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Thorpe v. WMS Gaming, Inc.

United States District Court, N.D. Mississippi, Oxford Division

September 26, 2018

RANDE THORPE AND VIRGINIA THORPE PLAINTIFFS
v.
WMS GAMING, INC.; BALLY GAMING, INC.; SCIENTIFIC GAMES CORP.; CAESARS ENTERTAINMENT CORP.; CAESARS ENTERTAINMENT OPERATING CO., INC.; BL DEVELOPMENT CORP.; HARRAH'S TUNICA CORP.; HARRAH'S TUNICA CASINO CORP.; TUNICA ROADHOUSE CORP.; ROBINSON PROPERTY GROUP CORP.; HORSESHOE GAMING HOLDING CORP.; HORSESHOE GAMING HOLDING, LLC; HORSESHOE GP, LLC; THE MISSISSIPPI GAMING COMMISSION; AMESHA GROSS; AND VARIOUS UNKNOWN CURRENT AND FORMER EMPLOYEES OF THE MISSISSIPPI GAMING COMMISSION DEFENDANTS

          MEMORANDUM OPINION

          NEAL B. BIGGERS, JR. UNITED STATES DISTRICT JUDGE.

         This cause comes before the court upon the casino and game manufacturing defendants' motion to dismiss and upon the defendants Mississippi Gaming Commission and Amesha Gross' motion to dismiss and for qualified immunity. Upon due consideration of the motions, responses, and applicable authority, the court is ready to rule.

         Factual and Procedural Background

         The plaintiffs, Rande and Virginia Thorpe, traveled to Robinsonville, Mississippi, [1] in Tunica County in April 2013 to gamble at Caesars-owned casino properties.[2] The plaintiffs played a video poker/keno machine manufactured and distributed by Bally Gaming, Inc. Sometime shortly thereafter, Caesars employees became aware of unusual activity related to these machines which were paying out unusually high amounts. Caesars reported the unusual activity to the Mississippi Gaming Commission (“MGC”) and submitted an incident report and later notified Bally of the unusual activity. Bally began its own investigation into the matter while MGC agent, defendant Amesha Gross, began an investigation on behalf of the MGC.

         As part of its investigation, the MGC submitted questions to Bally regarding the machines and the games' software on May 14, 2013. On June 27, 2013, Gross swore out an affidavit in support of an arrest warrant for the Thorpes, and a Tunica County judge issued the arrest warrant. The affidavits supporting the warrant, sworn to by Gross, charged the plaintiffs with violating Section 75-76-301(g) of the Mississippi Code, which makes it illegal “[t]o manipulate, with the intent to cheat, any component of a gaming device in a manner contrary to the designed and normal operational purpose for the component, including, but not limited to, varying the pull of the handle of a slot machine, with knowledge that the manipulation affects the outcome of the game or with knowledge of any event that affects the outcome of the game.” Miss. Code Ann. § 75-76-301(g).

         The plaintiffs assert that Bally and Caesars and the other casino defendants collaborated with the MGC and depended on information from each other, and that, in that sense, the investigations were not independent. They allege that the defendants gathered information, records, and evidence to submit to the MGC at the same time the defendants were accusing the plaintiffs of theft. The plaintiffs contend that Gross, the MGC, Bally employees, and Caesars employees conspired together to arrest, criminally charge, and indict the plaintiffs and that they initiated the issuance of the arrest warrant despite the fact that the investigations were still pending, that the questions posed by the MGC had not yet been answered, and in the absence of any evidence of any illegal act having been committed by the plaintiffs. According to the plaintiffs, the criminal proceedings provided an avenue to the defendants to pursue civil forfeiture proceedings to attempt to recover their financial losses. They allege that Bally indemnified Caesars for $2, 000, 000.00 for the losses caused by the mis-programmed machines, and Caesars encouraged Bally to pursue forfeiture proceedings against the criminal defendants.

         Bally later submitted its “summary of findings” and a letter to the MGC on July 24, 2013, advising that one cause of the unusually high payouts was an inadvertent coding error in the software supporting the gaming machines at issue. Though this report and letter are not currently part of the record in this case at this Rule 12(b)(6) stage of the proceedings, according to the plaintiffs, the report and letter concluded that Bally software engineers involved in the coding of the machines were unaware of the error, and there was no evidence that the engineers had any contact with the plaintiffs. The plaintiffs allege that despite this information and the alleged knowledge that the plaintiffs committed no illegal act, Gross and the MGC did not recall or quash the arrest warrants for the plaintiffs, and the defendants urged the MGC and Gross, among others, to continue the investigation and to charge, arrest, indict, and criminally prosecute the plaintiffs.

         The plaintiffs learned of the warrants for their arrest in January 2014 and traveled to Mississippi to turn themselves in on or about January 22, 2014. The plaintiffs were arrested and detained and later indicted on February 3, 2014. The plaintiffs were indicted along with their acquaintance Randy Binning, who filed a similar action in this court arising from some of the same facts at issue in this case, but Binning asserted fewer claims against fewer defendants. See Binning v. Bally Gaming, Inc., No. 3:16-cv-00146-NBB-RP, 2018 WL 296782 (N.D. Miss. Jan. 4, 2018). This court denied the defendants' motion to dismiss in that case but ultimately granted summary judgment.

         The indictment claims that the plaintiffs “did unlawfully, willfully, and feloniously, claim, collect or take, United States currency, or anything of value from a gambling game without having made a wager contingent thereon, or to claim, collect or take any amount greater than the amount won.” The plaintiffs alleged that Gross and the MGC's investigation as well as Bally and Caesars' investigations combined to form the basis for the indictment against the plaintiffs.

         The plaintiffs assert that the defendants fraudulently misled the judge, grand jury, and prosecutors that the plaintiffs had committed theft and other criminal conduct by playing the machines. They further assert that the defendants deliberately withheld exculpatory information throughout this process. On June 30, 2015, the Circuit Court of Tunica County dismissed the charges against the plaintiffs finding as a matter of law that they had not committed any crime.

         The plaintiffs filed the present action in this court on June 27, 2016, and their First Amended Complaint on November 14, 2016. The First Amended Complaint asserts §§ 1983 and 1985 claims for violations of the Fourth and Fourteenth Amendments as well as claims for malicious prosecution, negligence, and products liability.

         Standard of Review

         A complaint must contain a “short and plain statement . . . showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

         “Motions to dismiss under Rule 12(b)(6) are viewed with disfavor and are rarely granted.” Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 232-33 (5th Cir. 2009). A court must accept all well-pleaded facts as true and must draw all reasonable inferences in favor of the plaintiff. Id. But the court is not bound to accept as true legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 678.

         A legally sufficient complaint must establish more than a “sheer possibility” that the plaintiff's claim is true. Id. It need not contain detailed factual allegations, but it must go beyond labels, legal conclusions, or formulaic recitations of the elements of a cause of action. Twombly, 550 U.S. at 555. In other words, the face of the complaint must contain enough factual matter to raise a reasonable expectation that discovery will reveal evidence of each element of the plaintiff's claim. Lormand, 565 F.3d at 255-57. If there are insufficient factual allegations to raise a right to relief above the speculative level or if it is apparent from the face of the complaint that there is an ...


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