United States District Court, W.D. Kentucky, Bowling Green Division
MEMORANDUM OPINION AND ORDER
Brent Brennenstuhl United States Magistrate Judge
AmTote International, has filed a motion to compel discovery
of “math sheets” from Defendant, Exacta Systems,
LLC (DN 218 in No. 1:15-cv-47-GNS and DN 171 in No.
1:15-cv-82). AmTote argues that the math sheets are within
the purview of the Court's prior discovery order issued
on December 11, 2017 (DN 187 in No. 1:15-cv-47-GNS and DN 194
in No. 1:15-cv-82), which ordered all “documents and
information” relating to the development and operation
of the Exacta system to be produced (Id. at 5134).
Exacta has filed a response in opposition (DN 238 in No.
1:15-cv-47 and DN 191 in No. 1:15-cv-82). AmTote filed a
reply (DN 241 in No. 1:15-cv-47 and DN 193 in No.
of the Case
Order relates to two pending cases. In the first, AmTote
International sued Defendants Kentucky Downs, LLC; Encore
Gaming, LLC n/k/a Exacta Systems, LLC; and Magellan Gaming,
LLC for breach of contract, tortious interference with an
existing contract, and threatened and actual misappropriation
of trade secrets (DN 1 and DN 142 SEALED in No. 1:15-cv-47).
AmTote asserts its customer, Kentucky Downs, improperly
provided proprietary information concerning their historical
horse racing gaming system to the other named Defendants, who
in turn used that information to develop a competing service
(DN 1 and DN 142 SEALED). Kentucky Downs allegedly proceeded
to terminate their business relationship with Plaintiffs and
used the newly developed system at their facilities in
violation of a contract between AmTote and Kentucky Downs.
This case was initiated on April 3, 2015 (Id.).
See AmTote Int'l, Inc. v. Kentucky Downs, LLC et
al., Civil Action No. 1:15-cv-00047-GNS (W.D. Ky.).
second case, Parimax Holdings sued Kentucky Downs, LLC,
Exacta Systems, LLC f/k/a Encore Gaming, LLC and Magellan
Gaming, LLC for breach of contract, tortious interference
with an existing contract, unjust enrichment, unfair
competition and misappropriation of trade secrets (DN 1 and
DN 93 in No. 1:15-cv-82). The suit stems from Defendant's
alleged use of former Plaintiff, RaceTech KY, LLC's,
confidential and proprietary information and licensed
technology in violation of an Equipment and License Agreement
between RaceTech KY and Kentucky Downs (DN 1 and DN 93). This
case was initiated on June 29, 2015. See Parimax
Holdings, LLC v. Kentucky Downs, LLC et al., Civil
Action No. 1:15-cv-00082-GNS (W.D. Ky.).
parties agreed that discovery in the two cases shall proceed
jointly (DN 111 in No. 1:15-CV-00047-GNS and DN 64 and DN 141
in No. 1:15-CV-00082-GNS). A lengthy discovery process has
ensued. AmTote has filed a motion to compel discovery of
“math sheets” from Exacta (DN 218 in No.
1:15-cv-47-GNS and DN 171 in No. 1:15-cv-82). Exacta filed a
response objecting to AmTote's motion and requested a
hearing on the matter (DN 238 in No. 1:15-cv-47 and DN 191 in
No. 1:15-cv-82). AmTote filed a reply (DN 241 in No.
1:15-cv-47 and DN 193 in No. 1:15-cv-82).
of the Parties
argues that the math sheets are discoverable documents. They
cite this Court's previous Discovery Order (DN 187 in No.
1:15-cv-47 and DN 137 in No. 1:15-cv-82) which ruled that all
documents related to the design, development, and operation
of the Exacta system are relevant in this case (DN 218 PageID
# 5135 and DN 171 PageID # 2879 in No. 1:15-cv-82). AmTote
contends the math sheets are within the scope of that order
(Id.). They add that production of the math sheets
is essential to determining if Exacta's system is
derivative of their own and maintain that any risk of
proprietary information becoming public is mitigated by the
protective orders already in place (Id. at 5138-5139
argues that AmTote has not met its burden to show that the
math sheets are relevant or necessary. They argue that this
Court's prior order should not control here because the
math sheets were not specifically at issue (DN 238 PageID #
6329). Exacta emphasizes the potential harm it would suffer
if its trade secrets or otherwise confidential information
were disclosed, especially considering AmTote is a competitor
in an industry with few participants. They contend that this
risk outweighs any “incremental value” the math
sheets may provide AmTote (Id. at 6339-6349). Exacta
requests this Court deny AmTote's motion, or in the
alternative requests the Court conduct a hearing at which the
math sheets can be reviewed by the Court in camera.
(Id. at 6350).
26(b)(1) of the Federal Rules of Civil Procedure guides the
evaluation of any discovery request. The Rule provides that
“[p]arties 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. .
.” Fed.R.Civ.P. 26(b)(1). In assessing whether the
discovery is “proportional to the needs of the case,
” courts should consider “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.”
Id.; Advisory Committee Notes 2015 Amendment.
December 11, 2017, this Court granted in part Plaintiff's
Motion to Compel (DN 187).
order explained, given the nature of the case, that
information regarding the design, development, and operation
of the Exacta System was relevant:
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 Gerry 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… The undersigned wishes
to avoid confusion and future litigation ...