25 Fla. L. Weekly Supp. 413a
Online Reference: FLWSUPP 2505GAINInsurance — Personal injury protection — Discovery — Trade secret — Documents relied upon by insurer in rendering opinion on issue of reasonableness — Trial court departed from essential requirements of law when it ordered insurer to produce documents that were claimed to be privileged without first conducting examination of documents or in camera inspection and without setting forth findings regarding trade secret status of information requested — Court notes that insurer’s request for confidentiality order as form of relief to guard against widespread dissemination of trade secret material is supported by caselaw
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Petitioner, v. GABLES INSURANCE RECOVERY a/a/o Tay Gainza, Respondent. Circuit Court, 11th Judicial Circuit (Appellate), in and for Miami-Dade County. Case No. 14-472 AP. L.T. Case No. 11-8083 SP 26 (03). December 8, 2016. On Appeal from the County Court for Miami-Dade County, Michaelle Gonzalez-Paulson, Judge. Counsel: Diane H. Tutt, for Petitioner. Robert N. Pellier, for Respondent.
(Before, SHAPIRO, DENNIS, and HANZMAN, JJ.)
(DENNIS, Judge.) This is a petition for writ of certiorari filed by State Farm Mutual Insurance Co. (Petitioner), to review a non-final order requiring production of documents that were relied upon by its expert. The documents that were requested by Gables Insurance Recovery (Respondent) were relied upon by the Petitioner’s expert, Mr. Darrell Spell, in rendering his opinion on the issue of reasonableness in this suit for Personal Injury Protection (PIP) benefits. The Petitioner argues that the information ordered for production is confidential and proprietary and should be protected as trade secrets. In addition, the Petitioner further argues that the trial court departed from the essential requirements of the law because it failed to conduct an in-camera inspection or evidentiary hearing; make findings of facts to determine whether the documents requested contained trade secrets; and enter an order requiring the parties to abide by a confidentiality agreement once the production order is entered.
A certiorari petition must first pass a three-prong test before an appellate court can grant relief from an erroneous interlocutory order. Barker v. Barker, 909 So. 2d 333, 336 (Fla. 2d DCA 2005) [30 Fla. L. Weekly D1655a]. A Petitioner must establish (1) a departure from the essential requirements of the law, (2) resulting in material injury for the remainder of trial, (3) that cannot be corrected on post judgment appeal. Id. We find that the instant Petition satisfies the requirements of this test.
Pertinent to this case is whether the trial court complied with the essential requirements of the law when it ordered State Farm to produce the subject documents that were claimed to be privileged information — trade secrets. When a litigant asserts the trade secret privilege “as the basis for resisting production, the trial court must determine whether the requested production constitutes a trade secret.” Sheridan Healthcorp, Inc. v. Total Health Choice, Inc., 770 So. 2d 221, 222 (Fla. 3d DCA 2000) [25 Fla. L. Weekly D2503b]. If the requested information constitutes a trade secret, “the court must require the party seeking production to show reasonable necessity for the requested materials.” Id. If the trial court orders production, the court “must set forth its findings.” Id.
Trade secrets are privileged under section 90.506 of the Florida Statutes, but the privilege is not absolute. Freedom Newspapers, Inc. v. Egly, 507 So. 2d 1180, 1184 (Fla. 2d DCA 1987). Information constituting trade secrets can be obtained in discovery under certain circumstances. Id. Trade secrets are defined in Florida’s Uniform Trade Secrets Act as:
[I]nformation, including a formula, pattern, compilation, program, device, method, technique, or process that:
(a) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and
(b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
§ 688.002(4), Fla. Stat. (2013)
To determine if circumstances exist under which information constituting a trade secret can be obtained from a trade secret holder during discovery, a trial court must follow a three-step process: (1) determine whether the information requested for production constitutes a trade secret, (2) if the requested information constitutes a trade secret, determine whether there is a reasonable necessity for its production, and (3) if production is ordered, set forth specific findings in the order as to the trade secret status of the information and the need for production. Sea Coast Fire Inc., v. Triangle Fire, Inc., 170 So. 3d 804, 807-09 (Fla. 3d DCA 2014) [39 Fla. L. Weekly D2480a].
To determine whether the requested information constitutes a trade secret, the trial court may perform an in camera inspection or other document examination. Id. The lower court may also conduct an evidentiary hearing. Id. In a case where it is undisputed that the information requested is a trade secret, an inspection or hearing may not be required. Id. Case law supports the contention that the trial court must conduct an in camera inspection prior to ruling on a privilege claim. Zanardi v. Zanardi, 647 So. 2d 298 (Fla. 3d DCA 1994); Paskoski v. Johnson, 626 So. 2d 338, 339 (Fla. 4th DCA 1993) (holding that the party asserting privilege maintains the burden to demonstrate the applicability of the privilege, but the party is also entitled to have the court conduct an in camera inspection). Allstate Ins. Co. v. Walker, 583 So. 2d 356, 358 (Fla. 4th DCA 1991). (“When the work product and attorney client privileges are asserted, the court must hold an in camera inspection of the discovery material at issue in order to rule on the applicability of the privileges.”). It was held that it is a departure from the essential requirements of law when a trial court orders the production of documents without first conducting an examination of the documents or an in camera review. Messer v. E.G. Pump Controls, Inc., 667 So. 2d 321, 322 (Fla. 1st DCA 1995) [39 Fla. L. Weekly D2480a]. In the instant case, the trial court failed to conduct an in camera inspection, evidentiary hearing, or document review.
Furthermore, the trial court did not set forth findings as to the determination of whether the requested production consisted of trade secrets. Failure to do so in this instance is a reason to quash the underlying order. The instant trial court order does not provide specific findings regarding whether the information sought pursuant to the discovery request is a trade secret. Cooper Tire & Rubber Co. v. Cabrera, 112 So. 3d 731, 733 (Fla. 3d DCA 2013) [38 Fla. L. Weekly D1012a] (granting certiorari relief where the trial court “failed to make any findings as to whether any or all of the documents in question were protected by the trade secret privilege”): Gen. Hotel & Res. Supply Corp. v. Skipper, 514 So. 2d 1158, 1159 (Fla. 2d DCA 1987) (concluding that the order departed from the essential requirements of law because it “ma[de] no determination as to whether or not the documents are trade secrets”). Because the trial court neglected to provide specific findings in its order regarding the trade secret status of the information requested, this Appellate Court must grant the Petition for Writ of Certiorari and quash the discovery order issued below.
It should also be noted that the Petitioner’s request for a confidentiality order as a form of relief to guard against the widespread dissemination of trade secret material is supported by Columbia Hosp. (Palm Beaches) v. Hasson, 33 So. 3d 148 (Fla. 4th DCA 2010) [35 Fla. L. Weekly D1067a]. In Columbia Hosp., the Fourth District Court of Appeal determined that the trial court properly ruled that the party requesting the production of trade secrets materials made a sufficient showing of need to overcome the privilege. Id. However, the district court also held that the trial court erred when it denied the motion for a protective order which was necessary to protect the trade secrets from further dissemination. Id. Similarly, in the instant case, Respondent has shown a need for the materials in light of the fact that Mr. Spell, the Petitioner’s expert, relies on them in forming his opinion. This does not preclude, however, the need for a protective order or order requiring the parties to negotiate a confidentiality agreement prior to production. The fact that the party’s expert witness relies on materials or data in formulating his opinion should not make those materials fair game for dissemination to parties outside of the subject litigation.
The necessity of a trial court to make a determination regarding whether the information sought pursuant to a discovery request is a trade secret is essential. Gulfcoast Surgery Center, NC v. Fisher, 107 So. 3d 493 (Fla. 2d DCA 2013) [38 Fla. L. Weekly D341a] (trial court was required to determine if materials were trade secret and to determine what safeguards were necessary to protect dissemination). Section 90.506 of the Florida Statutes requires this protection. Id.
For these reasons, the Petition for a Writ of Certiorari is GRANTED. Accordingly, we QUASH the October 30, 2014 Order Requiring Production of Documents. (SHAPIRO and HANZMAN, JJ., concur.)
