Samsung SDI Co. v. Hildreth

299 So.3d 582

SAMSUNG SDI CO., LTD., Petitioner,

v.Scott HILDRETH and Jessica Hildreth, Respondents.

Case No. 2D19-3607

District Court of Appeal of Florida, Second District.

Opinion filed July 8, 2020

David L. Luck, Todd R. Ehrenreich, Alexander Fumagali and Jenna L. Fischman of Lewis Brisbois Bisgaard & Smith, LLP, Coral Gables, for Petitioner.

Joshua D. Moore and Harris I. Yegelwel of Morgan & Morgan, P.A., Orlando, for Respondents.

MORRIS, Judge.

Samsung SDI Co., Ltd., petitions for a writ of certiorari to quash the trial court's order that adopted a magistrate's findings and granted in part and denied in part Samsung's motion for protective order in the underlying products liability action brought by Scott and Jessica Hildreth. We conclude that the magistrate failed to properly analyze whether the Hildreths met their burden of proving the necessity for the inclusion of a sharing provision in the protective order, instead improperly shifting the burden to Samsung to establish good cause for why a sharing provision was unnecessary, and that, as a result, the trial court departed from the essential requirements of law in adopting the magistrate's recommendations on this issue. We also conclude that the trial court departed from the essential requirements of the law by adopting the magistrate's recommended order and merely striking through findings which both parties agreed were improperly included, but failing to account for the fact that the remaining substance of the order was based, at least in part, on the improper findings. Because both of these errors will result in irreparable harm to Samsung, we grant the petition for writ of certiorari.

BACKGROUND

The underlying action arose due to injuries that Scott Hildreth received while using a Samsung battery in conjunction with a vaping device. During the course of the litigation, the Hildreths sought discovery materials from Samsung which Samsung alleged implicated its trade secrets and/or confidential business information. Thus Samsung sought a protective order to which the Hildreths agreed. However, the Hildreths wanted to include a sharing provision in the protective order that would allow them to share the discovery information with certain lawyers who were representing similarly situated plaintiffs. Samsung objected to the inclusion of a sharing provision, relying on Wal-Mart Stores East, L.P. v. Endicott, 81 So. 3d 486 (Fla. 1st DCA 2011), and Cordis Corp. v. O'Shea, 988 So. 2d 1163 (Fla. 4th DCA 2008), and arguing that before sharing any confidential information, a plaintiff must demonstrate the relevance of protected discovery materials to the collateral proceedings and the discoverability of the materials under the law of the collateral jurisdiction.

The matter was referred to a magistrate who determined that while a protective order should be granted, it should contain a sharing provision as requested by the Hildreths. The magistrate thus recommended a denial of Samsung's motion for protective order, while allowing for the dissemination of the allegedly protected material under limited circumstances to lawyers who had currently pending litigation against Samsung involving the same batteries and similar facts. Throughout the order, the magistrate referred to public policy considerations and conduct by corporations that results in injuries nationwide, and the order contained an explicit finding that Samsung could not deny that the use of its battery in conjunction with a vaping device was a public hazard. The magistrate distinguished Endicott and Cordis by noting that they involved disclosure of information to either unknown collateral litigants or lawyers who were not involved in collateral litigation and by noting that the plaintiffs in those cases failed to prove a compelling need for sharing the information. However, the magistrate did not address the concern voiced in both the Endicott and Cordis opinions that a plaintiff must establish the relevancy of the protected discovery and its discoverability within the collateral jurisdiction prior to disclosure.

Samsung filed exceptions to the recommended order and asked the trial court to adopt its proposed protective order rather than the Hildreths' proposed order. The trial court then conducted a hearing, at which the Hildreths conceded that the magistrate's determination that Samsung's battery that was at issue was a "public hazard" under Florida's Sunshine in Litigation Act, § 69.081, Florida Statutes (2019), was erroneous due to the magistrate's failure to conduct an evidentiary hearing. However, the Hildreths' counsel asserted that the trial court could just strike through the references to "public hazard" and/or the Sunshine in Litigation Act while still adopting the remainder of the magistrate's recommended order.

Ultimately, the trial court adopted the majority of the magistrate's recommended order. While the trial court granted Samsung's exceptions regarding the public hazard finding and struck through various paragraphs either in whole or in part, it adopted the remainder of the magistrate's recommended order, thereby denying the rest of Samsung's exceptions and including the sharing provision in the protective order.

ANALYSIS

In order to obtain certiorari review over this nonfinal and nonappealable order, Samsung is required to demonstrate that the order departed from the essential requirements of the law resulting in irreparable harm. See Endicott, 81 So. 3d at 488 ; Cordis, 988 So. 2d at 1165. Certiorari is the appropriate review mechanism for orders compelling production of trade secrets or other confidential information. Cordis, 988 So. 2d at 1165.

Release of the type of protected information involved in this case can result in irreparable harm because it is "cat out of the bag" discovery, meaning that once it has been released, Samsung's privacy or trade secret interest has been invaded and such harm cannot be remedied on direct appeal. Id. at 1166. Thus our focus is on whether the trial court, in adopting the magistrate's recommendation to include the sharing provision, departed from the essential requirements of the law. We conclude that it did.

We first note that while the parties cite numerous federal cases that have either permitted or rejected sharing provisions in protective orders, both the petitioner and respondents have focused most of their argument on the Endicott and Cordis decisions as they are the only Florida appellate court cases to directly address the requirements for inclusion of sharing provisions. We are not persuaded that any of the federal cases provide a firmer foundation for our decision especially in light of the seemingly conflicting opinions among the federal courts as to whether sharing provisions are favored or discouraged. Thus our disposition is guided by the approach taken by the First and Fourth Districts in Endicott and Cordis, respectively, regarding the requirements for inclusion of sharing provisions.

Ostensibly, both Endicott and Cordis have some factual distinctions from this case. For instance, in Cordis, the petitioner challenged disclosure of discovery to lawyers who were not part of the underlying action and who did not represent a litigant in pending collateral litigation. 988 So. 2d at 1166. Thus the petitioner argued that such lawyers did not have a legitimate interest in obtaining the discovery. Id. The Fourth District acknowledged that there were competing interests at play in discovery requests and that "[a] party seeking confidential information must show a need for that information which outweighs the opposing party's need to keep the information confidential." Id. (citing Higgs v. Kampgrounds of Am., 526 So. 2d 980, 981 (Fla. 3d DCA 1988) ). And in Endicott, the petitioner challenged disclosure of discovery to unnamed collateral litigants whose need to view the discovery was only proffered through the assertion of the respondent's counsel. 81 So. 3d at 488, 490. The First District explained that when there is no established collateral litigant, it is impossible to balance the need to protect the confidential material with the need of the person seeking to discover it. Id. at 490.

In this case, the Hildreths want to share the discovery materials with lawyers involved in pending collateral litigation. Thus, to that extent, this case is factually distinguishable from both Endicott and Cordis. But neither the Fourth nor the First Districts' analyses were based solely on the fact that the collateral litigants were unknown or did not have currently pending litigation. Rather, in Cordis, the Fourth District cited Foltz v. State Farm Mutual Automobile Insurance Co., 331 F.3d 1122 (9th Cir. 2003), for the proposition that while courts sometimes favor access to discovery materials for parties engaged in collateral litigation, such access should not be automatically granted but rather should be based on whether a collateral litigant has established "relevance of the protected discovery to the collateral proceedings and its discoverability therein." Cordis, 988 So. 2d at 1167. The Fourth District explained that such a procedure would prevent collateral litigants in states with narrower discovery laws from evading their state law discovery requirements by merely obtaining the protected discovery from a Florida lawyer or court. Id. The Fourth District further explained that even if a party receiving the protected discovery signed an agreement to abide by a Florida court order, Florida judicial resources would be strained because a Florida trial judge would become "a lightning rod for [discovery] enforcement disputes with parties from all over the country." Id. at 1167-68. And in Endicott, the First District relied heavily on the Cordis decision for these same propositions, ultimately concluding that certiorari relief was appropriate to quash the orders under review due to the dangers of having foreign litigants circumvent their own stricter...