22 Fla. L. Weekly Supp. 1145a
Online Reference: FLWSUPP 2210RIOSInsurance — Discovery — Trade secrets — Trial court departed from essential requirements of law by ordering medical provider to disclose reimbursement rates without conducting in camera inspection and determining whether discovery request will result in disclosure of trade secrets or confidential information and, if so, whether insurer demonstrated reasonable necessity for information and whether safeguards are required to prevent unnecessary dissemination of trade secrets or confidential information
VIRTUAL IMAGING SERVICES, INC., a/a/o Marline Rios, Petitioner, vs. UNITED AUTOMOBILE INSURANCE CO., Respondent. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 14-167 AP. L.T. Case No. 2012026054SP23. May 8, 2015. A petition for writ of certiorari from the County Court for Miami-Dade County. Counsel: Joseph Littman, for petitioner. Michael J. Neimand, for respondent.
(Before HERSCH, LUCK, and MILIAN, JJ.)
(PER CURIAM) The issue in this case is whether the trial court departed from the essential requirements of law when it assumed that reimbursement information requested in discovery by an insurance company was trade secret material and ordered that some of it be disclosed where the trial court did not: (a) conduct an in camera inspection; (b) make findings of fact; (c) determine whether the requested information was trade secret material; and (d) require that the insurance company show a reasonable necessity for the information. Because we agree that it did, we grant the petition and quash the trial court’s order.I.
The facts of this case are simple, and not in dispute. Petitioner Virtual Imaging Services filed a $3,600.00 personal injury protection insurance claim with respondent United Automobile Insurance Company seeking reimbursement for two magnetic resonance imaging tests it conducted on patient Marline Rios. United Insurance paid some, but not all, of Virtual Imaging’s $3,600.00 bill. Virtual Imaging sued for the difference.
During discovery, United Insurance served interrogatories on Virtual Imaging asking for the amount of money the company was reimbursed by all the insurance companies Virtual Imaging billed on behalf of its patients for the last three years for certain services. Virtual Imaging objected to this interrogatory as “irrelevant, immaterial and not reasonably calculated to lead to the discovery of admissible evidence.”
The trial court heard arguments on the objections to the interrogatory. Based on counsel’s arguments, and having reviewed the interrogatory and objections, the trial court issued the following order:
Interrogatory 5 requests for each insurance provider . . . as well as uninsured patients, for the three years preceding when the medical services were rendered . . . [to] list the amount [Virtual Imaging] was reimbursed from each insurance provider . . ., as well as uninsured patients. [Virtual Imaging]’s stated objections of, overbroad, burdensome, harassing and not reasonably calculated to lead to discovery of admissible evidence are OVERRULED. Pursuant to § 627.736(5)(a)(1), Fla. Stat., payments accepted by [Virtual Imaging] are relevant to the determination of reasonableness at issue in this case. However, [Virtual Imaging] shall provide the reimbursement amounts for [certain services] for only the year of service, YEAR 2010, for each insurance provider/carrier . . . and the uninsured and to avoid the potential for disclosure of any trade secret or proprietary information, [Virtual Imaging] may simply identify said insurance provider by number and type of carrier, i.e., HMO#1 [reimbursement amount];HMO#2 _____; PPO#1____; PPO#2____; etc.
Virtual Imaging was given thirty days to comply.
Instead, Virtual Imaging filed a petition for writ of certiorari. The company argued that: (1) its reimbursement information from other insurance companies is proprietary; (2) the trial court did not conduct a balancing of United Insurance’s need for the information against Virtual Imaging’s interest in keeping it secret; and (3) the information sought in United Insurance’s interrogatory was not relevant.1II.
“The standard for granting a writ of certiorari for a non-final order is: (1) the order to be reviewed must constitute a departure from the essential requirements of law; (2) the order must cause material injury through subsequent proceedings; and (3) the injury must be irreparable, i.e., one for which there will be no adequate remedy after final judgment.” Sheridan Healthcorp, Inc. v. Total Health Choice, Inc., 770 So. 2d 221, 222 (Fla. 3d DCA 2000) [25 Fla. L. Weekly D2503b]. In Sheridan, a health care provider filed a petition for writ of certiorari arguing that documents it was compelled to provide were protected by Florida’s trade secret privilege. Id. at 221-22 (“Petitioners, Sheridan Healthcorp, Inc. and Sheridan Children’s Healthcare Services, Inc. (collectively ‘Sheridan’) seek a writ of certiorari to quash a trial court order relating to the discovery requests of Total Health Choice, Inc. and PrimeCare International, Inc. . . . Sheridan contends that the trial court’s discovery order improperly impinges on its trade secret privilege.”). The Third District Court of Appeal set out the procedure for evaluating trade secret claims, explaining:
When the trade secret privilege is asserted as the basis for resisting production, the trial court must determine whether the requested production constitutes a trade secret; if so, the court must require the party seeking production to show reasonable necessity for the requested materials. If production is then ordered, the court must set forth its findings. This determination will usually require that the trial court conduct an in camera inspection of the materials in question to determine whether they contain trade secrets.
Id. at 222 (citations omitted). Because “this [procedure] was not done by the trial court” in Sheridan, id., the Third District granted the petition and quashed the trial court’s order. Id. at 221 (“We grant the petition and quash the order of the trial court.”). The Third District ordered the trial court, on remand, “to conduct an in camera inspection of the requested contracts and to make findings of fact in order to determine: (1) whether they constitute ‘trade secrets’; and if so (2) whether the necessity for the production of the contracts outweighs the interest in maintaining their confidentiality.” Id. at 222-23.
In three similar cases, appellate panels of this court have granted petitions for writs of certiorari, and quashed trial court orders, because the trial courts did not follow the procedure for evaluating claims that medical provider reimbursement information was protected by the trade secret privilege. In Virtual Imaging Services (Alvarez) v. United Automobile Insurance Co., 22 Fla. L. Weekly Supp. 184b (Fla. 11th Jud. Cir. 2014), for example, the insurance company requested in discovery “the payment amount [the medical provider] received from insurance companies and uninsured patients.” Id. The court quashed the order compelling this information because “the [trial] court did not make any clear finding as to whether the reimbursement amounts and the insurance companies’ identities constitute trade secrets. . . . [A]n implicit finding does not satisfy the legal criteria for trade secret analysis.” Id. Likewise, in Virtual Imaging Services (Figuerora) v. United Automobile Insurance Co., 22 Fla. L. Weekly Supp. 421a (Fla. 11th Jud. Cir. 2014), the insurance company “submitted an interrogatory for Petitioner to provide information regarding reimbursement rates from other insurance carriers including at least one with whom petitioner had entered into contracts with negotiated rates for the MRI diagnostic services.” Id. The court quashed the trial court’s order to compel because “by failing to conduct an in camera inspection prior to entering into its discovery order, the lower court departed from the essential requirements of law.” Id. And, in Virtual Imaging Services (De La Rosa) v. United Automobile Insurance Co., 22 Fla. L. Weekly Supp. 429a (Fla. 11th Jud. Cir. 2014), the insurance company “requested production of reimbursement rates from other insurers and payors for a particular billing code.” Id. The court granted the petition because the trial court did not “set forth its findings as to whether the requested production constitutes a trade secret, and if so, whether the party seeking production has shown a reasonable necessity for the requested materials.” Id.
Here, too, the procedure was not followed. The trial court did not conduct an in camera inspection of the information requested by United Insurance and it did not make findings of fact on the trade secret privilege. The trial court did not determine whether the reimbursement information requested in the interrogatory constituted a trade secret; the trial court merely assumed it did and then limited the scope of the request and shielded some of the information being produced. Then, having assumed that the reimbursement information was protected by the trade secret privilege, the trial court did not require United Insurance to show the reasonable necessity for the privileged information. The trial court concluded only that the information was relevant under Florida statutes, and not that United Insurance had a reasonable necessity for the information.
Given these deficiencies in the trial court’s order, we, like the Third District in Sheridan, direct the trial court on remand to conduct an in camera inspection of the reimbursement information requested in interrogatory five and to make findings of fact in order to determine: (1) whether it constitutes trade secrets; and if so (2) whether the necessity for the production of the requested information outweighs the interest in maintaining its confidentiality. United Insurance, in its response to the certiorari petition, argues that the reimbursement information sought in the interrogatory is not protected by the trade secret privilege and is necessary for its defense. Those issues, however, need to be decided by the trial court in the first instance, consistent with the procedure outlined in Sheridan.III.
For these reasons, the petition for writ of certiorari is granted, and the trial court’s order is quashed.
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1Virtual Imaging and United Insurance did not request oral argument.
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