Internet Sports International, LTD. v. Amelco USA, LLC

1 2 UNITED STATES DISTRICT COURT 3 DISTRICT OF NEVADA 4 INTERNET SPORTS INTERNATIONAL, Case No. 2:23-cv-893-ART-NJK 5 LTD., ORDER ON PLAINTIFF’S MOTION 6 Plaintiff, FOR PARTIAL SUMMARY v. JUDGMENT, DEFENDANT’S MOTION 7 FOR SUMMARY JUDGMENT, AND AMELCO USA, LLC. et al., MOTIONS TO SEAL 8 (ECF Nos. 262–66, 283). Defendants. 9 10 Plaintiff ISI sued Defendants Amelco UK (“AUK”) and Amelco USA (“AUSA,” 11 together, the “Amelco parties”) for allegedly stealing ISI’s confidential information 12 and trade secrets to make rival sports-betting kiosks. ISI seeks summary 13 judgment on elements of its three breach-of-contract claims, while Amelco seeks 14 summary judgment on ISI’s entire case. (ECF Nos. 263, 266.) Also pending before 15 the Court are both parties’ motions to seal and ISI’s motion to file a sur-reply. 16 (ECF Nos. 262, 264, 283.) 17 I. Factual Background 18 In 2018, the Supreme Court overturned the federal law that prohibited 19 sports gambling in most states. See Murphy v. NCAA, 584 U.S. 453 (2018). This 20 led to a proliferation of sports-gambling businesses in both online and “retail” 21 markets. While most sports-betting takes place online, retail sports betting— 22 including using kiosks at casinos and other brick-and-mortar locations—remains 23 an important part of the industry. (ECF No. 272-3 at 106.) Some state laws 24 require sports-gambling companies to maintain a retail presence to operate in 25 the state, even if a company primarily operates online. (See Id. at 108–09.) 26 ISI is an American sports-gambling company that specializes in kiosks for 27 retail. It assembles software and hardware into kiosks, maintains such kiosks, 28 and manages bets and distributions through its kiosks. (Id. at 103.) 1 Amelco (“AUK”) is a British company that makes software for online sports 2 betting and financial trading. (ECF No. 266 at 11.) Amelco USA (“AUSA”) is a 3 Delaware Limited Liability Corporation owned in equal shares by AUK’s founder 4 Damian Walton and American gambling professional Rob Miller. (Id. at 12.) 5 After the Murphy decision, both Amelco and ISI sought market share in the 6 several states where sports gambling had become legal. (Id. at 13; ECF No. 271 7 at 11.) ISI approached Amelco about a partnership in which ISI would assemble 8 kiosks for retail sports-gambling using Amelco’s software. (ECF No. 271 at 11.) 9 A. ISI and AUSA Contract with One Another. 10 ISI, through its president, William “Bill” Stearns, approached AUSA’s 11 manager Rob Miller to discuss collaborating. In March 2019, Bill Stearns and 12 Rob Miller entered a Non-Disclosure Agreement (“NDA”) concerning a “Possible 13 Transaction.” (ECF No. 262-1 at 2.) The NDA requires that the parties use any 14 confidential information exchanged only for the purposes contemplated by the 15 “Possible Transactions.” (Id. at 3.) The expiration term of the NDA states that it 16 will “expire and terminate two years from the date either Party notifies the other 17 in writing that discussions concerning the Possible Transaction are terminated.” 18 (Id. at 4.) 19 Six weeks after entering the NDA, Bill Stearns and Rob Miller entered a 20 License Agreement on behalf of ISI and AUSA, respectively. The contract requires 21 ISI to pay royalties to AUSA for a license to use Amelco’s software on ISI’s kiosks. 22 (ECF No. 262-2 at 5.) It also allows ISI to request payment for time spent on 23 technical design services to “Americanize” Amelco’s horse-racing software. (Id. at 24 6.) This contract required ISI to maintain Amelco’s information as confidential, 25 but it did not require any confidentiality obligation from Amelco. (See id. at 3.) 26 The License Agreement includes an integration clause stating that it constitutes 27 the parties’ “entire understanding and agreement.” (Id. at 8.) AUSA’s manager 28 Rob Miller and AUK’s co-owner Damian Walton testified in their depositions that 1 they believed the NDA had been incorporated into the license agreement. (ECF 2 No. 265-1 at 61, 77.) 3 Around three months after entering the License Agreement, ISI President 4 Bill Stearns wrote to representatives at AUSA and JCM—a third-party company 5 that develops printers for gambling kiosks—that “ISI has an NDA signed with 6 Amelco and JCM” and that since the three companies would be collaborating, 7 another NDA “should be signed so everyone feels comfortable and all companies 8 can talk to each other directly.” (ECF No. 272-4 at 46.) AUSA’s President Rob 9 Bone replied to the email that “all development efforts are going to be handled by 10 the Amelco UK group” and invited Amelco UK employees Paul Manning and 11 James Wood to collaborate. (Id. at 44.) 12 Two months after this email exchange, ISI, AUK, AUSA, and JCM entered 13 a Mutual Confidentiality Agreement (“MCA”) that required the parties to 14 “safeguard . . . and strictly maintain the confidentiality of all Confidential 15 Information received” and to “use all Confidential Information received . . . solely 16 for purposes of evaluating the Potential Transaction with the other Party.” (ECF 17 No. 262-3 at 4.) The MCA defines “Disclosing Party” as “the Party disclosing its 18 Confidential Information under this Agreement” and “Receiving Party” as “the 19 Party receiving the Disclosing Party’s Confidential Information.” (Id. at 3.) The 20 MCA also required JCM to “use its best efforts to mark such Confidential 21 Information . . . to indicate its confidentiality.” (Id.) Rob Bone signed the MCA as 22 the representative of AUSA, and he held himself out as President of AUSA in 23 emails with Rob Miller, one of AUSA’s principals. (See ECF No. 279-3 at 2; ECF 24 No. 262-3 at 8.) 25 Months later, when resigning as president of AUSA, Rob Bone sent an email 26 to AUK and AUSA staff explaining that Damian Walton, AUK’s co-owner and 27 AUK’s signatory on the MCA, would continue as one of two main principals at 28 AUSA. (ECF No. 263-10 at 2.) AUK’s CEO would “continue to assist with all US 1 business initiatives;” AUK’s project manager would “continue to lead all 2 development and product management efforts;” and AUK’s Project Specialist 3 would “continue to facilitate all customer support and [project-management tool] 4 JIRA deliverables.” (Id.) AUSA maintains a low cash flow and lists Robert Miller’s 5 other company’s headquarters as its official headquarters, while AUK employees 6 in the UK may run AUSA’s day-to-day business. (See ECF No. 262-6.) 7 B. Amelco and ISI Fail to Consummate a Kiosk Agreement. 8 Months after ISI and Amelco began collaborating, ISI’s President Bill 9 Stearns sought a contract in which the Amelco parties would pay ISI for kiosks 10 and kiosk maintenance over a twenty-year period. Over the next two years, the 11 parties negotiated, but never executed, this deal. 12 In July 2019, ISI billed Amelco for seven kiosks for a fee of $1,000 per 13 kiosk, along with a $100 fee per kiosk for software support. (ECF No. 272-5 at 14 26.) 15 A month later, ISI sent AUSA a kiosk agreement, which had a twenty-year 16 term and required Amelco to pay a $1,000 fee to ISI for any retail kiosk Amelco 17 obtained, regardless if it was through ISI, along with $100 per month for 18 maintenance and servicing of such kiosks. (See ECF No. 266 at 21–22.) AUSA did 19 not accept this draft. (Id. at 24–25.) AUSA proposed a counteroffer with a five- 20 year term, without the requirement to pay ISI for kiosks not obtained through 21 ISI, and with a provision that allowed AUSA to terminate the contract at will. (Id.) 22 Several weeks later, AUSA told ISI that it needed to negotiate the agreement with 23 AUK instead of AUSA. (ECF No. 266-2 at 109.) AUK then declined to accept ISI’s 24 previous version of the contract. (See ECF No. 265-1 at 199.) 25 Weeks later, AUK gave ISI another draft agreement with several proposed 26 changes: it changed the required signatures from each respective party, reduced 27 the term of the agreement from twenty to five years, removed the condition that 28 AUK pay ISI for kiosks not obtained through ISI, and eliminated a termination 1 fee. (See ECF No. 266-2 at 120–25.) ISI did not agree to these terms. (See ECF 2 No. 265-1 at 200–01.) 3 Almost a year later, in September 2020, ISI contacted AUK to “finalize the 4 kiosk and kiosk support contract.” (ECF No. 266-2 at 50.) In October, AUSA 5 (based out of a London address) paid an invoice for five more kiosks, again paying 6 ISI the fee of $1,000 per kiosk and $100 per month for kiosk support. (ECF No. 7 271 at 70; ECF No. 272-5 at 31.) In November, ISI provided AUK and AUSA with 8 a new draft contract, which did not incorporate AUK’s edits, and both ISI and 9 AUK’s representatives rejected each other’s respective drafts. (ECF No. 266-3 at 10 114, 116.) Brandon Walker, head of business development for Amelco, stated in 11 his deposition that while he knew ISI wanted to finalize the agreement, he also 12 knew, by October 2020, that from Amelco’s perspective “it was never gonna fly.” 13 (ECF No. 272-3 at 68.) 14 Negotiations continued into July 2021, with ISI’s Stearns writing to AUK’s 15 representative that the companies would limit bonuses on the Licensing 16 Agreement “contingent upon us coming to agreement on the kiosk contract which 17 unfortunately is still a very open topic.” (ECF No. 266-3 at 127.) Stearns testified 18 in his deposition that AUK’s Chief Operating Officer Leon Wynne then “killed the 19 deal” by ending negotiations. (ECF No. 266-1 at 4–5.) 20 C. ISI Provides Amelco Intellectual Property Related to Kiosks. 21 Over the course of their relationship, ISI provided Amelco with assistance, 22 including sports-gambling kiosks, instances of ISI’s software running on kiosks, 23 troubleshooting of their collaborative kiosks in the Wildwood casino in Colorado, 24 and code for connecting kiosks with other third-party technology. 25 AUK bought two kiosks that at some point had instances of ISI’s software 26 loaded onto them so that the AUK’s engineers could see how ISI’s software 27 worked. (ECF No. 266 at 17–18; ECF No. 271-3 at 15.) Senior executives at 28 Amelco stated that the intent of these meetings was to see how ISI’s kiosks 1 worked in order to learn how to operate retail sports-gambling kiosks in the 2 United States. (ECF No. 271 at 17–18.) No evidence on the record, apart from 3 argument of counsel, shows that ISI undertook measures to protect the 4 confidentiality of its kiosks with other third parties who purchased kiosks. (See 5 ECF No. 271 at 22; ECF No. 301 at 69.) Additionally, ISI’s interrogatory responses 6 state there are no confidentiality agreements between ISI and the various third 7 parties to which it sells kiosks. (See ECF No. 266 at 57–58 (citing ECF No. 266-3 8 at 146–48).) 9 ISI provided Amelco advice and troubleshooting for their collaborative 10 kiosks at the Wildwood Casino in Colorado. (ECF No. 266 at 27.) In summer 2020, 11 ISI installed and operated kiosks using AUK’s platform. (See ECF No. 266-2 at 12 91.) ISI’s employee Angelique Ek provided instruction and troubleshooting on the 13 kiosks to AUK for several months, including instruction on how to generate 14 various compliance reports on the kiosks. (See ECF No. 271-2 at 98–100.) 15 ISI also provided Amelco its own code for connecting ISI’s kiosks with the 16 JCM printer. ISI’s software developer Jim Gladney wrote at least one-thousand 17 lines of code to enable JCM’s software to work with kiosks obtained by ISI and 18 used at the Wildwood casino. (ECF No. 271-2 at 116–17; see also ECF No. 265-2 19 at 37–39.) 20 ISI also provided Amelco several manuals and instruction on how to comply 21 with regulations and operate a retail gambling kiosk successfully. (See, e.g., ECF 22 No. 271-3 at 12, 13.) 23 D. Amelco Starts Selling Kiosks to Large Gaming Companies. 24 Between 2021 and 2024, AUK entered lucrative contracts with gambling 25 companies Hard Rock, Fanatics, WynnBET, Wind River, and Saracen to provide 26 retail kiosks at their casinos. (ECF No. 272-3 at 214.) ISI has provided evidence 27 of former AUK executives and employees stating that the Amelco parties used 28 information and assistance from ISI to develop AUK’s kiosks. (See ECF Nos. 245- 1 13 at 5; 272-3 at 10.) Facts on the record suggest that AUK’s developers did not 2 use a clean-room or otherwise segregate confidential information while 3 developing its kiosks. (ECF No. 272-3 at 64.) 4 II. Procedural History 5 ISI sued AUK and AUSA in Nevada State Court in 2023, and the Amelco 6 parties removed the action to this Court. (ECF No. 1.) 7 The operative complaint is ISI’s Second Amended Complaint (ECF No. 70), 8 which alleges breach of the NDA and MCA (claims 1 and 2), fraudulent 9 inducement (claim 3), breach of the kiosk agreement or its implied covenant of 10 good faith and fair dealing (claims 4 and 6), promissory estoppel and detrimental 11 reliance regarding the kiosk agreement (claim 5), misappropriation of trade 12 secrets under the federal Defend Trade Secrets Act (DTSA) and Nevada Uniform 13 Trade Secrets Act (NUTSA) (claims 7 and 8), unjust enrichment (claim 9), 14 quantum meruit (claim 10), fraud (claim 11), and negligent misrepresentation 15 (claim 12). 16 III. Standard of Review 17 A party moving for summary judgment must show that there is no genuine 18 issue as to any material fact in the claims for which it seeks summary judgment. 19 See Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). 20 Once the moving party satisfies its burden, the burden shifts to the nonmoving 21 party to “set forth specific facts showing that there is a genuine issue for trial.” 22 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). The Court views the 23 evidence and draws all reasonable inferences in the light most favorable to the 24 non-moving party. Behrend v. San Francisco Zen Ctr., Inc., 108 F.4th 765, 768 25 (9th Cir. 2024). For cross-motions for summary judgment, the Court considers 26 each party's evidence without considering which motion provided the evidence. 27 Las Vegas Sands, LLC v. Nehme, 632 F.3d 526, 532 (9th Cir. 2011). 28 Amendments to Federal Rule of Civil Procedure 56 in 2010 clarify that the 1 substance of evidence offered in response to a motion for summary judgment 2 must be admissible at trial, but such evidence does not need to “be admissible in 3 its present form.” See Tamares Las Vegas Properties, LLC v. Travelers Indem. Co., 4 409 F. Supp. 3d 924, 945 (D. Nev. 2019) (cleaned up). 5 IV. Analysis 6 The Amelco parties seek summary judgment on all claims, arguing that 7 none of the contracts protecting ISI’s confidential information were valid, that 8 ISI’s common-law equitable-contract and tort claims do not apply or are 9 preempted by ISI’s trade-secret claims, and that ISI waived its trade-secret 10 protections, failed to adequately identify its trade secrets, and otherwise failed to 11 show misappropriation of trade secrets. 12 ISI seeks summary judgment on elements of its contract claims, namely 13 that each contract bound AUSA and AUK, and also seeks summary judgment on 14 the Amelco parties’ affirmative defenses. 15 The Court first considers the four contracts at issue in this case, then ISI’s 16 equitable-contract (promissory estoppel, unjust enrichment, and quantum 17 meruit) and tort claims, then ISI’s trade secret claims. The Court then considers 18 Amelco’s affirmative defenses, ISI’s motion to file a sur-reply, and both parties’ 19 motions to seal. The Court implicitly rejects any argument not addressed that is 20 inconsistent with the outcome of this order. See, e.g., PlayUp, Inc. v. Mintas, 635 21 F. Supp. 3d 1087, 1099 (D. Nev. 2022). 22 A. ISI’s Contract Claims 23 Amelco seeks summary judgment on all of ISI’s contract claims, taking the 24 position that the only binding contract between the Amelco parties and ISI is the 25 License Agreement. (See ECF No. 281 at 7, 33, 36.) ISI seeks summary judgment 26 that the NDA binds AUSA—and AUK as its alter ego—from March 2019 onward 27 and that the MCA binds AUSA and AUK from disclosing ISI’s confidential 28 materials. (See ECF No. 263 at 13.) 1 “It has long been the policy in Nevada that absent some countervailing 2 reason, contracts will be construed from the written language and enforced as 3 written.” Kaldi v. Farmers Ins. Exch., 21 P.3d 16, 20 (Nev. 2001). “[C]onstruction 4 of a contractual term is a question of law.” Sheehan & Sheehan v. Nelson Malley 5 & Co., 117 P.3d 219, 223 (Nev. 2005); The Power Co. v. Henry, 321 P.3d 858, 863 6 (Nev. 2014) (“when a contract's language is unambiguous,” a court “will construe 7 . . . it according to that language”). “Whether a contract is ambiguous likewise 8 presents a question of law.” Galardi v. Naples Polaris, LLC, 301 P.3d 364, 366 9 (Nev. 2013) (internal citation removed). A contract is ambiguous if its terms may 10 reasonably be interpreted in more than one way. Id. (internal citations removed). 11 1. The NDA 12 The Amelco parties argue that the March 2019 NDA dissolved when ISI and 13 AUSA entered the License Agreement six weeks later. ISI disagrees and argues 14 that the March 2019 NDA unambiguously binds AUSA. 15 ISI and AUSA dispute whether the NDA expired on its own terms. See 16 Galardi, 301 P.3d at 366 (holding that a contract is “ambiguous if its terms may 17 reasonably be interpreted in more than one way”). The language of the NDA 18 suggests that it was meant to be replaced by a successive contract. At several 19 points, it discusses a “Possible Transaction,” “Possible Transactions,” and 20 “Definitive Agreement,” all of which allow for a reasonable inference that it was a 21 temporary contract meant to last only until the next, more complete agreement. 22 (See, e.g., ECF No. 262-1 at 3 (confidential information may be used “only in 23 connection with the discussions . . . regarding the Possible Transactions”).) 24 The NDA also contains a termination clause that suggests it only expires if 25 the “Possible Transaction” does not take place. (See ECF No. 262-1 at 4 (NDA will 26 “expire and terminate two (2) years from the date either Party notifies the other 27 in writing that discussions concerning the Possible Transaction are terminated, 28 whichever occurs first”).) It has no term explaining expiration if the possible 1 transaction in fact takes place. See Galardi, 301 P.3d at 366 (ambiguity may arise 2 through “indefiniteness in expression”). Viewed in the light most favorable to ISI, 3 terminating the contract during or after the possible transaction may have 4 required some kind of express repudiation. Additionally, the NDA’s use of the 5 plural “Possible Transactions” allows for a reasonable inference that the parties 6 intended the NDA to persist beyond the next transaction. 7 Amelco argues that the generic merger clause in the License Agreement 8 leaves no genuine issue of fact regarding expiration of the NDA. A successive 9 contract or “novation” extinguishes an obligation from a previous contract when 10 the existing contract and the new contract are valid, and the parties mean for the 11 new contract to extinguish the old contract. United Fire Ins. Co. v. McClelland, 12 780 P.2d 193, 195 (Nev. 1989). Whether a novation occurred is a question of law 13 only when the manifest intent of the parties is unequivocal. Id. at 195–96; see 14 also Granite Constr. Co. v. Remote Energy Sols., LLC, 403 P.3d. 683, at *2 (Nev. 15 2017) (unpublished disposition). 16 Disputed issues of fact prevent the Court from entering summary judgment 17 for AUSA or ISI on the novation. See McClelland, 780 P.2d at 195 (novation a 18 question of fact when “evidence is such that reasonable persons can draw more 19 than one conclusion”). The License Agreement’s integration clause states that it 20 is the “entire understanding and agreement” of the signatories: AUSA, ISI, and 21 AUK. (ECF No. 262-2 at 8.) Without an express novation of the NDA between 22 AUSA and ISI, it is ambiguous whether the parties intended to extinguish the 23 NDA. See Galardi, 301 P.3d at 366. Facts on the record suggest that it was not 24 ISI’s intent: ISI’s president Bill Stearns wrote in an email shortly after entering 25 the License Agreement that “ISI has an NDA signed with Amelco,” a fact which 26 allows for the inference that at the time of entering the License Agreement, ISI 27 did not believe that the License Agreement had extinguished the NDA. (ECF No. 28 272-4 at 46.) 1 Accordingly, the Court denies both motions for summary judgment 2 regarding the novation of the NDA. 3 2. Alter Ego 4 Both parties seek summary judgment on the question of whether AUK may 5 be bound under the NDA as AUSA’s alter ego. 6 While this case is properly before the Court on both diversity and federal 7 question grounds, the alter ego doctrine applies only to ISI’s state law breach-of- 8 contract claim, so the Court applies Nevada choice-of-law rules. See California 9 Dep't of Toxic Substances Control v. Jim Dobbas, Inc., 54 F.4th 1078, 1089 (9th 10 Cir. 2022) (applying state, not federal, choice-of-law rules when state law supplies 11 substantive rule of decision). Under Nevada law, whether the members of an LLC 12 can be held liable for the LLC’s actions is decided under the law of that LLC’s 13 state of incorporation. See Volvo Const. Equip. Rents, Inc. v. NRL Rentals, LLC, 14 614 Fed. Appx. 876, 879–80 (9th Cir. 2015) (district court improperly applied 15 Nevada law in alter ego analysis of Texas-incorporated LLCs). AUSA is 16 incorporated in Delaware, so Delaware law applies for the alter ego analysis. (ECF 17 No. 263-6 at 5.) 18 Under Delaware law, summary judgment is inappropriate on an alter ego 19 claim of liability if the plaintiff presents evidence allowing a factfinder to infer that 20 separate corporate forms were meant to “eradicate the corporate structure of [the 21 defendant] and its subsidiaries.” Vichi v. Koninklijke Philips Elecs. N.V., 62 A.3d 22 26, 49 (Del. Ch. 2012). “Mere dominion and control of a parent over a subsidiary” 23 does not alone allow for a claim of alter ego, and instead, the claimant must put 24 forward evidence from which a factfinder could infer that the Defendant and its 25 alleged alter ego “are involved in an elaborate shell game or are otherwise abusing 26 the corporate form to effect a fraud.” Outokumpu Eng'g Enters., Inc. v. Kvaerner 27 EnviroPower, Inc., 685 A.2d 724, 729 (Del. Super. Ct. 1996). Delaware courts 28 consider “(1) whether the company was adequately capitalized for the 1 undertaking; (2) whether the company was solvent; (3) whether corporate 2 formalities were observed; (4) whether the dominant shareholder siphoned 3 company funds; and (5) whether, in general, the company simply functioned as 4 a façade for the dominant shareholder.” Manichaean Cap., LLC v. Exela Techs., 5 Inc., 251 A.3d 694, 706 (Del. Ch. 2021) (internal citations omitted). 6 Disputed facts on the record prevent the Court from deciding the alter ego 7 question at summary judgment. ISI has provided evidence that AUSA was in fact 8 a façade for AUK. An email from AUSA’s outgoing President, Rob Bone, explained 9 that Damian Walton, AUK’s co-owner, would continue as one of two main 10 principals at AUSA; AUK’s CEO would “continue to assist with all US business 11 initiatives;” AUK’s project manager would “continue to lead all development and 12 product management efforts;” and AUK’s Project Specialist would “continue to 13 facilitate all customer support and JIRA deliverables.” (ECF No. 263-10 at 2.) A 14 reasonable factfinder could infer from this email that AUSA was a front for AUK. 15 ISI has pointed to other facts on the record suggesting that AUSA maintains a 16 low cash flow and lists Robert Miller’s other company’s headquarters as its official 17 headquarters, while in fact AUK employees in the UK run AUSA’s day-to-day 18 business. (See ECF No. 262-6.) Answers from Robert Miller’s deposition allow a 19 reasonable factfinder to infer that Damian Walton, AUK’s co-owner, is ultimately 20 responsible for decisions made by AUSA. (See id.)1 Sufficient evidence exists for 21 a reasonable factfinder to infer that AUK formed AUSA as a front, which, when 22 viewed in the light most favorable to ISI, enabled it to engage in underhanded 23 business tactics. 24 On the other hand, viewed in the light most favorable to the Amelco parties, 25 1 While not a basis for its decision, the Court notes that the Amelco parties 26 simultaneously argue that Rob Bone lacked actual authority—as president of 27 AUSA—to sign contracts on behalf of the company, (ECF No. 273 at 32), and that the alleged principal of AUSA, Rob Miller, explained his title at AUSA as, “I believe 28 I’m the president.” (ECF No. 262-6 at 5.) 1 facts on the record suggest that AUSA is merely a distributor for AUK’s products 2 in the United States (see, e.g., ECF No. 266-2 at 109), that AUSA has maintained 3 solvency and paid its debts throughout its existence, that AUSA has undertaken 4 its own business deals separate from AUK, and that Miller and Walton 5 collaboratively ran the company. (See ECF No. 266 at 76.) Accordingly, enough 6 disputed facts exist to preclude summary judgment for either party on the alter 7 ego question. The Court denies both motions. 8 3. The MCA 9 The Amelco parties seek summary judgment on ISI’s claims for express 10 breach of the MCA on behalf of AUSA by arguing that AUSA’s representative 11 lacked apparent authority to sign the 2019 MCA. ISI seeks summary judgment 12 as to whether the MCA created confidentiality obligations between ISI, AUSA and 13 AUK. The Amelco parties respond that the MCA only created obligations between 14 a third party—JCM—and the Amelco companies and JCM and ISI. 15 a. Apparent Authority 16 The Amelco parties argue that AUSA’s President Rob Bone lacked apparent 17 or actual authority to sign the MCA. (ECF No. 273 at 32.) “Apparent authority is 18 that authority which a principal holds [its] agent out as possessing or permits 19 [the agent] . . . to represent [the agent] as possessing, under such circumstances 20 as to estop the principal from denying its existence.” Simmons Self-Storage v. Rib 21 Roof, Inc., 331 P.3d 850, 857 (Nev. 2014), as modified on denial of reh'g (Nov. 24, 22 2014). “A party claiming apparent authority of an agent as a basis for contract 23 formation must prove (1) that he subjectively believed that the agent had 24 authority to act for the principal and (2) that his subjective belief in the agent’s 25 authority was objectively reasonable.” Great Am. Ins. Co. v. Gen. Builders, Inc., 26 934 P.2d 257, 261 (Nev. 1997); see also Bradley v. Nevada-California-Oregon Ry., 27 178 P. 906, 907 (Nev. 1919) (courts may presume agent “clothed with a title 28 implying general powers, as vice president . . . is what the corporation holds him 1 out as being”). 2 Undisputed facts on the record show that Rob Bone held himself out as 3 President of AUSA in communications with AUSA’s principal Rob Miller. (See ECF 4 No. 279-3 at 2.) Rob Bone signed the MCA as president of AUSA. (ECF No. 262- 5 3 at 8.) Accordingly, AUSA’s principal, Miller, effectively held Bone out as 6 president of AUSA, and ISI reasonably believed that Bone had authority to enter 7 contracts. Because the Court rejects the Amelco parties’ argument regarding 8 apparent authority, there is no need to address the parties’ arguments regarding 9 Bone’s actual authority. 10 b. Confidentiality Obligations 11 The MCA unambiguously creates confidentiality obligations between ISI 12 and the Amelco companies. See Kaldi, 21 P.3d at 20 (“contracts will be construed 13 from the written language”); The Power Co., 321 P.3d at 863 (“when a contract’s 14 language is unambiguous,” a court “will construe . . . it according to that 15 language”); see also MMAWC, LLC v. Zion Wood Obi Wan Trust, 448 P.3d 568, 572 16 (Nev. 2019) (parties’ intent discerned from four corners of the contract). The MCA 17 defines the parties as JCM, ISI, AUSA, and AUK. (ECF No. 262-3 at 3.) The MCA 18 defines “Disclosing Party” as “the Party disclosing its Confidential Information 19 under this Agreement” and “Receiving Party” as “the Party receiving the 20 Disclosing Party’s Confidential Information.” (Id.) The MCA then creates a 21 confidentiality obligation between Disclosing Parties and Receiving Parties. (Id.; 22 id. at 5.) 23 The Amelco parties argue that one paragraph stating that JCM should 24 mark confidential material creates an issue of fact about whether the contract 25 created a relationship only between JCM and ISI and JCM and the Amelco 26 parties, respectively. (ECF No. 266 at 70.) While it is true that every word in a 27 contract “must be given effect if at all possible,” this paragraph is plainly read as 28 encouraging JCM—a party new to the project—to mark its confidential materials, 1 not as limiting the Amelco parties’ obligations to ISI. See Musser v. Bank of Am., 2 964 P.2d 51, 54 (Nev. 1998) (internal citations omitted). This paragraph does not 3 make the contract ambiguous, nor does it override the clear language defining 4 the confidentiality relationship between disclosing and receiving parties. See 5 Galardi, 301 P.3d at 366. 6 Accordingly, the Court denies the Amelco parties’ motion for summary 7 judgment on the MCA and grants ISI’s motion for summary judgment on the issue 8 of whether the MCA created a confidentiality obligation between ISI and the 9 Amelco companies. 10 4. The Kiosk Agreement 11 The Amelco parties argue that ISI and the Amelco parties never executed a 12 Kiosk Agreement, nor did they ever reach consensus on the material terms and 13 conditions of such an agreement. (ECF No. 266 at 22–23, 37.) ISI responds that 14 because ISI and the Amelco parties completed transactions on terms similar to 15 those in draft agreements, a factfinder could reasonably find a contract to exist. 16 (ECF No. 271 at 66.) 17 In Nevada, a valid contract requires “offer and acceptance, meeting of the 18 minds, and consideration.” May v. Anderson, 119 P.3d 1254, 1257 (Nev. 2005). 19 “[P]reliminary negotiations do not constitute a binding contract unless the parties 20 have agreed to all material terms.” Id. Nevada law recognizes that parties seeking 21 a written contract usually reach preliminary agreement on some terms before 22 finalizing the written contract. Dolge v. Masek, 268 P.2d 919, 921 (Nev. 1954). If 23 the written contract never materializes, a party seeking to show that the 24 preliminary agreement was itself an immediately binding agreement must do so 25 with evidence that is “convincing and subject to no other reasonable 26 interpretation.” Tropicana Hotel Corp. v. Speer, 692 P.2d 499, 502 (Nev. 1985) 27 (citing Dolge, 268 P.2d at 921); see also Loma Linda Univ. v. Eckenweiler, 469 28 P.2d 54, 56 (Nev. 1970); see also Decesare v. Tirrell, 445 P.3d 219 at *1 (Nev. 1 2019) (unpublished disposition). 2 ISI has not shown a possibility of meeting the evidentiary threshold 3 required by Dolge and its progeny. First, both ISI and the Amelco parties 4 anticipated a written contract governing provision of kiosks, as shown by ISI 5 sending AUSA a draft Kiosk Agreement with extensive terms and conditions. (See 6 ECF No. 266 at 21–22.) AUSA and, later, AUK did not agree to this draft and 7 counteroffered with their own drafts with substantially different terms, which ISI 8 also rejected. (See ECF No. 265-1 at 199, 200–01; ECF No. 266-2 at 120–25.) This 9 back-and-forth continued over the next year and a half until—in ISI’s president’s 10 own words—AUK’s Chief Operating Officer “killed the deal” by stopping 11 negotiations. (ECF No. 266-1 at 4–5; ECF No. 266-2 at 50; ECF No. 266-3 at 114, 12 116, 127.) 13 ISI argues that because it provided kiosks to AUK at the price term used in 14 drafts of the Kiosk Agreement, whether the Kiosk Agreement existed is a question 15 of fact. (ECF No. 271 at 66.) Even if ISI had begun performing according to its 16 view of the Kiosk Agreement, that fact does not create a genuine issue regarding 17 AUK accepting the Kiosk Agreement. See Tropicana Hotel, 692 P.2d at 502 18 (internal citations omitted) (denying argument that performance constituted 19 acceptance “where the evidence clearly shows that the party performing did not 20 consider the agreement to be binding”). Even viewed in the most favorable light 21 to ISI, neither it nor Amelco considered the Kiosk Agreement final or binding. See 22 Loma Linda Univ., 469 P.2d at 56 (entering judgment as matter of law against 23 breach claimant where parties contemplated written agreement but never 24 reached acceptance). 25 Accordingly, the Court need not consider the remaining arguments 26 regarding statute of frauds. The Court grants the Amelco parties summary 27 judgment on ISI’s claims for breach of the Kiosk Agreement and breach of its 28 implicit covenant of good faith and fair dealing. 1 B. Equitable Contract Claims 2 Amelco seeks summary judgment on ISI’s claims for promissory estoppel, 3 unjust enrichment, and quantum meruit. Amelco argues that ISI has not met the 4 elements for any of these claims. 5 1. Promissory Estoppel 6 Amelco argues that ISI cannot succeed on its promissory estoppel claim in 7 place of its claims under the Kiosk Agreement because there was never a 8 completed promise. In Nevada, promissory estoppel applies to “[a] promise which 9 the promisor should reasonably expect to induce action or forbearance . . . does 10 induce such action” and injustice can only be avoided by enforcing that promise. 11 Dynalectric Co. of Nevada v. Clark & Sullivan Constructors, Inc., 255 P.3d 286, 12 288 (Nev. 2011) (quoting Restatement (Second) of Contracts § 90(1) (1981)). The 13 doctrine “is intended as a substitute for consideration, and not as a substitute 14 for an agreement between the parties.” Vancheri v. GNLV Corp., 777 P.2d 366, 15 369 (Nev. 1989). “The promise giving rise to a cause of action for promissory 16 estoppel must be clear and definite . . . [and] made in a contractual sense.” Torres 17 v. Nev. Direct Ins. Co., 353 P.3d 1203, 1209 (Nev. 2015) (internal citation omitted). 18 Because the Court has held that there was no promise between the parties 19 regarding the Kiosk Agreement, promissory estoppel does not apply. 20 Accordingly, the Court grants the Amelco Parties’ motion for summary 21 judgment on ISI’s promissory estoppel claim based on the Kiosk Agreement. 22 2. Unjust Enrichment and Quantum Meruit 23 The Amelco parties argue for summary judgment on ISI’s unjust 24 enrichment and quantum meruit claims because ISI has failed to show evidence 25 of damages. 26 Unjust enrichment requires a plaintiff to show that it conferred a benefit 27 on the defendant, that the defendant appreciated that benefit, and that the 28 defendant accepted and retained the benefit under such circumstances that it 1 would be inequitable for the defendant to retain that benefit without paying. 2 Nautilus Ins. Co. v. Access Med., LLC, 482 P.3d 683, 688 (Nev. 2021) (citing Cert. 3 Fire Prot. Inc. v. Precision Constr., 283 P.3d 250, 257 (Nev. 2012)). “In a case with 4 a quantum meruit or unjust enrichment theory of recovery, the proper measure 5 of damages is the reasonable value of the services.” Asphalt Prods. Corp. v. All 6 Star Ready Mix, Inc., 898 P.2d 699, 701 (Nev. 1995) (citing Flamingo Realty v. 7 Midwest Development, 879 P.2d 69, 71 (Nev. 1994)) (internal formatting removed). 8 The Amelco parties argue that ISI’s allegation that it spent “thousands of 9 man-hours” on the Kiosk Co-Development Project lacks support in the record. 10 (ECF No. 266 at 48.) ISI points to enough facts on the record for a reasonable 11 factfinder to assess at least some damages based on unjust enrichment. ISI’s 12 President testified to having meetings and phone calls discussing a “flat rate fee” 13 or “reward basis” for ISI’s services in procuring and administering retail gambling 14 kiosks, at $1,000 per kiosk and $100 per month per kiosk for an undetermined 15 period. (See ECF No. 271-3 at 44.) Additionally, enough facts in the record exist 16 from which a factfinder could infer that ISI suffered damages from Amelco 17 stringing it along. (See, e.g., ECF No. 271-3 at 6 (ISI providing Amelco with 18 knowledge of companies that perform key tasks in kiosk gambling operations); 19 see also ECF 272-3 at 123 (estimating profits made from AUK’s retail sports- 20 gambling contracts in the United States)). 21 The Amelco parties next argue that Section 7 of the License Agreement, 22 providing for “bespoke customization” of Amelco’s product, precludes ISI’s unjust 23 enrichment and quantum meruit claims. (ECF No. 266 at 47.) ISI argues that the 24 language of Section 7 of the License Agreement refers to Amelco’s obligations to 25 ISI for a specific customization task unrelated to developing retail kiosks. 26 Courts may not “interpolate in a contract what the contract does not 27 contain.” State Dep't of Transportation v. Eighth Jud. Dist. Ct. in & for Cnty. of 28 Clark, 402 P.3d 677, 682 (Nev. 2017). Sections 7(a) and 7(b) of the License 1 Agreement allow ISI to pay Amelco for customizing Amelco’s system. (ECF No. 2 262-2 at 4–6.) Section 7(c) of the License Agreement, which refers to Section 6(a) 3 of the same agreement, allows Amelco to pay ISI for helping Amelco “modify its 4 risk management screens to make the formatting consistent with that used in 5 Nevada.” (Id.) This is a much narrower subject matter than the broader kiosk 6 Americanization and development projects for which ISI is seeking relief. Amelco’s 7 argument regarding Section 7(c) of the License Agreement fails as a matter of 8 contract interpretation. 9 Because the Court denies the Amelco parties’ arguments regarding 10 summary judgment on ISI’s unjust enrichment and quantum meruit claims for 11 absence of damages, it will not address ISI’s argument regarding disgorgement 12 and will allow the parties to argue for the appropriate remedy at a later stage in 13 litigation. 14 C. Tort Claims 15 Amelco argues that ISI has not shown evidence of a false or negligent 16 misrepresentation, or a material omission, required for ISI’s fraud, negligent 17 misrepresentation, and fraudulent inducement claims. (ECF No. 266 at 53.) 18 In Nevada, fraud requires showing “(1) a false representation, (2) the 19 defendant's knowledge or belief that the representation is false, (3) the 20 defendant's intention to induce the plaintiff's reliance, (4) the plaintiff’s justifiable 21 reliance, and (5) damages.” Nevada State Educ. Ass’n v. Clark Cnty. Educ. Ass’n, 22 482 P.3d 665, 675 (Nev. 2021). Negligent misrepresentation requires showing 23 that a defendant has supplied “false information for the guidance of others in 24 their business transactions,” and failed “to exercise reasonable care or 25 competence in obtaining or communicating the information” to the plaintiff, 26 resulting in damages to the plaintiff. See Halcrow, Inc. v. Eighth Jud. Dist. Ct., 27 302 P.3d 1148, 1153 (Nev. 2013), as corrected (Aug. 14, 2013) (internal citations 28 omitted). Fraudulent concealment requires showing that a defendant concealed 1 a material fact that it had a duty to disclose with the intent to defraud the plaintiff 2 and induce it to act differently; the plaintiff was unaware of this and would have 3 acted differently but for the concealment; and the plaintiff was harmed as a 4 result. See Leigh-Pink v. Rio Properties, LLC, 512 P.3d 322, 325–26 (Nev. 2022) 5 (citation omitted). 6 ISI has provided sufficient evidence that the Amelco parties made material 7 omissions regarding their intent to contract and continue working with ISI. See 8 Blanchard v. Blanchard, 839 P.2d 1320, 1322 (Nev. 1992) (fraudulent 9 representation may be misleading “because it partially suppresses or conceals 10 information”). AUK’s head of business development stated in his deposition that 11 while he knew ISI wanted to finalize the Kiosk Agreement, that for Amelco “it was 12 never gonna fly.” (ECF No. 272-3 at 68, 69.) Evidence from former Amelco 13 executives suggests that it relied on ISI’s assistance and confidential information 14 to develop its own rival kiosks. (See ECF Nos. 245-13 at 5.) Together, this is 15 enough for a reasonable juror to find that the Amelco parties were stringing ISI 16 along to develop a rival product. 17 Amelco next argues that ISI has failed to show justified reliance on any 18 representations made by the Amelco parties. A party may show reliance based on 19 inferences that if the omitted information were disclosed, the party would have 20 “been aware of it and behaved differently.” See Beauregard v. Sampson, No. 2:20- 21 CV-02123-KJD-DJA, 2022 WL 17813072, at *3-4 (D. Nev. Sept. 28, 2022), 22 reconsideration denied, No. 2:20-CV-02123-KJD-DJA, 2023 WL 4826519 (D. Nev. 23 June 6, 2023) (cleaned up). ISI has provided enough record evidence showing 24 that its executives reasonably expected a kiosk agreement to go forward that 25 would allow a reasonable factfinder to infer that ISI would have stopped sharing 26 information with Amelco if it had known that Amelco had no intent to move 27 forward with an agreement. (See e.g., ECF No. 272-5 at 16.) 28 Finally, the Amelco parties argue that ISI lacked any duty to disclose 1 anything to ISI. (ECF No. 266 at 55.) A duty of truthfulness attaches when parties 2 have begun negotiations, even if the negotiations ultimately fail. See Beauregard, 3 2022 WL 17813072, at *3. 4 Accordingly, the Court holds that sufficient evidence exists for ISI’s fraud, 5 negligent misrepresentation, and fraudulent concealment claims to move 6 forward. The Court therefore denies Amelco’s motion for summary judgment as 7 to these claims. 8 D. Preemption of Common-Law Claims Under NUTSA 9 The Amelco parties argue that all ISI’s common law claims—unjust 10 enrichment, quantum meruit, fraudulent inducement, intentional 11 misrepresentation, and negligent misrepresentation—are preempted by the 12 Nevada Uniform Trade Secret Act (NUTSA). (ECF No. 266 at 46, 51.) ISI responds 13 that preclusion should only be applied after a factfinder has determined that the 14 relevant information qualifies as a trade secret. 15 “NRS 600A.090 precludes a plaintiff from bringing a tort or restitutionary 16 action based upon misappropriation of a trade secret beyond that provided by” 17 NUTSA. Frantz v. Johnson, 999 P.2d 351, 357 (Nev. 2000). Whether information 18 is a trade secret is a question of fact. Id. at 358. There is no need to apply 19 preclusion doctrine until there has been a resolution as to whether the items 20 provided to the Amelco parties qualify as trade secrets. See Integrated Direct 21 Mktg., LLC v. May, 129 F. Supp. 3d 336, 347 (E.D. Va. 2015), aff’d, 690 F. App’x 22 822 (4th Cir. 2017); see also Frantz, 999 P.2d at 357–58 (holding that the “district 23 court erred in awarding damages” based on common-law claims). Accordingly, 24 the Court denies this argument at this time but permits the Amelco parties to 25 renew it should a factfinder find that ISI has proven that its alleged confidential 26 information qualifies as trade secrets. 27 E. Trade Secret and Confidential Information Claims 28 The Amelco parties argue that ISI has failed to maintain the confidentiality 1 of its alleged trade secrets and contractually confidential information, that ISI 2 has not sufficiently identified its trade secrets and confidential information, and 3 that ISI has failed to show any misappropriation. 4 1. Waiver of Confidentiality 5 Amelco argues that ISI waived confidentiality of its trade secrets and 6 confidential information through its filings in this court. (ECF No. 266 at 56 7 (citing ECF No. 155).) The party asserting claims involving trade secrets must 8 take reasonable efforts to maintain secrecy. See NRS 600A.030(5)(b); 18 U.S.C. § 9 1839(3)(A) (same); see also ECF No. 262-3 at 4–5 (excluding from protection 10 information which later becomes public through no fault of the other party). 11 Public filing of trade secrets may be a basis for deeming trade-secret claims 12 waived. See Saini v. Int’l Game Tech., 434 F. Supp. 2d 913, 919 (D. Nev. 2006). 13 Though the Amelco parties contend that ISI’s interrogatory responses and 14 revised log of trade secrets waived confidentiality, these do not contain the actual 15 trade secrets ISI alleges that the Amelco parties misused. The trade-secret log 16 contains descriptions like, “ISI’s entire playbook,” “custom-written code,” “details 17 for retail teller reports,” “kiosk admin panel,” “knowledge and show-how 18 regarding the event log,” “assistance in creating Meter reports and details of those 19 reports.” (ECF No. 129-4 at 2.) The discovery responses include lists like “ISI’s 20 supplier and vendor lists,” “ISI’s proprietary on-kiosk software, including the 21 architecture, features, and capabilities of that software,” “ISI’s back-office 22 reporting module software, which included approximately 20 component reports 23 and the detailed roadmap to enable use,” “ISI’s proprietary and confidential 24 methods and systems for achieving regulatory compliance and approval for use 25 in U.S. jurisdictions.” (ECF No. 129-2 at 11; ECF No. 129-3 at 11.) These 26 descriptions did not waive confidentiality. 27 2. Insufficient Identification of Trade Secrets 28 The Amelco parties next argue that the items identified by ISI were not 1 trade secrets or confidential. (ECF No. 266 at 57.) 2 Under the Defend Trade Secrets Act (DTSA) and NUTSA, “the definition of 3 what may be considered a ‘trade secret’ is broad,” and trade secrets broadly 4 consist of “(1) information, (2) that is valuable because it is unknown to others, 5 and (3) that the owner has attempted to keep secret.” InteliClear, LLC v. ETC Glob. 6 Holdings, Inc., 978 F.3d 653, 657 (9th Cir. 2020). 7 a. ISI’s Playbook 8 The Amelco parties argue that ISI’s compilation trade secret, its “playbook,” 9 is not confidential because ISI claimed to have particularly identified it in its 10 interrogatory responses and log. (ECF No. 266 at 57.) ISI’s President, however, 11 described the playbook as a compilation of feedback, the “MICS” or “MIX” manual 12 describing internal controls for retail sports betting systems, including software, 13 hardware, GLI, casino standards, and state gaming authority regulations, an 14 operations manual with standard operating procedure, and other informally 15 provided advice. (ECF No. 271-3 at 12, 13.) There is enough of a question of fact 16 to permit a factfinder to assess whether the playbook was a trade secret. 17 b. ISI’s Kiosks and Instances of Software 18 The Amelco parties next argue that ISI has not provided evidence that 19 instances of ISI’s back-end software were protected by confidentiality provisions, 20 pointing to ISI’s interrogatory responses, in which it stated that there are no 21 confidentiality agreements between the various third parties it sold kiosks too. 22 (See ECF No. 266-3 at 146–48.) ISI responds by stating that reporting features 23 and functionality of its software were “non-public, protected by access 24 credentials, [and] shared under NDA.” (ECF No. 271 at 22; ECF No. 301 at 69.) 25 ISI’s cited exhibit, ISI President Bill Stearns’s deposition testimony, does not state 26 that ISI’s other kiosk customers used the back-end system under a confidentiality 27 obligation. (See ECF No. 271 at 22.) Accordingly, without facts on the record 28 showing that instances of back-end software would have been confidential, ISI 1 has not met its burden to show these instances of software were trade secrets or 2 confidential. 3 c. ISI’s Code for the JCM Printer 4 Amelco next argues that ISI’s custom code that enabled JCM printers to 5 work with its kiosks—items 4, 5, 6, and 14 on its trade-secret log—is not a 6 protectable trade secret because such code was available from JCM. See Barton 7 Assocs. Inc. v. Trainor, 507 F. Supp. 3d 1163, 1166-67 (D. Ariz. 2020) 8 (information about a third party not confidential if obtainable from the third 9 party); (ECF No. 266 at 58, 66–67). ISI cites to deposition testimony from ISI 10 software developer Jim Gladney stating that around two-thousand lines of 11 relevant code in these programs were not developed by JCM and were in fact 12 “completely written” by Gladney and provided to no one outside of ISI except 13 Amelco. (ECF No. 271-2 at 116–17; see also ECF No. 265-2 at 37–39.) This 14 suffices to reject Amelco’s argument. 15 Amelco also argues that this code was not confidential because it was 16 provided to Amelco before ISI, Amelco, and JCM entered the MCA, and because 17 it was made using JCM’s proprietary coding language. (ECF No. 266 at 66.) ISI’s 18 expectation of confidentiality regarding this code is an issue of fact, and sufficient 19 facts on the record—such as the NDA and the contemporaneous email in which 20 ISI’s president Bill Stearns expressed belief that the parties had a confidentiality 21 relationship—preclude summary judgment on this point. (See ECF No. 272-4 at 22 46.) 23 Amelco next argues that ISI has not shown that Defendants used this 24 specific code in their kiosks. Sufficient facts on the record—namely that Amelco 25 launched kiosks with similar capabilities after obtaining this information—would 26 allow for a juror to infer that this secret, and others, were used to develop the 27 Amelco parties’ kiosks. (See ECF Nos. 245-13 at 5; 272-3 at 10.) Accordingly, 28 facts on the record would allow a reasonable juror to find that these items were 1 confidential. 2 d. ISI’s Items Related to Partis and Wildwood 3 Amelco next argues that items 7-10 and 17-56 on ISI’s trade-secret log 4 were accessible to third parties Wildwood Casino and Partis Solutions, and thus 5 not confidential or protectable trade secrets. See Barton Assocs. Inc., 507 F. Supp. 6 3d at 1166-67. ISI provides a contract between ISI and Wildwood Casino which 7 includes a term of confidentiality that the parties would “honor and maintain the 8 confidentiality of such confidential or proprietary information as may be disclosed 9 by one party to the other, including . . . other business information related to the 10 performance of their respective responsibilities.” (ECF No. 272-2 at 107.) ISI 11 provides a marketing agreement with Partis signed in 2020 which includes a 12 provision explaining that the parties intend to “retain in confidence at all times” 13 all confidential information “disclosed by the other [p]arty.” (ECF No. 272-2 at 14 79–80.) Accordingly, facts on the record would allow a reasonable juror to find 15 that these items were confidential. 16 e. Information Related to Regulatory Requirements 17 Amelco next argues that Items 7-10, 17-18, 20-29, 31-32, 36, 43-53, and 18 56 include information required to be kept on kiosks under Colorado’s gaming 19 authority and are therefore not confidential. (ECF No. 266 at 58.) Amelco also 20 argues that Item 11, which is an “internal controls” document, has a format and 21 contents mandated by Colorado’s gaming authority. (Id.) ISI responds by stating 22 that these trade secrets are not the Colorado regulations themselves but the 23 documents and assistance provided by ISI to show Amelco how to comply with 24 these regulations. (ECF No. 271 at 57.) To support its contention, Amelco cites to 25 ISI employee Angelique Ek’s deposition testimony in which she stated that certain 26 line items in reports that ISI knew how to generate are required by the Colorado 27 Division of Gaming. (ECF No. 265-2 at 8–9.) This evidence does not obviate ISI’s 28 previous showing that ISI’s know-how and reports on how to comply with such 1 requirements were kept confidential. (See ECF No. 272-3 at 207–08 (compiling 2 ISI evidence regarding technical issues with kiosks and assistance in 3 understanding compliance regulations); see also ECF No. 272-2 at 116–39.) 4 f. Vendor Lists 5 Amelco next argues that ISI waived confidentiality of Items 15 and 16, 6 disclosure of vendors, by publicly disclosing such vendors in its publicly filed 7 interrogatory responses. (ECF No. 266 at 58.) It further argues that the vendors 8 mentioned are well-known within the industry, and some are publicly identified 9 on ISI’s website. (Id.) ISI has not responded to this argument, and the Court 10 accordingly finds that the Amelco parties have shown an absence of genuine fact 11 on the confidentiality of Items 15 and 16 in the trade-secret log. The Court 12 accordingly does not address Amelco’s arguments about identification of 13 proprietary vendor lists. (ECF No. 266 at 69.) 14 g. Undisclosed, Unidentified, and Waived Items 15 Amelco next argues that Item 57 was publicly available on ISI’s website and 16 that Items 57-60 were not adequately designated as confidential during 17 discovery. (ECF No. 266 at 59.) ISI does not respond to the first argument and 18 responds to the second that the terms of the protective order allow for retroactive 19 designation of this evidence as confidential. (ECF No. 271 at 58.) The Court finds 20 ISI’s response to the first argument regarding Item 57 waived and agrees with ISI 21 regarding the second argument. Accordingly, ISI waived confidentiality of the Item 22 57 and has not waived confidentiality for Items 58-60 by inadvertently not 23 labeling them as confidential in discovery. 24 Amelco next argues that Items 12 and 13 of ISI’s trade-secret log were never 25 provided to Amelco and are also in the public domain. (ECF No. 266 at 67–68.) 26 ISI does not respond to these arguments, and the Court accordingly accepts 27 Amelco’s arguments for granting summary judgment on these items of the trade- 28 secret log. 1 h. JIRA Logs 2 Amelco next argues that ISI’s project-management log (referred to as a 3 “JIRA log” for the name of the tool), in which ISI employee Angie Ek 4 troubleshooted issues for Amelco regarding the ISI-Amelco kiosk in Colorado does 5 not qualify as a trade secret. (ECF No. 266 at 67.) The JIRA logs detailing Ek’s 6 assistance in operating a retail sports-betting kiosk with Amelco suffice to show 7 that Ek provided “know how” and “show how” to qualify as a trade secret. (See 8 e.g., ECF No. 271-2 at 104.) Amelco also argues that because Ek was 9 troubleshooting issues in Colorado, and Amelco does not currently operate in 10 Colorado, that ISI cannot prove that Amelco misappropriated any trade secret. 11 (ECF No. 266 at 69.) A reasonable juror could infer that the sorts of 12 troubleshooting and compliance provided by Ek would apply in other 13 jurisdictions. (See ECF No. 271 at 57–58.) Amelco makes further arguments 14 regarding specific instances of JIRA logs that Amelco may have not used because 15 Ek only identified problems without providing solutions. (ECF No. 266 at 69.) 16 Parsing of these specific objections is better accomplished at the motions-in- 17 limine stage of proceedings, and the Court defers its decisions on which JIRA logs 18 may go before the jury until then. Accordingly, the question of whether Ek’s 19 assistance qualifies as a trade secret may proceed. 20 3. Misappropriation of Trade Secrets 21 Amelco argues that insufficient facts on the record exist to allow a 22 reasonable factfinder to find that the Amelco parties actually used ISI’s alleged 23 trade secrets or confidential information. (See ECF No. 281 at 23–24.) ISI’s expert 24 reports and testimony from Amelco’s former employees regarding Amelco’s intent 25 to use ISI as a model for developing retail kiosks allow for a reasonable factfinder 26 to infer that Amelco used at least some of this information—whether expressly or 27 as negative knowledge—to develop the retail sports-gambling kiosks it eventually 28 sold to casinos. (ECF No. 271 at 35–36.) The Court denies Amelco’s argument. 1 F. ISI’s Motion to Dismiss Amelco’s Affirmative Defenses 2 ISI seeks to dismiss many of Amelco’s affirmative defenses. (See ECF No. 3 263 at 40–76.) Amelco responds regarding several, but not all, of these affirmative 4 defenses. (See ECF No. 273 at 34.) As discussed at the hearing, the Court agrees 5 with Amelco’s request that disposition of many of the affirmative defenses should 6 be deferred until discovery has entirely closed. (See ECF No. 301 at 47.) 7 Accordingly, the Court grants ISI’s motion with respect to the six defenses that 8 Amelco did not respond to: Defenses Numbers 5, 8, 13, 20, AUK 23, AUK 9 24/AUSA 23, and defers disposition of the remaining affirmative defenses to a 10 later stage of litigation. (See ECF No. 279 at 23.) 11 V. Other Motions 12 A. Motion For Sur-reply (ECF Nos. 283, 284, 285) 13 The Court finds good cause to grant ISI’s motion to file a sur-reply to 14 Amelco’s motion for summary judgment. See LR 1-4 (Court may waive any local 15 rules if interests of justice require); LR 7-2. ISI’s sur-reply clarifies that the 2010 16 Amendments to Federal Rule of Civil Procedure 56 do not require evidence to be 17 admissible in its current form to create an issue of material fact on summary 18 judgment. (ECF No. 283-1 at 4.) This point of law is well-taken, and accordingly, 19 the Court grants ISI’s motion to file a sur-reply. 20 B. Motions to Seal 21 ISI sought to seal eight exhibits, including the contracts at issue in this 22 case and several deposition excerpts at issue in the motion for summary 23 judgment. (ECF No. 262.) The Amelco parties sought to seal the NDA, Licensing 24 Agreement, and MCA, among several other exhibits. (ECF No. 264.) The parties 25 have since consented to unsealing several exhibits. (See ECF Nos. 267, 269.) 26 There is a strong presumption in favor of public access to judicial filings 27 and documents. Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 597 (1978); 28 Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006). A 1 party seeking to overcome this presumption for attachments to a dispositive 2 pleading must show “compelling reasons supported by factual findings . . . that 3 outweigh the general history of access and the public policies favoring disclosure, 4 such as the public interest in understanding the judicial process.” Id. at 1178- 5 79 (quotations omitted). District courts have broad latitude to grant protective 6 orders based on “trade secrets or . . . commercial information.” Phillips ex rel. 7 Ests. of Byrd v. Gen. Motors Corp., 307 F.3d 1206, 1211 (9th Cir. 2002). A litigant 8 may meet the “compelling reasons” standard by showing that sealing is needed 9 to prevent documents from being used “as sources of business information that 10 might harm a litigant's competitive standing.” See In re Electronic Arts, 298 F. 11 App’x 568, 569 (9th Cir. 2008) (citing Nixon, 435 U.S. at 598). “The fact that a 12 court has entered a blanket stipulated protective order and that a party has 13 designated a document as confidential pursuant to that protective order does not, 14 standing alone, establish sufficient grounds to seal a filed document.” (ECF No. 15 67 at 2 (citing Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1133 (9th 16 Cir. 2003)).) 17 Regarding sealed exhibits attached to ISI’s motion for summary judgment, 18 the Amelco parties consented “to the unsealing of Exhibits 1, 7, 8, and 10–12 19 attached to ISI’s motion.” (ECF No. 267 at 2.) ISI also requested “that all exhibits 20 to its summary-judgment motion be unsealed, with the exception of the dollar- 21 figure contained at Section 6(g) of the License Agreement (on page 4) and Exhibits 22 A through D (on pages 7-10).” (ECF No. 269 at 4.) The Amelco parties argue that 23 these exhibits to the License Agreement contain “highly confidential descriptions 24 and visual depiction of AUK’s product, pricing information, and business 25 operations.” (ECF No. 270 at 4.) In the alternative, the Amelco parties request 26 that the License Agreement and its attachments be redacted as follows: Exhibit 27 14, Clauses 1 – 6 of the License Agreement and Exhibit B; Exhibit 15, Clauses 1 28 – 7 of the License Agreement and each Exhibit; Exhibit 16, Clauses 1 – 8 of the 1 License Agreement and each Exhibit; Exhibit 17, Clauses 1 – 7 of the License 2 Agreement and each Exhibit; Exhibit 18, Clauses 1 – 7 of the License Agreement, 3 and each Exhibit; Exhibit 19, Clauses 1 – 7 of the License Agreement, and each 4 Exhibit; Exhibit 20, Clauses 1 – 8 of the License Agreement, and each Exhibit. 5 The Amelco parties originally sought to seal Exhibits 2, 10 (the 2019 NDA), 6 13, 14, 16, 17, 18, 19, 20, 24, 25, 26, 27, 28, 32, 35, 36, 37, 38, 40, 41, 42, 44, 7 45, 46, 47, 48, 49, 50, 51, 85, 86, 94, 97, 99, 101, 102, 103, 104, 109, 110, and 8 their motion for summary judgment where it quotes from those exhibits. (ECF 9 No. 264 at 1–2.) Amelco then consented to unsealing Exhibits 14, 15, 16, 17, 18, 10 19, 20, and 34, as well as Exhibits 2, 10, 13, 24, 25, 26, 32, 35, 36, 37, 38, 40, 11 41, 42, 44, 45, 46, 47, 48, 49, 50, 51, 85, 86, 94, 97, 99, 101, 102, 103, 104, 12 109, and 110 to Amelco’s motion for summary judgment (ECF No. 266). (ECF No. 13 270 at 2.) From this briefing, it appears that Amelco seeks to seal only Exhibits 14 27 and 28 of its motion, but the Court notes that these have already been filed 15 without seal. (See ECF No. 265-2 at 2–41.) Accordingly, the Court orders that all 16 the exhibits mentioned in this paragraph be filed without seal, if not already on 17 the record without seal. 18 The Court holds that the importance of the License Agreement to the 19 disposition of the motions for summary judgment compared to the showing 20 provided by the Amelco parties does not justify sealing the entire agreement. See 21 Kamakana, 447 F.3d at 1178. The Court acknowledges Amelco’s argument 22 regarding pricing and strategy details in the License Agreement, and, accordingly, 23 partially grants Amelco’s request made in the alternative to refile a redacted 24 License Agreement as detailed in its brief. (ECF No. 270 at 5.) Amelco may not 25 redact any provision of the License Agreement which this Court quotes or 26 otherwise cites in this order. 27 Similarly, the Court holds that no “compelling reasons supported by factual 28 findings” have been presented that justify sealing the MCA. See Kamakana, 447 1 F.3d at 1178; (see ECF No. 269 at 8). The MCA is critical to resolving these 2 dispositive motions and is therefore important to the public’s interest in 3 understanding the judicial process. See infra IV.A.3. The Court therefore orders 4 that its seal (Exhibit 3 in ISI’s Motion (ECF No. 263); Exhibit 31 in Amelco’s 5 Motion (ECF No. 266)) be removed or that it be filed without seal. 6 VI. Conclusion 7 Accordingly, the Court rules as follows regarding the cross-motions for 8 summary judgment (ECF Nos. 262, 263, 265, 266): 9 The Court denies both parties’ motions for summary judgment on whether 10 the NDA binds AUSA, whether the NDA was novated by the License Agreement, 11 and whether AUK is the alter ego of AUSA. (Claim 1.) 12 The Court grants ISI’s motion for summary judgment on the question of 13 whether the MCA created a duty of confidentiality between ISI, AUSA, and AUK. 14 (Claim 2.) 15 The Court grants the Amelco parties’ motion for summary judgment on 16 ISI’s breach of Kiosk Agreement, Covenant of Good Faith and Fair Dealing, and 17 Promissory Estoppel claims. (Claims 4, 5, 6.) 18 The Court denies the Amelco parties’ motion for summary judgment on 19 ISI’s Quantum Meruit, Unjust Enrichment, Fraudulent Inducement, Fraud, and 20 Negligent Misrepresentation claims. (Claims 3, 9, 10, 11, 12.) 21 The Court grants and denies the Amelco parties’ motion for summary 22 judgment on ISI’s Trade Secret claims as detailed in that section of the order. 23 (Claims 7, 8.) 24 The Court grants ISI’s motion with respect to the six defenses that Amelco 25 did not respond to: Defenses Numbers 5, 8, 13, 20, AUK 23, AUK 24/AUSA 23, 26 and defers disposition of the remaining affirmative defenses to a later stage of 27 litigation. (See ECF No. 279 at 23.) 28 The Court grants ISI’s motion for a sur-reply. (ECF No. 283.) 1 The Court grants in part and denies in part the parties’ motions to seal as 2 || explained in Section V.B, in brief that the Clerk unseal Exhibits 2, 10, 13, 14-20, 3 || 24-28, 31, 32, 34-38, 40, 41, 42, 44, 45-51, 85, 86, 94, 97, 99-104, 109, and 4 || 110 of Amelco’s motion for summary judgment (ECF No. 266) and Exhibits 1, 3, 5 || 7, 8, and 10-12 of ISI’s motion for summary judgment (ECF No. 263). If the Clerk 6 || is unable to unseal these specific exhibits because of how the parties filed their 7 || motions, the Court instructs the Clerk to notify the Court and the parties via 8 || Minute Order so that the parties may re-file these motions with relevant exhibits 9 || unsealed. 10 The Court also orders that the Amelco parties file a redacted version of the 11 || License Agreement as discussed in Section V.B. 12 13 Dated this 13th day of June, 2025. 14 18 Ars lostd Tom 16 ANNE R. TRAUM 17 UNITED STATES DISTRICT JUDGE 18 19 20 21 22 23 24 25 26 27 28