE SUCCESSOR IN INTEREST TO RACETECH

         This Court previously issued an order substituting Parimax in the Place of RaceTech (DN 50). Moreover, Defendants do not object to this substitution, assuming they maintain all defenses that were available to them under the prior agreement (DN 77 at pageID # 1049). Therefore, amendment is proper under Rule 15(a), and this portion of Plaintiff's motion is granted.

         B. JOINING AMTOTE AS A CO-PLAINTIFF FOR PURPOSES OF ADDING ALLEGATIONS FROM THE AMTOTE CASE

         1. ARGUMENTS OF THE PARTIES

         Parimax seeks to add Amtote as a co-plaintiff in this action. Parimax argues this Court should permit joinder because the claims Amtote is asserting against the Defendants arise out of the same transaction or occurrence as those of Parimax, and there is a common question of law or fact in both cases (DN 70 at pageID # 852-53). Specifically, Parimax's predecessor in interest, RaceTech, entered into an agreement with Kentucky Downs to offer a historical racing system. Amtote entered into a separate agreement to offer a totalisator that would, as the name suggests, total the amounts of incoming wagers (Id.). Now, Parimax alleges principals from Kentucky Downs violated the confidentiality requirements of the Parimax agreement and misappropriated trade secrets for the purpose of creating a competitive historical racing system in the form of defendant company Exacta Systems. In a separate case, Amtote claims the Defendants violated the totalisator agreement and misappropriated Amtote's trade secrets.

         In response, the Defendants argue that joining Amtote will functionally force them to litigate both cases twice. The Defendants note that Parimax has proposed copying identical language from the complaint in the Amtote case. The Defendants further argue Amtote was not a party to the agreement between Defendants and Parimax. As a result, they cannot enforce rights under that agreement (DN 78 at pageID # 1048).

         In its reply, Parimax asserts the claims are not duplicative because the complaints will still contain separate claims despite the identity of the allegations in the proposed amendments (DN 82 at pageID # 1111-13). Finally, Parimax argues the Defendants have not adequately demonstrated prejudice (Id.).

         2. ANALYSIS

         Rule 20(a)(1) of the Federal Rules of Civil Procedure addresses the permissive joinder of parties as plaintiffs. The rule ...


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