Uber could be left with some discovery-related whiplash after a rough few days in federal court last week. The ride-hailing company is in the midst of a high profile lawsuit with Waymo, a self-driving car company that is part of Googleâs parent corporation, Alphabet. Waymo accuses Uber driving off with its trade secrets in a case that the New York Times describes as âone of the most important courtroom fights for the tech industry in yearsâ whose outcome âcould affect the future of driverless car technology.â
The two companies have been in a fierce battle over evidence ever since Waymo filed suit in February. Last week, Uber suffered two major setbacks in that battle. First, a ruling that Uberâs CEO and in-house counsel had waived attorney-client privilege on an issue central to the case, followed by threats by Judge William Alsup to put Uberâs lawyers on the stand to testify as to why Uber did not âcome cleanâ over evidence allegedly in its possession.
The dispute stems from Anthony Levandowskiâs move from Waymo to Uber a year ago. Levandowski, a self-driving car expert, was an engineer at Waymo until he left in January, 2016, to form his own autonomous truck company, Otto. Six months later, Uber bought Otto for $680 million, with Levandowski joining the tech company as vice president of engineering for its self-driving car project. That move, Waymo alleges, was a scheme to steal Waymoâs technology. Itâs suing Uber and Otto for trade secret misappropriation.
A day after the suit as filed, Levandowski told Uber that he had downloaded documents from WaymoâWaymo puts the number at 14,000 filesâbefore departing in order to help him work from home and, perhaps, to make sure he was given a bonus by Google. Uber fired Levandowski in May, after he asserted his Fifth Amendment right against self-incrimination rather than turn over documents and missed an internal deadline to hand over information to the company.
Uberâs Waives Privilege It Claims It Didn't Have
The first setback to Uber last week came on Monday, as U.S. Magistrate Judge Jacqueline Scott Corley ruled that the ride-hailing company had waived attorney-client privilege regarding conversations between Levandowski, Uberâs then-CEO Travis Kalanick, and Uberâs in-house litigation counsel.
This was not your typical privilege ruling, however. Rather than asserting privilege, Uber, the privilege holder, insisted that the discussion wasnât privileged. That put the court in what Magistrate Judge Corley described as the âunusual situation of having to adjudicate whether a conversation is privileged notwithstanding the purported privilege holderâs insistence that it is not.â
The conversations in question took place not long after Waymo sued Uber. On March 26th, 2017, for example, Kalanick and Uberâs counsel met with Levandowski, then still in charge of Uberâs self-driving car engineering team, to discuss the suit and his intent to invoke the Fifth Amendment. Three days later, Levandowski met with Uber executives and lawyers, followed by a smaller meeting with Kalanick and Angela Padilla, Uberâs associate general counsel for litigation and employment.
Both Kalanick and Padilla counseled Lewandowski against pleading the Fifth. Though Padilla noted she couldnât provide Lewandowski with legal advice, she urged him to âjust tell the Court what he did.â During that conversation, Levandowski repeated an earlier claim that he had downloaded files from Waymo in order to use them while working at home, adding as well that his downloading was motivated in part over concerns that he wouldnât be paid his bonus.
Uber later revealed that Levandowski had told Kalanick that he downloaded the files to ensure payment of his bonus, but failed to initially disclose that Padilla had been present as well, which âwould have revealed the attorney-client privilege issue,â according to the court.
When deposed by Waymo in July, Kalanick discussed the content of the conversations with Levandowski, including his reasons for invoking the Fifth, and was clear that attorneys had been present at all such conversations.
Kalanickâs testimony, Waymo subsequently argued, waived any privilege objection not just to the conversation itself, but to the entire subject matter, to âeverything Mr. Levandowski said to Uber on those topics.â
Uber argued, unsuccessfully, that the conversations were not privileged in the first place, thus there could be no subject matter waiver. The purpose of the March meeting between between Levandowski, Kalanick, and Padilla, Magistrate Judge Corley concluded, âwas to learn information from then-Uber executive Mr. Levandowski to enable to [sic] Ms. Padilla and her colleagues to advise their clientâUberâabout how to proceed in the lawsuit.â
The court further rejected Uberâs argument that Padilla had been present in order to âcomfortâ Kalanick, rather than in a legal function. âShe was Uberâs head of litigation,â the court noted with more than a hint of incredulity. âShe was present at similar meetings immediately before and after that were the purpose of providing legal advice.â
Even if she was there for âcomfort,â that made no difference. âWhy was Ms. Padilla a comfort? Because she was the in-house litigation counsel and Mr. Kalanick was hoping to learn facts relevant to this litigation.â
Thus finding that the conversations were subject to attorney-client privilege, the court went on to hold that Uber had deliberately waived that privilege by disclosing the communicationsâand that waiver extended to âundisclosed communications regarding the subject matter of the disclosed communications.â
Uber's insistence that the conversations weren't privileged initially left Magistrate Judge Corley "flabergasted." Uber, however, had sought to reveal Levandawski's bonus claim on the belief that the bonus motivation would "exonerate" the company. Now, however, evidence connected to those conversations could expand well beyond what Uber wanted to presentâevidence Waymo asserts will "reveal holes in Mr. Levandowskiâs late-disclosed âbonusâ explanation." If Uber's strategy was to selectively work around privilege, revealing only the information that might benefit it, that approach would seem to have crashed and burned.
The question of whether Levandowski had an individual attorney-client privilege that was also waived is still undetermined, but the ruling could open the flood gates to additional discovery covering both Levandowskiâs motivations for downloading documents from Waymo and for invoking the Fifth Amendmentâpotentially exposing Uber to way moâ discovery woes.
Will Uberâs Lawyers Be Forced to Testify?
Uberâs rough Monday was soon followed by an even worse Wednesday, during which U.S. District Judge William Alsup indicated that he could let the jury hear about Uberâs failure to âcome cleanâ with all documents during discovery. As Bloomberg notes:
Since the case was filed in February Alsup has repeatedly expressed frustration with lawyers at Morrison and Foerster, or MoFo, for making sweeping arguments that information sought by Waymo is protected by confidentiality provisions and out of its adversaryâs reach.
The suggestion that a jury could be informed of Uberâs evasiveness came as Waymo complained that Uber was withholding important evidence. According to Waymo, Uberâs third-party discovery and technology vendor was able to recover ESI through forensic imaging of Levandowskiâs computer, but Uber repeatedly asserted that it did not have those documents. The company also failed, Waymo says, to disclose that Levandowski had destroyed other Waymo documents until three months after a court deadline to disclose any such destruction.
âI am inclined to tell the jury this scenario, that Uber was ordered to come clean did not come clean,â Judge Alsup said during the Wednesday hearing. âWith these big firms, these big companies, I can't regulate everything. But I can do this: I can tell the jury what we're up against and how they hide the ball.â
The suggestion that the jury could be informed of Uberâs alleged discovery gamesmanship was posited as a potential alternative to holding Uber and MoFo in contempt.
Judge Alsup even suggested that Uberâs lead attorney, Arturo Gonzalez, could be called to take the stand. âYou will be a good witness,â he said. âYouâll be up there explaining to the jury, and youâre going to tell them that, and then Mr. Verhoeven,â Waymoâs counsel with Quinn Emanuel, âwill cross-examine you.â
The judge also expressed frustration with Uberâs shifting claims as to what documents were and were not privileged. âThis was a mess of your own making,â he said. âNow you're now going back through the record and deciding what you need. I see right through it. You're not fooling me for a second. Someone decided, âOh, I need that.â That's how slick it looks.â
In Uber terms, thatâs the equivalent of a one-star review.
Gonzalez, however, rejected Waymoâs accusations. âThe notion that MoFo has the documents is completely false,â he said. âThis is much ado about nothing.â
It wasnât all bad news for Uber last week, however. On Tuesday, the company got a brief respite from the courtâs negative rulings when Magistrate Judge Corley declined to let Waymo depose Uber board members Arianna Huffington and David Bonderman, finding that Waymo hadnât shown they had knowledge of trade secrets theft. Waymo has already backed away from some of its claims against Uber, as well, scaling back its patent infringement claims after Uber changed its self-driving car designs.
The case is fast tracked for trial in San Francisco this October. In the meantime, weâll have to wait and see if Uberâs lawyers end up taking the stand.
This post was authored by Casey C. Sullivan, who leads education and awareness efforts at Logikcull. You can reach him at casey.sullivan@logikcull.com or on Twitter at @caseycsull.
â