SAN FRANCISCO (CN) – A federal magistrate indicated Thursday that Uber may have to turn over key documents it has tried to keep from Google spinoff Waymo that could prove Uber stole its driverless car technology.
In making the indication, however, U.S. Magistrate Judge Jacqueline Scott Corley said she would immediately stay her order while the parties appeal her decision to U.S. District Judge William Alsup, who is presiding over the case.
At issue is a due-diligence report Uber commissioned on a competing self-driving car company called Otto, founded by Waymo’s former engineer Anthony Levandowski. The report was prepared by Stroz Friedberg, an investigation firm Uber’s attorneys hired to evaluate the legal risks Uber and Levandowski would face if Google sued over the August 2016 acquisition.
Waymo wants the due-diligence report, arguing it could help prove that Uber and Levandowski – whom Uber tapped to lead its own driverless car program – stole its trade secrets. But Uber insists the report is protected by work product and attorney-client privilege, and by a joint defense agreement Uber and Levandowski signed to develop a common defense if Google sued.
“No, not all of it. Not at all,” Corley told Uber’s attorney Karen Dunn on Thursday, signaling she would rule that at least some of the 42 documents in the due-diligence report aren’t privileged and that Uber must finally produce them.
The due-diligence report purportedly relates to Levandowski’s downloading of 14,000 confidential files from Waymo’s server just before he resigned in January 2016. The files include information on Waymo’s highly secret LiDAR system, a laser-based scanning and mapping technology its driverless cars use to “see” their surroundings.
Waymo sued Uber and Otto in February, claiming Levandowski used its technology to set up Otto, and that Uber acquired Otto so it could get its hands on Waymo’s technology and fast-track its floundering driverless car program. It did not name Levandowski as a defendant.
The following month, Uber gave Waymo a privilege log that describes the 42 documents in the due-diligence report. Waymo, however, called the privilege log vague and incomplete, and said Uber had failed to provide enough information to confirm that it hadn’t waived its privileges over the due-diligence report.
Fearing criminal prosecution, meanwhile, Levandowski invoked his Fifth Amendment rights to avoid testifying at his deposition about the due-diligence report and prohibit Uber from giving Waymo a privilege log with complete descriptions of the report, including whether Levandowski had any of the documents that Stroz Friedberg reviewed.
Alsup denied Levandowski’s Fifth Amendment motion, writing in a May 15 provisional relief order that “troves of likely probative evidence have been concealed from Waymo under relentless assertions of privilege that shroud dealings between Levandowski and defendants in secrecy.”
On Thursday, Waymo attorney Charles Verhoeven said Uber, Otto and Levandowski share no common legal interest beyond concealing their theft of Waymo’s trade secrets.
Verhoeven pointed out that during a separate motion heard Thursday on Levandowski’s request to intervene in order to oppose production of the due-diligence report, Levandowski’s attorney had “talked repeatedly today about the different interests of the parties and how they don’t align sometimes.”
Corley granted Levandowski’s motion from the bench.
Verhoeven told Corley that if any of the due-diligence documents are deemed privileged, Uber must nonetheless produce them under the crime-fraud exception, which states that communications aren’t privileged when a client consults an attorney for advice on furthering an ongoing crime.
“Downloading somebody else’s proprietary documents and taking them is a crime,” he said. “They’re actively not producing it, not giving it over, they’re maintaining a theft. This report looks at the facts and circumstances concerning that theft.”
Though Corley acknowledged that Waymo has proved Levandowski took Waymo’s files, she didn’t seem persuaded that the crime-fraud exception applies.
“This is about whether the due-diligence memo is in furtherance of that crime,” she told Verhoeven. “Let’s assume they had reason to believe the employee may have taken documents with them. I have to tell you, given my experience, it seems you should anticipate there might be something.”
Uber attorney Dunn countered that it can’t be assumed Uber committed a crime just because Levandowski invoked the Fifth Amendment.
“We can go into why there’s no evidence of that: because he won’t talk,” Corley replied. “With Mr. Levandowski refusing to acknowledge that this due-diligence report even exists. I don’t think that’s a good argument in that sense.”
Though Corley signaled she would not order Uber to hand over privileged documents under the crime-fraud exception, she chastised Uber’s attorneys for giving Waymo a redacted term sheet related to the Otto acquisition and ordered Uber to produce an unredacted version by Friday morning.
“The term sheet is a key period, a key point that would certainly inform the court as to the purpose of the due-diligence report,” she said. “The fact that you didn’t raise it is a gigantic red flag in my mind. What are you hiding?”
Verhoeven is with Quinn Emanuel Urquhart & Sullivan in San Francisco, and Dunn with Boies Schiller Flexner in Washington.