Full Opinion

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED IN THE DISTRICT COURT OF APPEAL OF FLORIDA SECOND DISTRICT GULFCOAST SPINE INSTITUTE, LLC, ) BIOSPINE INSTITUTE, LLC, and ) AVION ANESTHESIA, ) ) Petitioners, ) ) v. ) Case No. 2D19-4220 ) SONJA WALKER, EDDIE WALKER, ) ROBERT MARTINEZ, M.D., P.A.; and ) ROBERT CHRISTOPHER MARTINEZ, ) ) Respondents. ) ___________________________________) Opinion filed February 5, 2021. Petition for Writ of Certiorari to the Circuit Court for Hillsborough County; Cheryl K. Thomas, Judge. Stuart C. Markman, Jared M. Krukar (withdrew after briefing), Kristin A. Norse, and Robert W. Ritsch of Kynes, Markman & Felman, P.A., Tampa, for Petitioners. Aaron W. Proulx of Smoak, Chistolini & Barnett, PLLC, Tampa, for Respondents Robert Martinez, M.D., P.A.; and Robert Christopher Martinez. No appearance for remaining Respondents. KHOUZAM, Chief Judge. Petitioners Gulf Coast Spine Institute, LLC; BioSpine Institute, LLC; and Avion Anesthesia (collectively "BioSpine") seek a writ of certiorari quashing a discovery order requiring them, as nonparties below, to produce trade secrets to Respondents Robert Martinez and Robert Martinez, M.D, P.A. (collectively "Martinez"), defendants below. We grant the petition and quash the order. BACKGROUND This is a personal injury case based on a car accident in which Robert Martinez negligently collided his vehicle with Sonja Walker's. But this certiorari proceeding concerns only Martinez's attempts to obtain trade secrets and proprietary information from Mrs. Walker's nonparty medical providers. After the accident, Mrs. Walker sought and received medical treatment from BioSpine, among other providers. Mrs. Walker signed BioSpine's "Financial Policy & Acknowledgment of Notice of Privacy Practices" agreement. Under that agreement, the cost of Mrs. Walker's medical care was her "responsibility whether [her] insurance company pays or not." Consequently, although BioSpine agreed to try to bill Mrs. Walker's insurer for her medical care, she was expressly obligated to pay BioSpine "any . . . balance not paid for by [her] insurance or third party payer." As agreed, BioSpine later billed Mrs. Walker's insurer, Blue Cross Blue Shield (BCBS), for the treatment. BCBS paid BioSpine for some of Mrs. Walker's treatment, but not all of it. Mrs. Walker and her husband sued Martinez alleging negligence, vicarious liability, and loss of consortium. Martinez admitted liability but contested the amount of damages. -2- Thereafter, Martinez sought extensive discovery from parties and nonparties alike. To the plaintiffs, Martinez made over a dozen formal discovery requests, including specific requests regarding Mrs. Walker's medical treatment and treating professionals. Martinez also requested a compulsory medical examination. From BioSpine, Martinez demanded the production of documents and the deposition of a corporate representative regarding forty separate categories of information. Relevant here is the subset of Martinez's requests for BioSpine's billing and financial information. Among other things, Martinez sought any and all documentation reflecting BioSpine's methodology for determining its pricing; its methodology for using CPT codes;1 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 Mrs. Walker, many were not. For example, in addition to requesting all of her documentation, Martinez also sought documentation for all other patients who received the same procedures from BioSpine during any time from the prior three years. BioSpine moved for a protective order, specifically objecting to the requests for its contracts with health insurers; its development of charging schedules; and its financial, billing, and other confidential and proprietary business information beyond that relating specifically to Mrs. Walker. BioSpine asserted that the requests sought trade secrets and confidential proprietary information of a nonparty without satisfying the requirement under Florida law of establishing reasonable necessity. 1"CPT" refers to "Current Procedural Terminology," a universal medical procedure and billing coding system designed to streamline and homogenize medical billing and identification. -3- While its motion for protective order was pending, BioSpine produced a corporate representative for deposition, as well as various records relating to Mrs. Walker's treatment. At the deposition, the representative testified that all of BioSpine's patients signed the same financial agreement that Mrs. Walker did, which sets forth BioSpine's "one fee schedule." BioSpine did not use letters of protection for its patients and had not done so for years. The representative explained limited aspects of how BioSpine determines its fee schedules and pricing but maintained its objections regarding certain overhead costs and payment issues. Martinez thereafter moved to compel a second deposition, expressly seeking further testimony and documents. At the hearings on the competing motions to compel and for protective order, Martinez conceded that the Defendants were not seeking discovery on litigation bias or relationship bias issues. Instead, Martinez asserted that all of the discovery at issue was solely for the purpose of contesting the reasonableness of Mrs. Walker's medical bills. According to Martinez, the fact that the reasonableness of the costs of Mrs. Walker's treatment was in dispute entitled them to considerable financial discovery from nonparty BioSpine. In addition to traditional discovery specifically concerning Mrs. Walker and her treatment, Martinez asserted BioSpine was also required to disclose its overhead costs for the treatments, internal cost structure, realization rates from other patients, and methodology for setting charges for each CPT code. Martinez expressly premised this argument on repeated characterizations of BioSpine's financial agreement as a "letter of protection,"2 conceding that if "there 2Throughout its papers below, Martinez declined to refer to BioSpine by name, instead calling the entities Mrs. Walker's "LOP Provider." In court, Martinez's -4- was no Letter of Protection . . . we would not be here." According to Martinez, a letter of protection was at play because BioSpine would not be reimbursed for Mrs. Walker's treatment unless she prevailed in litigation. Martinez made this assertion despite (1) the contrary text of the agreement itself, which BioSpine had produced, and (2) BioSpine's uncontroverted testimony that Mrs. Walker was responsible for the cost of her care and that BioSpine had not used letters of protection for years. Martinez also acknowledged that the discovery sought included trade secrets and proprietary information. Nonetheless, Martinez's counsel represented that this court's decisions in Giacalone v. Hellen Ellis Memorial Hospital Foundation, Inc., 8 So. 3d 1232 (Fla. 2d DCA 2009), and Gulfcoast Surgery Center, Inc. v. Fisher, 107 So. 3d 493 (Fla. 2d DCA 2013), "entitled" Martinez to discover BioSpine's trade secrets. Ultimately, the court directed BioSpine to produce a redacted version of its contract with BCBS subject to a confidentiality agreement to be determined subsequently.3 Further, the court granted Martinez's motion to compel discovery as to BioSpine's overhead costs for the procedures Mrs. Walker underwent, its realization rates from patients in litigation versus patients not in litigation, and its methodology for setting charges for each CPT code involved in Mrs. Walker's treatment. Unlike its ruling on the contract, the trial court did not require any confidentiality agreement or other protection for this additional discovery, despite Martinez's admission that it included trade secrets. The court also did not address why counsel referred to BioSpine's standard financial agreement as "the Letter of Protection, or whatever their new agreement is called." 3This ruling is not challenged in this proceeding, and we make no comment on its propriety. -5- discovery of BioSpine's proprietary information was reasonably necessary in order for Martinez to challenge the cost of treatment in this personal injury case. ANALYSIS A petition for writ of certiorari is properly granted where a discovery order departs from the essential requirements of law causing material injury that cannot be remedied on postjudgment appeal. See, e.g., Lewis Tree Serv., Inc. v. Asplundh Tree Expert, LLC, 45 Fla. L. Weekly D2228, D2229 (Fla. 2d DCA Sept. 25, 2020). And "[c]ertiorari is particularly appropriate for 'cat out of the bag' discovery orders that would require the disclosure of information that is privileged or otherwise protected from disclosure." Id. A three-step analysis applies to a claim that a discovery request seeks production of protected trade secrets. Id. at D2229-30 (citing § 90.506, Fla. Stat. (2019)). First, the court must determine whether the requested information in fact includes trade secrets. Id. at D2230 (citing Ameritrust Ins. Corp. v. O'Donnell Landscapes, Inc., 899 So. 2d 1205, 1207 (Fla. 2d DCA 2005)). Although this step usually requires the court to conduct an in camera review of the requested material, such review generally is obviated where there is no dispute that the requests seek trade secret information. Id. (first citing Summitbridge Nat'l Invs. LLC v. 1221 Palm Harbor, LLC, 67 So. 3d 448, 449 (Fla. 2d DCA 2011), then citing Sea Coast Fire, Inc. v. Triangle Fire, Inc., 170 So. 3d 804, 808 (Fla. 3d DCA 2014)). If the request seeks trade secrets, then the court must next determine "whether the party seeking production can show reasonable necessity for the requested information." Id. (quoting Ameritrust, 899 So. 2d at 1207). This fact-specific analysis -6- "generally 'requires a trial court to decide whether the need for producing the documents outweighs the interest in maintaining their confidentiality.' " Id. (quoting Sea Coast Fire, 170 So. 3d at 809). Any ordered disclosure must be supported by findings. Keller v. Healthcare-IQ, Inc., 230 So. 3d 955, 959-60 (Fla. 2d DCA 2017) (citing Bright House Networks, LLC v. Cassidy, 129 So. 3d 501, 506 (Fla. 2d DCA 2014)). Finally, 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. Lewis Tree, 45 Fla. L. Weekly at D2230 (citing § 90.506). Unsurprisingly, this test sets a high burden for a requesting party to force an objecting party to disclose its trade secrets. But Florida law recognizes that the burden is even higher where the protected information is sought from a nonparty. In particular, 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." Rousso v. Hannon, 146 So. 3d 66, 69-70 (Fla. 3d DCA 2014) (explaining that this "heightened standard" is necessary to avoid irreparable harm); see also Westco, Inc. v. Scott Lewis' Gardening & Trimming, Inc., 26 So. 3d 620, 622 (Fla. 4th DCA 2009) ("When confidential information is sought from a non-party, the trial court must determine whether the requesting party establishes a need for the information that outweighs the privacy rights of the non-party."); Winn-Dixie Stores, Inc. v. Miles, 616 So. 2d 1108, 1111 (Fla. 5th DCA 1993) (giving "substantial weight" to treating physician's confidentiality concerns in discovery balancing test where physician "did not choose to -7- participate in this litigation but merely agreed to treat a patient who sought out his services"). Here, there is no dispute that Martinez is seeking BioSpine's trade secrets and proprietary information. Thus, Martinez correctly concedes that the first prong of the test is satisfied despite the trial court's failure to conduct an in camera inspection. But Martinez has fundamentally failed to establish the second prong. Instead of attempting to show a reasonable necessity for the requested information, Martinez asserts that (1) BioSpine treated Mrs. Walker under a letter of protection and thus might never require payment for the treatment and (2) the mere fact that Martinez challenges the reasonableness of the cost of the treatment warrants invasive discovery into nonparty BioSpine's trade secrets under this court's decisions in Giacalone and Gulfcoast. We reject both points. As a threshold matter, despite Martinez's repeated characterizations, no evidence has been presented to establish that BioSpine treated Mrs. Walker under a letter of protection. Instead, the uncontroverted evidence indicates just the opposite: BioSpine's financial agreement shows on its face that Mrs. Walker is ultimately responsible for the cost of her medical treatment, and BioSpine's corporate representative testified that it had not used letters of protection for years. The only support for Martinez's foundational contention that BioSpine treated Mrs. Walker under a letter of protection is Martinez's counsel's repeated assertions, which are insufficient as a matter of law. See, e.g., Sea Coast Fire, 170 So. 3d at 809 (explaining that in conducting balancing test to determine reasonable necessity, "a trial court generally cannot rely on arguments of counsel alone"). Thus, -8- Martinez failed to establish the express premise of their position. See id. ("Once a party has demonstrated that the information sought is a trade secret, the burden shifts to the party seeking discovery to demonstrate reasonable necessity for production."). More important, however, is that Martinez's reliance on our decisions in Giacalone and Gulfcoast is misplaced. Like this case, Giacalone involved a discovery dispute regarding the reasonableness of costs of medical care. But unlike this case, it was a discovery dispute between parties—not any nonparty—and involved a materially different claim. There, the hospital sued its own patient for unpaid medical bills after treating him under an agreement that he would pay "the regular rates and terms of the hospital." 8 So. 3d at 1234. The patient was uninsured and had requested to be treated under the hospital's charity program, but the hospital did not notify the patient that he was ineligible for the program until after he had been treated and released. Id. In quashing an order precluding the patient from discovering information to support his defense of unreasonable pricing, we emphasized "that the Hospital first placed the reasonableness of its charges at issue by alleging in its complaint that '[t]he reasonable value of [its] unpaid services' " came to a specific dollar amount. Id. at 1235 (alterations in original). Further, we expressly declined to address the issue of trade secrets, as the trial court had not yet done so. Id. at 1236. Instead, we directed the trial to consider the trade secrets issue in the first instance on remand. Id. Thus, Giacalone—where the plaintiff medical provider sued its own patient for unpaid medical bills and the trial court failed to address the issue of trade secrets— does not resolve this personal injury discovery dispute in which the trial court has ordered a nonparty medical provider to disclose undisputed trade secrets. -9- By contrast, our opinion in Gulfcoast is more structurally aligned with this case than Giacalone because Gulfcoast considered a nonparty medical provider's objection to unreasonable pricing discovery in a car crash case. But our analysis and holding in Gulfcoast actually support BioSpine's position in this case, not Martinez's. In particular, in Gulfcoast this court quashed an order compelling production of trade secrets on the basis that the record established only that "the requested documents which relate to Gulfcoast's internal cost structure are relevant." 107 So. 3d at 495 (emphasis added). Here, BioSpine likewise concedes that the requested discovery meets the low bar for relevance; the problem is that it is also protected. On that point, Gulfcoast is clear that a trial court departs from the essential requirements of the law by ordering disclosure of trade secrets without conducting the required balancing test or requiring protective measures. Id. at 495-96. That is why this court quashed the order directing production in Gulfcoast, and why we do so here. In this court just as below, Martinez has declined to provide any basis to conclude that disclosure of BioSpine's trade secrets is reasonably necessary. Indeed, despite being asked multiple times at oral argument why Defendants could not use other common methods for challenging the reasonableness of nonparty medical charges in a personal injury lawsuit—such as putting on their own expert or community pricing evidence—Martinez's counsel simply could not offer any explanation. Instead, he merely repeated the assertion that defendants disputing the cost of care are automatically "entitled" to this discovery under Giacalone and Gulfcoast. But neither case authorizes sidestepping the fact-specific inquiries unequivocally required under Florida law in order to protect trade secrets, and we decline to do so here. - 10 - The trial court departed from the essential requirements of law by ordering production of trade secrets without conducting a balancing test, making findings, or implementing protective measures as required by Florida law. Petition granted; order quashed. SLEET and LABRIT, JJ., Concur. - 11 -