Trade secrets and transparency clash in suit over public records request

By Taryn Phaneuf | Jun 3, 2016

TALLAHASSEE – A dispute over a public records request submitted to the state children’s health insurance program brings to light the tension between protecting trade secrets and transparency – two important facets of state law that can sometimes be at odds.

Managed Care of North America manages dental benefits for the Florida Healthy Kids Corp., a government-funded program offering health insurance for children between 5 and 18 years old. MCNA sued Florida Healthy Kids in Leon County Circuit Court after it learned of a public records request for documents about MCNA’s bid, including some identified as trade secret.

The action seeks to prevent the release of those trade secret documents. Judge James Hankinson granted a temporary injunction May 16 to prevent the release of the documents until the case is resolved.

The public records request was made by Thomas Crapps, a former administrative law judge and an attorney at Meenan in Tallahassee.

As a sidenote, MCNA was the single biggest donor to Rick Perry’s failed presidential bid. Perry lobbied Gov. Rick Scott for the dental carve-out law that Scott signed in March, which excludes dental from the list of mandated services that health maintenance organizations have to provide the poor.

Typically, courts are sensitive to the need to maintain trade secrecy, Elizabeth Rowe, a University of Florida professor who is an expert in trade secrets law, told the Florida Record.

“A trade secret owner has a lot to lose by having the trade secret divulged,” she said.

The contents of the records in question are secret, but they could include any information MCNA would want to keep out of competitors’ hands, such as bid, contract or fees information, Rowe said.

Florida state law gives trade secret owners a course of action to address the theft of trade secrets but in this case their right to secrecy could bump into the public’s right to know. The Florida Sunshine Law guarantees public access to public records of government agencies.

Rowe said this “policy tension” plays out more profoundly in cases where, for example, trade secrets protect information pertaining to public health, like formulas for pharmaceuticals included in records submitted to regulating agencies.

“That‘s what makes it such a powerful right because it can be asserted in a lot of situations to prevent disclosure of information,” she said.

The court will have to determine whether to disclose the documents as requested. If MCNA marked certain records as confidential or trade secret when it handed them over to Florida Healthy Kids, it would help its case, Rowe said.

“It’s a first step. It provides an indication that from the very beginning, they recognized that it was proprietary,” she said. When trade secret owners don’t point out trade secrets from the start and instead look to keep it confidential once a request is made, “it looks like you’re just trying to prevent information from going public,” she said.

It is possible for companies to mark information as a trade secret when it shouldn’t be, she added. Judges have the option to review the documents and weigh the public’s right to know against possible harm to the company. That requires knowing why the request was made in the first place – information that hasn’t been provided yet in this case. A judge has some options other than simply releasing or not releasing the information, such as releasing part of it or redacting portions.

Judges really vary on the issue, though.

“Some courts will just err on the side of caution and will not disclose anything without even making a determination of whether it’s a trade secret or not. Other times, courts will be more analytical about it,” Rowe said.

Want to get notified whenever we write about University of Florida ?

Sign-up Next time we write about University of Florida, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

University of Florida

More News

The Record Network