Court Opinion

ID: 4378618
Source: CourtListenerOpinion
Date Created: 2019-03-20 14:02:41.56387+00
Date Added: 2024-06-11T14:49:16.387486
License: Public Domain

FIRST DISTRICT COURT OF APPEAL
                 STATE OF FLORIDA
                   _____________________________

                           No. 1D16-5700
                   _____________________________

MANAGED CARE OF NORTH
AMERICA, INC.,

    Appellant,

    v.

FLORIDA HEALTHY KIDS
CORPORATION and DELTA
DENTAL INSURANCE COMPANY,

    Appellees.
                   _____________________________

On appeal from the Circuit Court for Leon County.
Karen Gievers, Judge.

                          March 20, 2019

M. K. THOMAS, J.

     Managed Care of North America, Inc. (“MCNA”), seeks review
of an order compelling disclosure of alleged trade secrets to a
business rival. Because the trial court erred, as a matter of law, in
application of section 812.081(1)(c), Florida Statutes, and portions
of the order are not supported by competent, substantial evidence,
we affirm in part, and reverse in part, for the reasons set forth
below.
              I. Factual and Procedural History

     In late 2015, Florida Healthy Kids Corporation (“FHKC”), a
non-profit corporation established by the State of Florida to
facilitate children’s dental care, began soliciting proposals from
administrators of dental programs by issuing an Invitation to
Negotiate (“ITN”). MCNA manages dental benefits for Medicaid
participants and the Children’s Health Insurance Program in
Florida, among other states. MCNA and Delta Dental Insurance
Company (“Delta”), a competitor, along with two other dental
program administrators, submitted proposals for consideration.

     MCNA compiled a proposal packet for FHKC which
encompassed, among other documents, provider information in
two forms: excel spreadsheets and geoaccess maps. In an effort to
maintain the secrecy of the provider information, MCNA
designated both as protected trade secrets, marking each page as
confidential in accordance with section 624.4213, Florida Statutes,
and as instructed by the ITN. 1

     After considering all proposals, FHKC awarded contracts to
three of four bidders. Delta’s proposal was the only bid not chosen.
In response, Delta served a public records request on FHKC to
“inspect, examine, and copy all of the documents related to
MCNA’s response to Florida Healthy Kids Dental ITN 2015,
including documents that MCNA claimed as ‘trade secret’ or
identified as ‘confidential.’”

    The matter then took a procedural detour from a traditional
public records dispute. Delta did not initiate the litigation under
chapter 119, Florida Statutes, to compel production of the
documents. Upon receiving notice of the public records request to
FHKC, MCNA immediately filed a Verified Complaint requesting
a declaratory judgment as to whether the records at issue were

    1MCNA designated other materials as protected trade secrets
as well. However, Delta eventually withdrew its challenge
regarding all materials with the exception of the excel spreadsheet
and geoaccess maps encompassed within proposal packet “Volume
II.”

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exempt from disclosure as “trade secrets.” Delta responded by
filing an opposed motion to intervene as “an interested party on
the side of Defendant, Florida Healthy Kids Corporation,” which
the trial court ultimately granted. After an evidentiary hearing,
the trial court issued an omnibus order finding the subject
documents were not protected trade secrets, requiring full
disclosure and awarding attorney’s fees and costs to Delta as the
“prevailing party,” but retaining jurisdiction as to amount. MCNA
filed this appeal.

                           II. Analysis

     Section 119.01(1), Florida Statutes, which establishes
Florida’s broad public records policy, provides “that all state,
county, and municipal records are open for personal inspection and
copying by any person.” See also Art. I, § 24(a), Fla. Const.
However, the right to inspect or copy public records is not without
limitation; the Florida Constitution permits the Legislature to
exempt certain public records from disclosure as long as any such
laws “state with specificity the public necessity justifying the
exemption” and “are no broader than necessary to accomplish the
stated purpose of the law.” Art. I, § 24(c), Fla. Const.

     At issue here is the legislatively created exemption to the
public records law under section 815.045, Florida Statutes, which
protects trade secrets from disclosure. Section 815.045, establishes
that it is a public necessity that trade secrets “as defined in s.
812.081 . . . be expressly made confidential and exempt from public
records law. . .” Section 812.081(1)(c), Florida Statutes, defines
“trade secret” as:

    [T]he whole or any portion or phase of any formula,
    pattern, device, combination of devices, or compilation of
    information which is for use, or is used, in the operation
    of a business and which provides the business an
    advantage, or an opportunity to obtain an advantage,
    over those who do not know or use it. The term includes
    any scientific, technical, or commercial information,
    including financial information, and includes any design,
    process, procedure, list of suppliers, list of customers,
    business code, or improvement thereof. Irrespective of

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    novelty, invention, patentability, the state of the prior
    art, and the level of skill in the business, art, or field to
    which the subject matter pertains, a trade secret is
    considered to be:

    1. Secret;
    2. Of value;
    3. For use or in use by the business; and
    4. Of advantage to the business, or providing an
    opportunity to obtain an advantage, over those who do
    not know or use it

    when the owner thereof takes measures to prevent it from
    becoming available to persons other than those selected by
    the owner to have access thereto for limited purposes.

§ 812.081(1)(c), Fla. Stat. (emphasis added).

      Here, our limited role is to strictly construe section
812.081(1)(c), including its definition of “trade secret,” and to
determine if competent, substantial evidence exists to support the
factual findings of the trial court. 2 The trial court’s interpretation
of a statute and its application of law to facts are subject to de novo
review. See Coventry First, LLC v. State, Office of Ins. Regulation,
30 So. 3d 552, 556 (Fla. 1st DCA 2010); Reinish v. Clark, 765 So.
2d 197, 203 (Fla. 1st DCA 2000). “We apply the competent,
substantial evidence standard of review to a trial court’s factual
determination that documents do or do not contain trade secrets.”
Surterra Fla., LLC v. Fla. Dep’t of Health, 223 So. 3d 376, 379 (Fla.
1st DCA 2017) (citing Sepro Corp. v. Fla. Dep’t of Envtl. Prot., 839
So. 2d 781, 785 (Fla. 1st DCA 2003)).

    2 Florida law establishes multiple trade secret exemptions
which arguably set forth different criteria. MCNA has restricted
its arguments to the definition of trade secret in section
812.081(1)(c), Florida Statutes. Delta also stipulates to its
exclusive applicability.

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                       A. Excel Spreadsheets

      The excel spreadsheets created by MCNA present provider
information separated into the following categories: 1) those
providers affiliated with MCNA and treating FHKC patients; 2)
providers affiliated with MCNA but who were not yet treating
FHKC patients; and 3) “prospective providers” who had yet to
contract with MCNA. As to the first two categories, the trial court
determined the excel spreadsheets did not constitute trade-secrets
because the providers were either known to the public through the
MCNA website or were readily accessible to the public by phone
request to MCNA. We decline to disturb the trial court’s factual
findings as to these categories, as competent, substantial evidence
supports the determination that the information was readily
accessible to the public, and no efforts were taken to protect this
information. As to the third category, “prospective providers” not
affiliated with MCNA, we find the trial court erred, as a matter of
law, in denying the exemption from disclosure.

     The trial court improperly interpreted the enumerated
portion of section 812.081(1)(c), as setting forth the criteria,
inclusive of proof of “value,” to prove entitlement to a trade secret
exemption. Instead, the enumerated portion of the statutory
subsection establishes a presumption of what a trade secret is
“considered to be” once the required elements of a trade secret are
established, as set forth in the first sentence of the statutory
subsection. The first sentence in section 812.081(1)(c) defines
“trade secret” as: (1) a “compilation of information”; (2) “for use or
is used in the operation of a business”; (3) “which provides the
business an advantage or an opportunity to obtain an advantage,
over those who do not know or use it”; and (4) the owner of the
information “takes measures to prevent it from becoming available
to persons other than those selected.” § 812.081(1)(c), Fla. Stat.;
see also Sepro Corp., 839 So. 2d at 783-84.

     Once MCNA met its burden of proving that the spreadsheets
were used in the operation of its business, that the information
provided an advantage or the opportunity for an advantage, and
that MCNA had taken measures to prevent its disclosure, the
information is deemed protected trade secrets; and, by its very
nature, the trade secrets are considered, as a matter of law, to be

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“of value.” § 812.081(1)(c), Fla. Stat. Thus, the trial court erred in
requiring MCNA to prove “value” as a separate and statutorily
required element.

     Delta defends the trial court’s interpretation of section
812.081(1)(c) as requiring the party seeking protection from
disclosure to prove “of value” as otherwise, all materials would be
exempt if simply branded as “secret.” Unquestionably, a reading of
section 812.081(1)(c) as automatically entitling a party to a trade
secret exemption by merely labelling information as confidential,
has been previously condemned, and we do not retreat from sound
precedent. James, Hoyer, Newcomer, Smiljanich, & Yanchunis,
P.A. v. Rodale Inc., 41 So. 3d 386, 387 (Fla. 1st DCA 2010) (a party
may not render public records exempt from disclosure merely by
designating information it furnishes a governmental agency as
confidential); See also Sepro Corp., 839 So. 2d at 784 (citing Shevin
v. Byron, Harless, Schaffer, Reid and Assocs., Inc., 379 So. 2d 633,
635 (Fla. 1980)). For entitlement to the exemption under
812.081(1)(c), the requesting party must not only label the
information as secretive, but must also prove a business advantage
or an opportunity to obtain an advantage. 3

     Here, uncontroverted testimony showed the life-blood of
MCNA’s business is winning competitive solicitations in Florida
and other states for contracts to manage dental benefits. The
documents Delta seeks from FHKC are MCNA’s compilation of
information about dental services available and potentially
available through MCNA’s network of providers. MCNA’s
witnesses confirmed this compilation of information was created
solely for FHKC’s consideration in the competitive ITN process.
This unique listing of provider information was generated with
MCNA proprietary software and gives MCNA a competitive
business advantage in winning solicitations. In fact, over fifty
percent of the available points for the bid proposal scoring were
tied to the available provider network, establishing that FHKC

    3 Proof of business advantage may be argued as synonymous
with evidence “of value.” However, this issue is not before us as the
parties stipulated the only exemption applicable is section
812.081(1)(c), Florida Statutes.

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prefers to award contracts to a company that has not only built an
impressive provider network, but is also actively working to
expand and grow its provider network by targeting new
prospective providers. Thus, the non-public information is
important to winning the contract; and, failing to protect the
confidentiality of this information would reveal MCNA’s regional
marketing and contracting strategies to its competitors, thereby,
destroying the business advantage this information gives MCNA.

     The trial court’s erroneous statutory elements test inexorably
led to its improper consideration of the evidence presented. The
trial court fundamentally misapplied section 812.081(1)(c) to
require MCNA, as part of its burden of proof, to prove the
information was “of value.” In doing so, the trial court diverged
from the plain language of the statute at issue, conflated separate
and distinct public record exemptions, and perused Webster’s
dictionary for a definition of “value.” The trial court concluded the
materials were not protected, in part, because MCNA not only
failed to prove the materials were “of value” but of “independent
economic value,” a definition of “trade secret” improperly extracted
from section 688.002(4), Florida Statutes. 4

     Having satisfied the burden of putting forth evidence
establishing MCNA compiled the information and that the
compilation gave a business advantage, the prospective provider
information is, as a matter of law and by its very nature,
considered “of value.” Rodale, 41 So. 3d at 388. Applying the
definition of “trade secret” under section 812.081(1)(c), this Court
finds the evidence establishes MCNA’s entitlement to the
exemption and those portions of the excel spreadsheets containing
prospective providers are exempt from disclosure.

    4 The trial court considered the exemption under section
688.002(4), Florida Statutes, and its definition of “trade secret,”
although never raised by the parties. The inapplicability of section
688.002(4) to this case distinguishes it from Office of Insurance
Regulation v. State Farm Ins. Co., 213 So. 3d 1104 (Fla. 1st DCA
2017) where, by consent of the parties, the “independent economic
value” of the information was a required element of proof.
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                       B. Geoaccess Maps

     MCNA’s geoaccess maps showed FHKC where its members
were concentrated in relation to all of the various provider
categories included on the excel spreadsheets. The maps do not
include “prospective provider” information. The trial court
reasoned that, because the geoaccess maps only indicated those
providers who could be obtained by the public on MCNA’s website
or by phone request, “there is no trade secret provision applicable
to that information.” The trial court erred, as a matter of law, in
determining that information available to the public can never be
considered a protected trade secret. Public information can be
subject to trade secret protection, as the time and effort spent
compiling and the unique presentation thereof, may render the
product a trade secret. See Surterra, 223 So. 3d at 380.

     Further, the trial court ignored the uncontroverted testimony
of MCNA witnesses explaining that the trade secret nature of the
geoaccess maps is independently derived from the unique
composition of the maps themselves, not just the underlying
information utilized to create the maps. More fundamentally, the
trial court wholly ignored the uncontroverted evidence that the
geoaccess maps cannot be recreated using only publicly available
information because these maps are generated using proprietary
software unavailable to MCNA’s competitors. Thus, while some
providers’ actual locations may be searchable online or by calling
MCNA’s offices, the unique formatting and display of that
information, as compiled and presented by MCNA specifically for
FHKC, cannot be replicated without a competitor obtaining
MCNA’s Florida geoaccess maps from FHKC and reverse
engineering its specialized software. MCNA invested significant
time, resources and capital in generating a submittal which would
be attractive to FHKC. This investment included not only the labor
intensive market research necessary to assemble a proffered
provider network that would stand out compared to MCNA’s
competitors, but also the forethought to create a visually appealing
compilation and arrangement of the material itself. As such, the
geoaccess maps constitute trade secrets wholly exempt from
disclosure.

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                  III. Attorney’s Fees & Costs

     MCNA challenges the trial court’s award of attorney’s fees
and costs to Delta as the “prevailing party.” We recognize the
portion of the trial court’s order granting fees is a non-final, non-
appealable order, as it granted entitlement to fees, but withheld
jurisdiction as to the amount to be awarded. See R.J. Reynolds
Tobacco v. Ward, 141 So. 3d 236, 240 (Fla. 1st DCA 2014).
However, we write to assist the trial court in its considerations on
remand.

     The order, in its current form, fails to specify the party liable
for the payment of the fees and costs or the statutory or contractual
basis for fee entitlement. Presumably, the trial court relied upon
section 119.12, Florida Statutes, as a basis for the award.
However, this statutory subsection is not applicable, and the
parties conceded as much during oral argument. 5 Delta did not
initiate the action under the Public Records Act. The litigation
resulted from MCNA’s request for a declaratory judgment which
Delta joined as a third party intervenor. Accordingly, this is not an
action under section 119, Florida Statutes, but a request for a
declaratory judgment to determine if the documents at issue
constitute trade secrets. Thus, there does not appear to be a basis
upon which to award attorney’s fees. As portions of the order have
been reversed and the attorney fee order is not properly before us,
the trial court must reconsider this issue on remand.

                          IV. Conclusion

     We affirm the trial court’s order compelling production of
those portions of the excel spreadsheets revealing providers
currently affiliated with MCNA, provider categories (1) and (2).
We reverse the order on appeal compelling disclosure of those
portions of excel spreadsheets which reveal “prospective providers”
and the geoaccess maps, in their entirety. We do not rule as to the
entitlement of attorney’s fees and costs as that portion of the order

    5 FHKC further asserts that section 119.12, Florida Statutes,
does not apply as a basis for attorney fees and costs as it is not an
“agency.”

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is a non-final, non-appealable order. The case is remanded for
entry of an order consistent with this opinion.

    AFFIRMED in part, REVERSED in part, and REMANDED.

BILBREY, J., concurs; RAY, J., concurs in result with opinion.

                  _____________________________

    Not final until disposition of any timely and
    authorized motion under Fla. R. App. P. 9.330 or
    9.331.
               _____________________________

RAY, J., concurs in result only. 6
     I agree with the result reached by the majority on the trade-
secret-exemption issues. But because the portion of the trial court’s
order determining Delta’s entitlement to attorney’s fees is not
properly before this Court to review, I would decline to provide
guidance on that issue.

                  _____________________________

Kenneth B. Bell, Michael R. Cavendish, and Lauren V. Purdy of
Gunster, Yoakley & Stewart, P.A., Tallahassee, for Appellant.

Nathan A. Adams, IV, of Holland & Knight LLP, Tallahassee, for
Florida Healthy Kids Corporation; Thomas P. Crapps, Timothy G.
Schoenwalder, and Joy M. Ryan of Meenan P.A., Tallahassee, for
Appellees.

    6 Judge Ray substituted for Judge Winsor after oral argument
in this case.

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