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Florida Second DCA rejects motor vehicle negligence defendant’s attempt to discover trade secrets from third party medical provider

On February 5, 2021, in Gulfcoast Spine institute, LLC, et al, v. Walker, et al, No. 2D19-4220, the Florida Second DCA granted a certiorari petition from a non-party medical provider in a motor vehicle negligence case to quash a discovery order which required them to produce trade secrets to the defendant. The plaintiff in the case had made payments to the medical provider pursuant to a written agreement making her responsible for any medical charges not covered by insurance. Among other things, the defendant sought discovery of any documentation reflecting the medical provider’s methodology for determining its pricing; its methodology for using CPT codes; contracts it had reached with private insurers; its realization rates from different categories of patients; and its overhead costs for medical equipment, personnel, procedures, and facilities. Although some of the requests were limited to the plaintiff, many were not. For example, in addition to requesting all the plaintiff’s documentation, the defendant also sought documentation for all other patients who receivedthe same procedures during any time from the prior three years. The Second DCA noted that it has in previous cases employed a three-step if a discovery request seeks production of protected trade secrets. First, the court must determine whether the requested information in fact includes trade secrets. Second, if the request seeks trade secrets, then the court must next determine whether the party seeking production can show reasonable necessity for the requestedinformation.This fact-specific analysis generally requires a trial court to decide whether the need for producing the documents outweighs the interest in maintaining their confidentiality. Third, if the need for production outweighs the interest in confidentiality under this balancing test, then the court must determine what safeguards should be put in place to protect the information, such as a confidentiality order or other measure. See Lewis Tree Serv., Inc. v. Asplundh Tree Expert, LLC, 45 Fla. L. Weekly D2228, D2229 (Fla. 2d DCA Sept. 25, 2020); Ameritrust Ins. Corp. v. O'Donnell Landscapes, Inc., 899 So. 2d 1205, 1207 (Fla. 2d DCA 2005)). The Second DCA additionally noted that Florida law places an even higher burden for the compelled disclosure of financial records from a non-party than that the standard used for production from a party. Quoting from Rousso v. Hannon, 146 So. 3d 66, 69-70 (Fla. 3d DCA 2014), the Court observed that because "third party financial records . . . are of the utmost sensitivity," they "are not discoverable unless the party seeking discovery establishes a need for the discovery sufficient to overcome the privacy rights of the third party." The Second DCA concluded that the defendant had failed to satisfy the second prong of reasonable necessity, instead claiming an automatic entitlement to the information. As a result, the trial court had never engaged in the requisite balancing test. Of potential relevance to future cases, the Second DCA distinguished the facts of this case from the situation where a Letter of Protection is used, rejecting the defendant’s argument that the information was needed because the medical provider might never seek payment under the agreement.