Closing The Loop

An impending trial in the trade secrets dispute between Uber and Waymo was put on hold this morning, just six days before trial was set to begin. They delay came after Waymo, the self-driving car business owned by Alphabet, Google’s parent company, accused Uber of withholding relevant evidence. U.S. District Judge William Alsup, of the Northern District of California, agreed this morning to postpone the trial, saying that Uber “withheld evidence from me” and that allowing the trial to go forward would be a “huge injustice.”

The reason for the 11th-hour delay? Electronically stored information that Uber reportedly never produced, despite repeated discovery requests—specifically, a letter between a lawyer for former Uber global security officer Richard Jacobs and Uber’s deputy general counsel. That letter was revealed last week, when the Acting U.S. Attorney for the Northern District of California disclosed it to the court. 

In court on Tuesday, Jacobs testified that, while at Uber, he learned of efforts to gather trade secrets, code, and other information from competitors, according to the New York Times. The Jacobs Letter further accused Uber of acting "to evade, impede, obstruct, influence several ongoing lawsuits," according to the Times, and explained Uber's efforts to "recruit employees of competitors to steal trade secrets." These efforts were done on anonymous servers and on devices that would automatically encrypt or destroy data.

The goal, Jacobs testified, was to ensure that "there was no paper trail that would come back to haunt the company in any criminal or civil litigation.”

Jacobs sued Uber after being fired this spring. The allegations against Uber contained in the Jacobs Letter were made as part of that suit. Jacobs settled his suit out of court for $4.5 million, according to Quartz, and tried to walk back some of the letter's allegations. "I disagree with this now," he reportedly testified. "I have no firsthand knowledge. No knowledge at all." 

In a heavily redacted court filing, Waymo argued that the letter, known as the “Jacobs Letter,” was “responsive to multiple Waymo discovery requests and Court orders,” yet was never produced, nor referenced in any privilege log. Waymo’s filing lists eight requests for production and interrogatories, along with three court orders, that the company says could have required the letter’s disclosure.

A heavily redacted section from Waymo's filing

“The only possible conclusion,” Waymo alleges, “is that Uber intentionally withheld the Jacobs Letter and related materials to prevent Waymo from discovering material evidence in this case.”

The newly revealed ESI could lead to a “lengthy investigation to discover the extent to which [redacted] in the Jacobs Letter relates to Waymo’s trade secret claims and spoliation arguments here,” Waymo says. The new evidence could also require additional depositions of Travis Kalanick, Uber’s former CEO, Uber’s in-house counsel, and the managing director of Uber’s digital forensics vendor, along with a host of Uber executives.

In an indication of how damaging the revelation could be, Judge Alsup reportedly declared “I can no longer trust the words of the lawyers for Uber in this case.” 

Waymo accuses Uber of conspiring with Anthony Levandowski to steal self-driving car technology. Levandowski, a former Waymo engineer, left the company to open his own self-driving car shop, Otto. Just a few months later, Uber payed $680 million for Otto, with Levandowski coming on board as Uber’s vice president of engineering for its autonomous car project. With him came a host of stolen trade secrets, Waymo alleges. The company sued Uber in February and jury selection was set to begin tomorrow, until the last-minute delay.

 

Waymo & Uber's Long-Running Discovery War

Discovery disputes have characterized much of the lawsuit so far, with Waymo accusing Uber of “rampant, intentional spoliation of evidence.” In August, Judge Alsup threatened that Uber’s attorneys could be made to testify over their evasiveness in the discovery process. That threat arose after Waymo claimed that Uber had not turned over documents that its eDiscovery vendor was able to recover from Levandowski’s computer. “With these big firms, these big companies, I can't regulate everything,” Judge Alsup explained. “But I can do this: I can tell the jury what we're up against and how they hide the ball.”

Around the same time, Uber earned the ire of U.S. Magistrate Judge Jacqueline Scott Corley after some privilege gamesmanship gone wrong. At issue in that dispute were conversations between then-CEO Kalanick, Levandowski, and Angela Padilla, the same in-house attorney who recieved the Jacobs Letter. Kalanick had revealed details of those conversations during deposition, after Levandowski indicated that he would stop cooperating in the investigation and invoke the Fifth Amendment.

After Kalanick's depositions, Waymo argued that Uber had waived any claims of attorney-client privilege as to their subject matter. That put the court in the “unusual situation of having to adjudicate whether a conversation is privileged notwithstanding the purported privilege holder’s insistence that it is not.” (The conversation was clearly privileged, the court found, and Kalanick’s testimony waived that privilege.)

As for Uber, the company says that it simply wants to move forward with a drawn-out and contentious case. “Uber has been waiting for its day in court for quite some time now,” the company said in a statement. “We’re keen to have a jury finally hear this case on its merits.”

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. 
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