STATE FARM
v.
ORTHO
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State Farm sought to quash a trial court order compelling production of a contract with its supplier, Mitchell Medical International, claiming the contract constituted a protected trade secret. The appellate court agreed that the trial court failed to follow the required legal framework for determining whether trade secrets are protected from discovery and remanded for proper proceedings.
The trial court departed from the essential requirements of law by ordering production of the Mitchell Contract without making the required determinations regarding whether it constituted a trade secret, failing to conduct an in camera review, and failing to establish reasonable necessity for production. The order was quashed and the case remanded for proper proceedings.
[1] Trade secrets are privileged and protected from discovery, but this privilege is not absolute.
[2] Trade secrets may be discoverable under certain circumstances.
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Join FLexlaw to unlock all legal intelligence“To determine if such circumstances exist, a trial court generally must (1) determine whether the requested production constitutes a trade secret, (2) if it is a trade secret, determine whether there is a reasonable necessity for production; and (3) if production is ordered, the trial court must set forth its findings.”
Establishes the three-step legal framework that courts must follow when deciding whether to compel production of alleged trade secrets.
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Join FLexlaw to unlock all legal intelligenceState Farm, a mutual automobile insurance company, was ordered by the trial court to produce a contract with Mitchell Medical International, Inc. Stat…
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7171 North Federal Highway Boca Raton, FL 33487 [email protected]
PER CURIAM.
Petitioner State Farm Mutual Automobile Insurance Company seeks to quash a trial court order compelling Petitioner to produce contract with one of its suppliers, Mitchell Medical International, Inc. ("Mitchell Contract"). According to Petitioner, the Mitchell Contract is proprietary and confidential, and production would cause irreparable harm. Petitioner argues that the trial court departed from the essential elements of the law in ordering production of Mitchell Contract. We agree and remand for further proceedings.
Trade secrets are privileged under Section 90.506, Florida Statutes (2013).
This privilege, however, is not absolute, and trade secrets can be obtained via discovery under certain circumstances. To determine if such circumstances exist, a trial court generally must (1) determine whether the requested production constitutes a trade secret, (2) if it is a trade secret, determine whether there is a reasonable necessity for production; and (3) if production is ordered, the trial court must set forth its findings. Sea Coast Fire, Inc. v. Triangle Fire, Inc., No. 3D14-973, 2014 WL 6679018, at *2-3 (Fla. 3d DCA Nov. 26, 2014) (citing Gen. Caulking Coating Co., Inc. v. J.D. Waterproofing, Inc., 958 So. 2d 507, 508 (Fla. 3d DCA 2007)).
Generally, to determine whether the requested information constitutes a trade secret, the trial court must perform an in camera inspection or other document examination. Summitbridge Nat'l Invs. LLC v. 1221 Palm Harbor, LLC, 67 So. 3d 448, 450 (Fla. 2d DCA 2011).
The trial court may also hold an evidentiary hearing, which may include expert testimony. Bright House Networks, LLC v. Cassidy, 129 So. 3d 501, 506 (Fla. 2d DCA 2014); Revello Med. Mgmt., Inc. v. Med-Data Infotech USA, Inc., 50 So. 3d 678, 680 (Fla. 2d DCA 2010). Failure to follow these steps generally constitutes a departure from the essential requirements of the law. Sea Coast Fire, 2014 WL 6679018 at *2-3.
Here, it is unclear whether the trial court made any of the required determinations because it made no relevant findings. Additionally, the trial court failed to undertake an in camera review of the materials, which is generally required. Accordingly, the trial court, in ordering production of the Mitchell Contract, departed from the essential requirements of the law by failing to conduct the necessary inquiry and determine whether the information requested constituted a trade secret meriting limitations on discovery. As such, the Petition for Writ of Certiorari is GRANTED, the order compelling production is QUASHED, and the case is remanded for further proceedings consistent with the foregoing.
J. KEYSER, COX, and BURTON, JJ., concur.
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Authorities Cited
- Summitbridge Nat'l Invs. LLC v. 1221 Palm Harbor, L.L.C., 67 So. 3d 448 (Fla. 2d DCA 2011)
- Bright House Networks, LLC v. Cassidy, 129 So. 3d 501 (Fla. 2d DCA 2014)
- Gen. Caulking Coating Co., Inc. v. J.D. Waterproofing, Inc., 958 So. 2d 507 (Fla. 3d DCA 2007)
- Revello Med. Mgmt., Inc. v. Med-Data Infotech USA, Inc., 50 So. 3d 678 (Fla. 2d DCA 2010)