J-A17043-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
TALATHA MCLAURIN, INDIVIDUALLY IN THE SUPERIOR COURT OF
AND AS ADMINISTRATRIX OF THE PENNSYLVANIA
ESTATE OF YVONNE G. FIELDS,
DECEASED
Appellee
v.
ARIA HEALTH, ARIA HEALTH SYSTEM,
ARIA HEALTH PHYSICIAN SERVICES,
ARIA HEALTH FOUNDATION, GREGORY
C. BOLTON, SR., M.D., QUEST
DIAGNOSTICS CLINICAL
LABORATORIES, INC., QUEST
DIAGNOSTICS INCORPORATED, AND
ROBERT M. LUCAS, M.D., D.D.S., PH.D.,
Appellants No. 2582 EDA 2016
Appeal from the Order June 29, 2016
in the Court of Common Pleas of Philadelphia County
Civil Division at No.: #03934, April Term, 2015
BEFORE: GANTMAN, P.J., RANSOM, J., and PLATT, J.*
MEMORANDUM BY PLATT, J.: FILED OCTOBER 03, 2017
Appellants, Quest Diagnostics, Inc. and Quest Diagnostics Clinical
Laboratories, Inc., appeal from the order of June 29, 2016, which granted in
part and denied in part its request for a protective order. We vacate in part
and remand.
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*
Retired Senior Judge assigned to the Superior Court.
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We take the underlying facts and procedural history in this matter
from the trial court’s February 16, 2017 opinion and our independent review
of the certified record.
This professional negligence and medical malpractice
action was brought following the death of [sixty-three] year old
Yvonne G. Fields who died of complications related to
endometrial cancer of the uterus. The decedents’ estate,
represented by her daughter, Talatha McLaurin[, Appellee],
alleges that [Appellants and the co-defendants] failed to properly
evaluate or timely diagnose cancer. The complaint named
various Quest Diagnostics entities and Robert M. Lucas, M.D.[,] a
pathologist who worked for Quest Diagnostics. It also named
the gynecologist, Gregory C. Bolton, M.D., who treated the
decedent.
With specific reference to [Appellants], [Appellee] claims
that a slide with an endometrial tissue biopsy specimen was
misread. The specimen was reportedly collected by Doctor
Bolton and submitted to Quest Diagnostics Clinical Laboratories
in Horsham, where it was received, accessioned, interpreted by
Doctor Lucas, and reported by [Appellants] as atrophic
endometrium. [Appellee] avers that it should have been
reported as insufficient tissue.
(Trial Court Opinion, 2/16/17, at 2-3).
On May 1, 2015, Appellee filed the instant medical malpractice action.
During discovery, a dispute arose between Appellee and Appellants
regarding Appellee’s request that Appellants produce their internal policies
and procedures pertaining to the interpretation of pathology specimens.
Appellants unsuccessfully attempted to negotiate an agreement with
Appellee in the form of a stipulated protective order, which stated that
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Appellee and her counsel would not disseminate or use the documents
outside of the litigation.
On March 2, 2016, Appellee filed a motion to compel production of the
documents. At a hearing on March 16, 2016, Appellants advised the trial
court that they wished to present the documents to the court for review and
to argue for a protective order. The trial court advised Appellants to address
the issue via a separate motion for a protective order, which Appellants filed
on March 21, 2016.
On June 8, 2016, the trial court held a hearing on the motion for a
protective order. By order of June 29, 2016, the trial court granted the
motion in part and denied it in part.1 On July 6, 2016, Appellants filed a
motion for reconsideration, which the trial court denied on September 12,
2016. The instant, timely appeal followed. On January 17, 2017, the trial
court ordered Appellants to file a concise statement of errors complained of
on appeal. See Pa.R.A.P. 1925(b). Appellants filed a timely Rule 1925(b)
statement on February 3, 2017. See id. On February 16, 2017, the trial
court filed an opinion. See Pa.R.A.P. 1925(a).
On appeal, Appellants raise the following question for our review:
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1
The trial court granted the motion as to documents from the personnel file
of Dr. Lucas and with respect to various contracts between Appellants and
some of the co-defendants in this matter.
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Should [Appellants’] request to produce [their] secret,
proprietary and competitively sensitive documents, which are
based on and derived from years of data and analysis unknown
to the public, only under the terms of a standard [p]rotective
[o]rder which would limit [Appellee’s] ability to disseminate the
confidential and proprietary documents, be granted?
(Appellants’ Brief, at 3).
Prior to addressing the merits of Appellants’ contention, this Court is
obligated to “first ascertain whether the [order appealed from] is properly
appealable, because the question of appealability implicates the jurisdiction
of this [C]ourt.” Commonwealth v. Borrero, 692 A.2d 158, 159 (Pa.
Super. 1997) (citations omitted). “The general rule is that, unless otherwise
permitted by statute, only appeals from final orders are subject to appellate
review.” Commonwealth v. Sartin, 708 A.2d 121, 122 (Pa. Super. 1998)
(citations omitted). In relevant part, the Pennsylvania Rules of Appellate
Procedure define a “final order” as any order that “disposes of all claims and
of all parties.” Pa.R.A.P. 341(b)(1).
In the instant matter, the trial court’s June 29, 2016 order is not final,
as it concerned a discovery matter. See Jones v. Faust, 852 A.2d 1201,
1203 (Pa. Super. 2004) (“in general, discovery orders are not final, and are
therefore unappealable”). Thus, the challenged order constitutes a non-
final, interlocutory order.
Interlocutory orders are appealable in certain circumstances. Our
Supreme Court explained:
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in addition to an appeal from final orders of the Court of
Common Pleas, our rules provide the Superior Court with
jurisdiction in the following situations: interlocutory appeals that
may be taken as of right, Pa.R.A.P. 311; interlocutory appeals
that may be taken by permission, Pa.R.A.P. [312]; appeals that
may be taken from a collateral order, Pa.R.A.P. 313; and appeals
that may be taken from certain distribution orders by the
Orphans’ Court Division, Pa.R.A.P. 342.
Commonwealth v. Garcia, 43 A.3d 470, 478 n.7 (Pa. 2012) (quotation
marks and citation omitted).
The order at issue is not appealable as of right (per Pa.R.A.P. 311) and
Appellants did not ask for or receive permission to appeal the order (per
Pa.R.A.P. 312). Thus, the question before this Court is whether the order in
this case (or any aspect of the order) is appealable under the collateral order
doctrine. See Pa.R.A.P. 313.
Pennsylvania Rule of Appellate Procedure 313 defines a collateral order
as one that: “1) is separable from and collateral to the main cause of
action; 2) involves a right too important to be denied review; and 3)
presents a question that, if review is postponed until final judgment in the
case, the claim will be irreparably lost.” In re Bridgeport Fire Litigation,
51 A.3d 224, 230 n.8 (Pa. Super. 2012) (citation omitted); see also
Pa.R.A.P. 313(b). An order is “separable from and collateral to the main
cause of action” if the order “is entirely distinct from the underlying issue in
the case and if it can be resolved without an analysis of the merits of the
underlying dispute.” K.C. v. L.A., 128 A.3d 774, 778 (Pa. 2015) (internal
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quotation marks and citation omitted). Further, with respect to the
“separability” prong of the test, our Supreme Court explained that,
“[a]lthough [the Supreme Court will] tolerate a degree of interrelatedness
between merits issues and the question sought to be raised in the
interlocutory appeal, the claim must nevertheless be conceptually distinct
from the merits of plaintiff's claim.” Commonwealth v. Blystone, 119
A.3d 306, 312 (Pa. 2015) (quotation marks and citations omitted).
Our Supreme Court has also emphasized that:
the collateral order doctrine is a specialized, practical [exception
to] the general rule that only final orders are appealable as of
right. Thus, Rule 313 must be interpreted narrowly, and the
requirements for an appealable collateral order remain stringent
in order to prevent undue corrosion of the final order rule. To
that end, each prong of the collateral order doctrine must be
clearly present before an order may be considered collateral.
Melvin v. Doe, 836 A.2d 42, 46-47 (Pa. 2003) (citations omitted).
In keeping with the narrow interpretation of the collateral order
doctrine, our Supreme Court has held that “the collateral order rule’s three-
pronged test must be applied independently to each distinct legal issue over
which an appellate court is asked to assert jurisdiction pursuant to Rule
313.” Rae v. Pa. Funeral Dir.'s Ass'n, 977 A.2d 1121, 1130 (Pa. 2009).
Therefore, even if the collateral order test “is satisfied with respect to one
[appellate] issue,” the assertion of jurisdiction does not necessarily mean
that we have “jurisdiction to consider every issue within the ambit of the
appealed order[.]” Id. at 1123.
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Here, Appellants claim that the trial court erred in denying their
request for a protective order to preclude any dissemination of their
standard operating procedures. (See Appellant’s Brief, at 11). We can
address this claim without analyzing Appellee’s underlying medical
malpractice claim. See Crum v. Bridgestone/Firestone North American
Tire, LLC, 907 A.2d 578, 583 (Pa. Super. 2006). Thus, Appellants have met
the first prong.
With respect to the second prong, the Pennsylvania Supreme Court
has explained that this prong is satisfied “if the interests that would
potentially go unprotected without immediate appellate review of that issue
are significant relative to the efficiency interests sought to be advanced by
adherence to the final judgment rule.” Ben v. Schwartz, 729 A.2d 547,
552 (Pa. 1999) (citation omitted). Further, “it is not sufficient that the issue
be important to the particular parties. Rather it must involve rights deeply
rooted in public policy going beyond the particular litigation at hand.”
Melvin, supra at 47 (citation omitted).
Here, Appellants assert that the documents in question contain trade
secrets and failure to protect them will result in the exposure of those
secrets, causing “irreparable competitive harm[.]” (Appellants’
Brief, at 11). We have stated, “[t]he right to confidentiality in matters
involving proprietary and trade secrets is rooted in public policy and impacts
on individuals and entities other than those involved in the current
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litigation.” Crum, supra at 584 (citation omitted). Further, Pennsylvania
Rule of Civil Procedure 4012(a)(9), which controls the discovery of trade
secrets, permits the trial court to order “that a trade secret or other
confidential research, development or commercial information shall not be
disclosed or be disclosed only in a designated way.” Pa.R.C.P. 4012(a)(9).
Thus, we find that the trade-secret protection is entrenched in public policy
beyond the litigation at hand, and is important enough to justify immediate
appellate review. See Crum, supra at 584.
Lastly, we look at the irreparable loss prong. Again, Appellants argue
that the failure of the trial court to enter the protective order will risk
exposure of their trade secrets. (See Appellants’ Brief, at 11). Our
Supreme Court has stated, “[t]here is no effective means of reviewing after
a final judgment an order requiring the production of putatively protected
material.” Ben, supra at 552 (citation omitted). Clearly, if disclosed, the
confidentiality of the information in question is lost. Accordingly, Appellants
have met the third prong.
For the reasons discussed above, we hold that the June 29, 2016 order
denying in part the motion of Appellants for a protective order is collateral
and appealable of right under Pa.R.A.P. 313. Therefore, we will now address
the merits of Appellants’ contention.
With respect to our standard of review, we have held:
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It is the responsibility of the trial court to oversee discovery
between the parties and therefore it is within that court’s
discretion to determine the appropriate measure necessary to
insure adequate and prompt discovery of matters allowed by the
Rules of Civil Procedure. With regard to requests for protective
orders . . . [,]
[t]here are no hard-and-fast rules as to how a motion for a
protective order is to be determined by the court. Whether to
grant or deny the motion, and what kind or kinds of protective
orders to issue are matters that lie within the sound judicial
discretion of the court, and the court’s determination as to these
matters will not be disturbed unless that discretion has been
abused.
Hutchison v. Luddy, 606 A.2d 905, 908 (Pa. Super. 1992), appeal
discontinued, 611 A.2d 712 (Pa. 1992) (internal citations and quotations
omitted). “An abuse of discretion occurs when a trial court, in reaching its
conclusions, overrides or misapplies the law, or exercises judgment which is
manifestly unreasonable, or the result of partiality, prejudice, bias, or ill
will.” Commonwealth v. Brown, 839 A.2d 433, 435 (Pa. Super. 2003)
(citation omitted).
As discussed above, Appellants sought entry of a protective order
under Pennsylvania Rule of Civil Procedure 4012(a)(9), to protect against
the dissemination of any documents produced during discovery. Again, we
note that Rule 4012(a)(9) states:
(a) Upon motion by a party or by the person from whom
discovery or deposition is sought, and for good cause shown, the
court may make any order which justice requires to protect a
party or person from unreasonable annoyance, embarrassment,
oppression, burden or expense, including one or more of the
following:
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* * *
(9) that a trade secret or other confidential research,
development or commercial information shall not be
disclosed or be disclosed only in a designated way.
Pa.R.C.P. 4012(a)(9).
In the instant matter, in their motion, Appellants claim that a
protective order was necessary because the documents included trade
secrets, namely:
developmental research [which contains] detailed information as
to [Appellants’] techniques and methodologies, so if the
[s]tandard [o]perating [p]rocedures are not protected, a
competitor could readily compare its procedures with those of
[Appellants] and identify those areas needing particular attention
to gain improved performance, eliminating its own expenditures
associated with the evaluation and development of such policies
and procedures. . . .
(Appellants’ Motion for Entry of a Protective Order, 3/21/16, at 6). The trial
court denied Appellants’ motion. Firstly, in its decision, the trial court
appeared to misunderstand the nature of the Appellants’ request, noting that
Appellants, “failed to cite to a single medical malpractice action in which a
judge sitting in Pennsylvania entered a protective order that protected a
defendant’s policies and procedures from production during discovery.”
(Trial Ct. Op., at 4) (emphasis added). The court further found that “a
critical factor” was Appellants’ failure to offer redacted documents or any
papers in response to Appellee’s discovery request. (Id.).
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However, on review, we are constrained to conclude that the trial court
is mistaken. Here, Appellants were not seeking to prevent the discovery of
the documents. Rather, in their motion, Appellants specifically stated,
“[Appellants are] not refusing to produce the requested documents.
[Appellants are] asking only that [their] legitimate business interest in
protecting [their] [s]tandard [o]perating [p]rocedures . . . from broad
dissemination requires entry of a protective order.” (Appellants’ Motion for
Entry of a Protective Order, 3/21/16, at 4-5) (emphasis added). At both the
hearing on Appellee’s motion to compel and the hearing on the motion for a
protective order, Appellants reiterated that they had no objection to
producing the documents. (See N.T. Motion to Compel Hearing, 3/16/16, at
11, 20-21; N.T. Motion for a Protective Order Hearing, 6/08/16, at 10-13,
15). They also stated they had no objection to its use in the litigation and
its dissemination to the parties and any expert witnesses, but only wished to
protect it from dissemination to the public and their competitors. (See N.T.
Motion to Compel Hearing, at 11, 20-21; see N.T. Motion for a Protective
Order Hearing, at 10-13, 15). Therefore, it is evident that Appellants sought
only to protect the dissemination of the documents to the broader public, not
to prevent Appellee’s discovery of the documents and their use in the instant
matter. Thus, the trial court’s analysis of whether or not the documents are
discoverable is not germane to the issue of whether a protective order
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should issue, or whether the circumstances justify such a measure to protect
against dissemination of confidential material.
We note that, in its opinion, the trial court did hold that the material in
question was not a trade secret. (See Trial Ct. Op., at 4). However, its
brief discussion of the issue appears to be inextricably entwined with its
mistaken belief that Appellants sought protection from production during
discovery, rather than protection from disclosure to the public. (See id.).
Further, in making its ruling, while invoking the correct standard of review,
the trial court did not discuss any of the evidence provided by Appellants
and did not discuss, in specific detail, how Appellants failed to meet that
standard.2 (See id. at 3-4).
Our Court has defined a trade secret as, “any formula, pattern, device
or compilation of information which is used in one’s business, and which
gives [it] an opportunity to obtain an advantage over competitors who do
not know or use it.” Crum, supra at 585 (citation omitted). We have held
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2
We are sympathetic to the difficulties faced by the trial court in this matter.
Appellants’ failure to submit the documents in question for review by the
trial court and their refusal to provide specific information regarding the
information contained within them, clearly hampered the proceedings below
and made review by this Court exceedingly complicated. However, we
believe, as discussed infra, that the affidavits submitted by Appellants’
employees provided sufficient information to meet the standard for finding
that the documents constituted a trade secret.
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that the following factors should be considered in determining whether
information is a trade secret:
1) the extent to which the information is known outside of [the]
business; 2) the extent to which it is known by employees and
others involved in [the] business; 3) the extent of measures
taken by [it] to guard the secrecy of the information; 4) the
value of the information to [it] and to [its] competitors; 5) the
amount of effort or money expended by [it] in developing the
information; and 6) the ease or difficulty with which the
information could be properly acquired or duplicated by others.
The crucial indicia for determining whether certain information
constitutes a trade secret are substantial secrecy and
competitive value to the owner.
Id. (citations and quotation marks omitted).
Here, Appellants submitted affidavits from Leslie Kennedy, the quality
assurance manager for Quest Diagnostic Clinical Laboratories, Inc., and from
Dr. Harvey Ronald Kennedy, M.D., the senior medical director for national
medical quality at Quest Diagnostics. (See Affidavit in Support of Protective
Order, 3/17/16, at unnumbered page 1; Second Affidavit in Support of
Protective Order, 6/17/16, at unnumbered page 1). We have reviewed
these documents with the above-stated factors in minds. Appellants do not
make the documents in question available to the public and they are only
disseminated to a limited number of Appellants’ employees. (See Affidavit
in Support of Protective Order, at unnumbered page 3; see Second Affidavit
in Support of Protective Order, at unnumbered page 3). In order to guard
the secrecy of the information contained within the documents, employees
must sign confidentiality agreements and any breach of that confidentiality
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subjects the employee to disciplinary action up to and including discharge
and potential legal liability. (See Affidavit in Support of Protective Order, at
unnumbered pages 3-4). Appellants contend that the information has great
value to its competitors because the standard operating procedures are
based on years of compilation of nationwide research, data and statistics,
leading to a higher quality of testing than their competitors. (See Affidavit
in Support of Protective Order, at unnumbered pages 4-5; see Second
Affidavit in Support of Protective Order, at unnumbered pages 2-3). Further,
Appellants contend that they invested substantial monies in gathering this
data, which Appellants review annually, and writing new or revised
procedures expends many hours of labor. (See Affidavit in Support of
Protective Order, at unnumbered pages 4-5). For these reasons, this
information would be of substantial value to Appellants’ competitors.
Thus, in sum, the evidence provided by Appellants shows that the
standard operating procedures are based on statistics, data, and
information, which indicates their value to them and that the information
could disadvantage them if disseminated to the public. Clearly, Appellants
have taken many measures to safeguard the standard operating procedures
and closely held the information contained therein. Given this, we hold that
the trial court erred in determining that Appellants had not shown that the
documents in question were a trade secret. See Dibble v. Penn State
Geisinger Clinic, Inc., 806 A.2d 866, 871-72 (Pa. Super. 2002), appeal
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denied, 820 A.2d 705 (Pa. 2003) (holding that trial court erred in denying
protective order and finding documents did not contain trade secrets for one
hundred eight documents in medical malpractice case including HMO’s
procedures for its physicians, where HMO guarded confidentiality of
documents, expended funds developing information, and dissemination could
create competitive disadvantage).
Therefore, for the reasons discussed above, we vacate those portions
of the June 29, 2016 order denying the motion of Appellants for a protective
order. The case is remanded to the trial court for entry of an order of
confidentiality to prevent dissemination of the information at issue.
Order vacated in part. Case remanded. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 10/3/2017
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