United States District Court, W.D. Kentucky, Bowling Green Division
AMTOTE INTERNATIONAL INC. PLAINTIFFS
KENTUCKY DOWNS, LLC ET AL DEFENDANTS
MEMORANDUM OPINION AND ORDER
BRENT BRENNENSTUHL UNITED STATES MAGISTRATE JUDGE.
Amtote International, Inc. has moved this Court for leave to
file a third amended complaint pursuant to Rules 15(a) and
20(a) which adds Magellan Gaming, LLC as an additional
defendant (DN 120). Defendants Kentucky Downs, LLC, Exacta
Systems, LLC, Corey S. Johnsen, Nicholas Hughes, and Rayford
T. Reid filed a response (DN 127), and Amtote replied (DN
130). Additionally, Defendants filed a motion for a hearing
on this issue (DN 128). The Plaintiff responded (DN 131), and
Defendants replied (DN 136). This matter is ripe for
adjudication. For the reasons set forth below, Amtote's
motion is granted.
OF THE PARTIES
requests that it be allowed to amend its complaint to add
Magellan as a co-defendant (DN 120 at pageID # 3197). Amtote
argues joinder is proper under Fed. R. Civ. Pro. 20(a)
because Amtote is alleging that Magellan, like defendants
Kentucky Downs and Exacta Systems, breached or induced the
breach of the Totalisator Agreement (Id. at pageID #
3199). Amtote's allegations include claims of tortious
interference and misappropriation of trade secrets
(Id.). Defendants do not contest this amendment, but
they condition their acceptance on the premise that the
undersigned rule in their favor with regard to another
proposed amendment of a complaint in a related action (DN 127
at PageID # 3405-06). That separate motion seeks to add
Magellan as a co-defendant in a separate action but also
seeks to incorporate portions of Amtote's allegations
from the instant action. See Parimax Holdings, LLC v.
Kentucky Downs, LLC et al, Civil Action No.
1:15-cv-00082-GNS-HBB at ¶ 70. Here, the defendants
concede that the allegations by Amtote against Magellan have
been properly pleaded in the present action (DN 127 at PageID
Rules of Civil Procedure permit the joinder of a defendant
where a claim of relief is asserted against a new defendant
that arises out of the same transaction or occurrence and
where a common question of law or fact will arise in the
action. Fed.R.Civ.P. 20(a)(2). "Under the Rules, the
impulse is toward entertaining the broadest possible scope of
action consistent with fairness to the parties; joinder of
claims, parties, and remedies is strongly encouraged."
United Mine Workers of Am. v. Gibbs, 383 U.S. 715,
724 (1966). The Court retains broad discretion in the
decision whether to join or sever parties, and the purpose of
the Rule is to promote judicial economy and trial
convenience. Dejesus v. Humana Ins. Co., Civil
Action No. 3:15-cv-00862, 2016 WL 3630258, at *2 (W.D. Ky.
June 29, 2016).
as noted above, Amtote alleges Magellan breached the
Totalisator Agreement. Given that this agreement forms the
basis of the underlying complaint, the undersigned concludes
the alleged actions arise out of the same transaction or
occurrence. As for whether a common issue of law or fact will
arise, the breach (or not) of the Agreement and the
surrounding circumstances are likely to provide such a common
issue. Thus, given the liberal standard to be applied and the
reasons offered by the Plaintiff, the undersigned concludes
that joinder of Magellan as a co-defendant in this action is
next issue is whether amendment of the complaint is proper
under Rule 15(a). The court should freely give leave to amend
“when justice so requires.” Fed.R.Civ.P.
15(a)(2). In assessing the interests of justice, the Court
should consider several factors, including "undue delay
in filing, lack of notice to the opposing party, bad faith by
the moving party, repeated failure to cure deficiencies by
previous amendments, undue prejudice to the opposing party,
and futility of amendment." Coe v. Bell, 161
F.3d 320, 341 (6th Cir. 1998) (quoting Brooks v.
Celeste, 39 F.3d 125, 130 (6th Cir. 1994)); see also
Colvin v. Caruso, 605 F.3d 282, 294 (6th Cir. 2010)
(“A motion to amend a complaint should be denied if the
amendment is sought in bad faith, for dilatory purposes,
results in undue delay or prejudice to the opposing party, or
would be futile.”).
the Defendants have declined to raise any reason why this
Court should not allow the amendment, and the undersigned
concludes none exists. Defendants did reserve some objections
arguing that they would be prejudiced if the undersigned
allowed Amtote to become a party in the Parimax case cited
above. However, as explained in an order in that case, the
allegations made by Amtote against Magellan in that action
are pursuant to Amtote's alleged role as a third-party
beneficiary to Parimax's agreement with the Defendants.
Here, on the other hand, Amtote is alleging tortious
interference with its own agreement with the Defendants. As a
result, there is no unfair prejudice to the Defendants by
requiring them to defend two separate contracts in two
separate actions. Therefore, Magellan's joinder and
Amtote's proposed amendments are proper.
the defendants have filed a motion for a hearing in this
matter (DN 128). Parimax responded, stating they believe
their pleadings to be sufficient, but they are willing to
participate if this Court feels it is necessary (DN 131). The
Defendants replied (DN 136). Both parties incorporate their
arguments from the Parimax case motion for hearing (DN 79).
The undersigned restates here the reasons for denial.
Although the Defendants claim there are factual issues that
have occurred off the record of which this Court is unaware,
the means to present those facts was to supplement the record
with exhibits to their pleadings. Moreover, while this
case's procedural posture is unusual, it is not so
complicated or beyond the norm that the Court needs to hear
additional arguments to reach a decision. Therefore,
Defendants motion (DN 128) is denied.
HEREBY ORDERED that Plaintiffs motion (DN 120) is GRANTED.
FURTHER ORDERED that the clerk of court is directed to file
Plaintiffs unredacted third amended complaint (DN 120-1)
under seal and to file Plaintiffs redacted ...