Defendants in a high-profile lawsuit involving the alleged rigging of the Texas Lottery are continuing to fight attempts to expose their corporate interests.
The controversy surrounding the jackpot in question led Lt. Gov. Dan Patrick to describe the Texas Lottery as “probably the biggest money laundering scheme in the country.”
Background
The Reed v. Rook TX lawsuit arose from Jerry Reed’s $7.5 million Lotto Texas jackpot in May 2023. One month prior, Rook TX—a New Jersey-based company—claimed a $95 million jackpot after allegedly misrepresenting its date of formation in violation of Texas law.
Not only is Reed’s legal team asserting that he is entitled to the $95 million, but it is simultaneously attempting to expose a potential money laundering scheme.
To achieve this, Reed’s legal team has long been working to pierce the corporate veil and reveal the true actors behind the 2023 lottery scheme.
In July, Judge Melissa Andrews of Texas’ newly established Business Court refused to expose hidden corporate interests behind Rook TX’s alleged lottery rigging scheme.
Following Texas Scorecard’s reporting on the matter, Judge Andrews reversed her decision in August, ordering Rook TX members and partners to be disclosed to the Court but protected from public view.
Despite the reversal, Reed’s counsel amended their lawsuit to exclude the claims that had given the Business Court jurisdiction in the first place.
Judge Andrews subsequently remanded the case to the 353rd District Court.
Back in District Court
Once the case was remanded to the district court, Defendants did not comply with Judge Andrews’ discovery order. Reed therefore filed a motion to compel compliance with the Business Court’s discovery order.
Rook TX responded to this motion to compel, arguing that the aspects of the lawsuit Reed had removed served as the basis for Judge Andrews’ discovery order.
“This Court should reject Plaintiff’s gameplay because the Discovery Order has been superseded by Plaintiff’s Fourth Amended Petition, the very vehicle he used to strip the Business Court of jurisdiction,” said Rook TX.
However, the court firmly rejected this argument. On October 1, Judge Laurie Eiserloh granted Reed’s motion to compel. It was ordered that Rook TX and Rook GP LLC have five days to fully comply with Judge Andrews’ August 4 discovery order.
The Third Court of Appeals in Austin stepped in on October 3 and temporarily blocked the trial court’s discovery order to conduct a proper review. On November 7, Third Court Justices Triana, Kelly, and Theofanis decided to uphold the district court’s order granting the motion to compel.
Despite this order, multiple discovery disputes are ongoing.
Colossus Bets—a London-based gambling operator that is named as a defendant in the case—made a special appearance but reportedly refused to provide any information or documents that would allow Plaintiffs to test or rebut its jurisdictional assertions.
Reed therefore filed a motion to compel jurisdictional discovery from Colossus Bets. A hearing on the matter is set for November 24 at the Travis County Civil and Family Courts Facility.
Defendants Lottery Now, Inc., Qawi, and Quddus, Inc. filed a motion to quash Reed’s previously filed notices of intention to take oral depositions of corporate representatives. They argue their counsel now has scheduling conflicts on the dates previously set.
Defendants also argue discovery is premature as there is a pending motion to dismiss Reed’s fourth amended petition—the one which got the case remanded. Reed contends this is not relevant and there is no pending hearing on the motion.
On November 10, Reed filed an additional motion to compel these defendants’ discovery responses.
“Lottery Now, Inc. and Qawi & Quddus, Inc. are not peripheral to these events. They controlled the retail locations and lottery terminal access points where the high-volume bulk ticket printing occurred. Their activities are central to liability and damages,” reads the motion. “Yet both Defendants have refused to produce a single document or answer a single interrogatory.”
Reed is asking the court to order these defendants to serve full and complete discovery responses within 10 days of the court’s order.
If you or anyone you know has information regarding court cases, please contact our tip line: scorecardtips@protonmail.com.
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