KRATOS INVESTMENTS LLC v. ABS HEALTHCARE SERVICES, LLC, 21-2437

Background:

Plaintiffs (ABS Healthcare & Health Option One) sued several defendants alleging a scheme to steal their business; defendants sought arbitration.
The trial court denied the motion to compel arbitration and entered a pretrial protective order allowing parties/non‑parties to designate discovery (including deposition testimony) as confidential "until a court otherwise directs."
Non‑party Corey Shader and defendant Richard Ryscik had portions of their depositions designated confidential under that protective order.
This Court later reversed the denial of arbitration and ordered the case submitted to arbitration under AAA Commercial Rules; the trial court stayed proceedings and sent the matter to arbitration.
While arbitration was pending, Plaintiffs moved in the trial court to de‑designate Shader’s testimony; the trial court lifted the stay and ordered the testimony de‑designated.
Petitioners (the defendants and Shader) filed certiorari petitions to quash the trial court’s post‑referral de‑designation order.

Issues:

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the trial court may de‑designate discovery designated confidential after the case is referred to arbitration	Protective order expressly says confidentiality remains until a court otherwise directs; thus the court can de‑designate	Once referred to arbitration and proceedings stayed, arbitrators have exclusive authority over discovery and protective orders	Arbitrators have exclusive authority during the pendency of arbitration; trial court erred in de‑designating
Whether the protective order’s language forbidding disclosure "until a court otherwise directs" prevents arbitrators from accessing or ruling on the materials	The clause prevents disclosure to anyone (including arbitrators) absent a court order	The arbitration statute and stay require that discovery disputes (including protective orders) be handled by arbitrators once referral occurs	The protective‑order language yields to arbitration law; arbitrators may resolve designation disputes during arbitration
Whether certiorari relief is appropriate to quash the trial court order	Plaintiffs implicitly contend the court acted within the protective order and no irreparable harm exists	Petitioners assert disclosure of confidential financial/business data causes irreparable harm and the court exceeded its authority	Certiorari granted: disclosure of confidential information can cause irreparable harm and the trial court departed from the essential requirements of law by acting during the arbitration stay

Key Cases Cited

Kratos Invs. LLC v. ABS Healthcare Servs., LLC, 319 So. 3d 97 (Fla. 3d DCA 2021) (prior decision sending the matter to arbitration)
Ocala Breeders’ Sales Co. v. Brunetti, 567 So. 2d 490 (Fla. 3d DCA 1990) (trial court retains jurisdiction but must stay proceedings after referral)
Sea Vault Partners, LLC v. Bermello, Ajamil & Partners, Inc., 274 So. 3d 473 (Fla. 3d DCA 2019) (trial court lacks authority to interpose itself in matters submitted to arbitration)
Macro Cap. Corp. v. The Soffer Grp., 822 So. 2d 525 (Fla. 3d DCA 2002) (quashing discovery orders after referral to arbitration)
Greenstein v. Baxas Howell Mobley, Inc., 583 So. 2d 402 (Fla. 3d DCA 1991) (same)
Rousso v. Hannon, 146 So. 3d 66 (Fla. 3d DCA 2014) (orders requiring disclosure of confidential third‑party financial information can cause irreparable harm)
Allstate Ins. Co. v. Langston, 655 So. 2d 91 (Fla. 1995) (disclosure of confidential information may be irreparable)
Nader v. Fla. Dep't of Highway Safety & Motor Vehicles, 87 So. 3d 712 (Fla. 2012) (standards for certiorari review)
Haines City Cmty. Dev. v. Heggs, 658 So. 2d 523 (Fla. 1995) (departure from essential requirements of law standard)
Allstate Ins. Co. v. Kaklamanos, 843 So. 2d 885 (Fla. 2003) (sources of "clearly established law" for certiorari review)
Chemstar Corp. v. Stark, 634 So. 2d 794 (Fla. 3d DCA 1994) (proceedings involving arbitrable issues must be stayed)