How The Fla. Supreme Court Is Changing Business Litigation

2021 was a doozy for business litigators — and their clients — in Florida state court. In the span of about a year, the Florida Supreme Court introduced three sweeping changes to the Florida Rules of Civil Procedure: a fresh summary judgment standard, a new apex deponent rule and immediate review of early punitive damages decisions.

While these changes touch all civil litigation, they've reverberated particularly powerfully throughout the Florida business litigation world. On the whole, Florida's business litigators should now enjoy fairer, more predictable and more efficient litigation outcomes.

This article explores those three changes, what they mean and what to expect next — including proposed modifications to Florida rules around risk-shifting proposals for settlement. Indeed, these changes aren't isolated, one-off procedural touch-ups — they suggest that Florida's highest court plans to continue to revamp Florida business litigation in 2022 and beyond.

A Fresh and Federalized Summary Judgment Standard

2021 began with a bang. On the last day of 2020, the Florida Supreme Court announced that, effective May 2021, the Florida summary judgment standard would mirror its federal counterpart.[1]

This was a massive change; before May of last year, summary judgment in state court was functionally dead letter. Under the old standard, litigants had to "prove a negative … the nonexistence of a genuine issue of material fact."[2]

The practical result: The "burden of a party moving for summary judgment" under the retired rule was "greater, not less, than that of the plaintiff at trial."[3] Thus, undeserving cases often squeaked through summary judgment, increasing settlement pressure, magnifying defense-side risk and ballooning litigation budgets.

No more. By harmonizing the state and federal standards, the Florida Supreme Court breathed new life into Florida summary judgment practice. Now, Florida litigants don't need to prove a negative to win summary judgment. Instead, "the burden on the moving party may be discharged by 'showing' … that there is an absence of evidence to support the nonmoving party's case."[4]

Expect at least three practical impacts: more trial efficiency, improved appellate records and new removal considerations.

On the ground, that means defendants can end unmeritorious cases before trial, plaintiffs can win faster, cleaner judgments in meritorious cases, and courts can avoid unnecessary trial time. Under the new rule, expect fewer — and faster trials — as courts and counsel use summary judgment to trim claims, narrow issues and close meritless cases.

Another upshot: better appellate outcomes. Because the new rule requires that trial courts "state on the record the reasons for granting or denying the motion," parties get clearer records and cleaner grounds for appeal — or, on the flip side, sustaining judgment on appeal.

The new rule could change the removal calculus too. Before, the fairer federal summary judgment standard factored heavily into the federal removal calculation. Because Florida's old standard often put summary judgment out of reach — even against shaky cases — defendants preferred access to the federal summary judgment vehicle. With the Florida and federal standards now aligned, the removal balance evens out — even if just a bit.

A New and Improved Apex Doctrine

As big as this summary judgment sea change was, Florida's highest court wasn't done yet. Several months later, the court announced another big reform: a bigger, better and more balanced apex doctrine.[5]

Before, the Florida version of the apex doctrine — which protects high-level corporate and government officials from superfluous depositions — only shielded government officials from apex depositions. Under the old common law rule, agency heads were immune from deposition unless the opposing party (1) exhausted other discovery and (2) showed that the official had unique, relevant and otherwise unattainable information.[6]

But that left a gaping hole: What about apex business leaders? As Florida federal courts and some state court judges have long recognized, "the rationale of the doctrine is equally applicable in the private sphere: courts [should not] countenance unjustified discovery of lead corporate executives for no legitimate reason."[7]

The Florida Supreme Court filled that gap in August 2021, codifying an expanded apex doctrine at Florida Rule of Civil Procedure 1.280(h).[8] Recognizing that "deposition notices directed at an official at the highest level or 'apex' of corporate management … create[s] a tremendous potential for abuse or harassment," the court brought apex corporate officials into the apex doctrine's protective sphere. 

Under the updated apex doctrine, current or former high-level government or corporate officers may move for a protective order from depositions. Any motion under this rule "must be accompanied by an affidavit or declaration of the officer explaining that the office lacks unique, personal knowledge of the issues being litigated."[9]

From there, the burden shifts. Unless the party seeking discovery can show that (1) it has exhausted other discovery, (2) such discovery is inadequate, and (3) the officer has unique, personal knowledge of discoverable information, the court shall issue the requested protective order.[10]

General counsel and business litigators should breathe a sigh of relief. The new rule promises to avoid harassing depositions, streamline discovery and safeguard sensitive business information. Anticipate fewer C-suite depositions, since discovering parties will usually need to exhaust other discovery and prove necessity first.

By removing the apex deposition arrow from most plaintiffs' settlement pressure quiver, the amended rule should also restore some parity to settlement negotiations. Of course, the rule is balanced: It only protects high-level officials and only when those officials genuinely have nothing to offer.

In other words, apex depositions aren't off the table, even in the first instance. If a CEO has unique, personal knowledge about the core issues in a case, she will be subject to deposition.

Immediate Review of Early Punitive Damages Decisions

Just weeks ago, the Florida Supreme Court took another step on its march toward revamping state litigation practice, this time by making certain punitive damages decisions immediately appealable.[11] Like the other changes, this one is subtle but significant.   

Florida has unique rules governing punitive damage pleading. In Florida, a party can't plead punitive damages on day one. Rather, before pleading damages, a litigant needs leave of the court and a heightened showing — through evidence — that there is a reasonable basis for recovering punitive damages.[12]

And until recently, a litigant couldn't appeal decisions denying or granting leave to allege punitive damages until final judgment, leaving defendants exposed to the risk of a nuclear verdict.

Effective April 1, 2022, that changes. Through its latest amendment, this one to the Florida Rules of Appellate Procedure, the Florida Supreme Court made orders that "grant or deny a motion for leave to amend to assert a claim for punitive damages" immediately appealable.[13]

This is big for two reasons.

First, punitive damages often drive — and drive up — defendants' risk calculus. In a world of nuclear verdicts, whether punitive damages are available can mean the difference between a $50,000 verdict and a $5 million verdict. Thus, early review of these decisions is important. Rather than waiting for a nuclear verdict to hit, defendants can now appeal bad punitive damages pleading decisions right away, avoiding nuclear verdicts, multiple trials and invasive discovery.

Invasive financial discovery, that is. The second reason this matters is for discovery purposes. Financial information, in general, is undiscoverable in Florida unless it goes to the heart of a case, judgment was already entered — i.e., in aid of execution — or punitive damages are in play.

Thus, successfully pleading punitive damages unlocks financial discovery, which is often invasive, burdensome and — at trial — prejudicial. It should come as no surprise, then, that crafty litigants sometimes plead punitive damages to open a backdoor to financial discovery. Come April, that door gets slammed shut.

But Wait, There's More!

Is the court done modernizing Florida civil procedure? Don't bet on it. More changes could be around the corner.

For instance, the court has already floated several changes to Florida's proposal for settlement, or PFS, rules. For instance, the court is considering axing the ability to include nonmonetary terms, like long-form settlement agreements, modifying joint proposal rules, and eliminating the existing strict construction standard.[14]

Because proposals for settlement, which activate attorney fees liability, are a popular tool for shifting litigation risk and encouraging settlement, these changes could reshape pretrial settlement strategy.

Whether the Florida Supreme Court changes the PFS rules or not, one thing is for sure: Businesses and business litigators should buckle their seat belts and brace for more change. To date, the court's changes have created a more balanced, predictable and efficient business litigation environment. Here's to hoping for more of the same in 2022 and beyond.

Republished with permission. This article, "How The Fla. Supreme Court Is Changing Business Litigation," was published by Law360 on February 8, 2022.

[1] In re: Amendments to Florida Rule of Civil Procedure 1.510 , SC20-1490, 309 So.3d 192 (Fla. Dec. 31, 2020).

[2] Fla. Atlantic Uni. Bd. of Trustees v. Lindsey , 50 So. 3d 1205, 1206 (Fla. 4th DCA 2010).

[3] Visingardi v. Tirone , 193 So. 2d 601, 604 (Fla. 1966).

[4] Celotex Corp. v. Catrett , 477 U.S. 317, 325 (1986).

[5] In re: Amendments to the Florida Rules of Civil Procedure 1.280 , SC21-929, 324 So. 3d 459 (Fla. Aug. 26, 2021).

[6] Id. at 3.

[7] Id. at 4; see also Cuervo v. Airport Servs., Inc. , No. 12-20608-civ-Goodman, 2014 WL 12802522, at *3 (S.D. Fla. Mar. 4, 2014) (explaining that "[u]nder the 'apex' doctrine, [federal] courts do not generally allow parties to compel the deposition of a high-ranking executive of a corporate party, without first deposing lesser-ranking employees").

[8] See Fla. R. Civ. P. 1.280(h).

[9] Id.

[10] Id.

[11] In re: Amendment to Fla. R. App. P. 9.130 , SC21-129, 2022 WL 57943 (Fla. Jan. 6, 2022).

[12] Fla. Stat. § 768.72(1).

[13] Id. at 8.

[14] In re Amendments to Fla. R. of Civ. P. 1.442, SC21-277.