Judge Slams Uber for Digging Up Litigant’s Dirt

MANHATTAN (CN) — Uber's team of unlicensed private eyes engaged in "blatantly fraudulent and arguably criminal conduct" to dig up dirt on a Connecticut man behind a class-action lawsuit opposing surge pricing, a federal judge said on Monday.

The day Spencer Meyer sued Uber and its CEO Travis Kalanick on Dec. 16, the company's general counsel Salle Yoo floated a question to the company's general security officer.

"Could we find out a little more about this plaintiff?" Yoo reportedly asked in an email.

The message eventually got forwarded to Mat Henley, Uber's director of investigations, who retained Manhattan-based firm Global Precision Research to snoop on Meyer and his lawyer Andrew Schmidt.

In a 31-page ruling published Monday, U.S. District Judge Jed Rakoff skewered the course the San Francisco-based company took.

"It is a sad day when, in response to the filing of a commercial lawsuit, a corporate defendant feels compelled to hire unlicensed private investigators to conduct secret personal background investigations of both the plaintiff and his counsel," Rakoff wrote. "It is sadder yet when these investigators flagrantly lie to friends and acquaintances of the plaintiff and his counsel in an (ultimately unsuccessful) attempt to obtain derogatory information about them."

Doing business under the name Ergo, the Uber-retained company describes itself as a business intelligence and advisory firm, and its website boasts of taking on 800 projects in nearly 120 countries.

The CIA's former chief strategy officer Todd Egeland and ex-Department of State employee Matthew Moneyhon serve as its managing partners, and they received Uber's inquiry about opposition on the lawsuit.

Boasting that they "do quite a bit of this work for law firms," the men assigned the case in January to Ergo's investigator Miguel Santos-Neves, who used false pretenses to pester 28 of his targets' acquaintances and colleagues, according to the ruling.

The judge said that, in one instance, Santos-Neves posed as a researcher upon learning that Meyer had been a Yale University-affiliated conservationist.

Santos-Neves also illicitly recorded phone conversations without consent in Connecticut and New Hampshire, states with two-party consent laws, according to the ruling.

Following a roughly two-week investigation, Ergo reported to Uber: "Meyer may be particularly sensitive to any publicity that tarnishes his professional reputation."

Ergo's cover got blown after a co-counsel on Meyer's team, Brian Feldman, got suspicious and followed up on who had been calling the acquaintances of the firm and its client.

Though Uber and Ergo sought to protect their communications under work-product privilege, Judge Rakoff found that the crime-fraud exception undermined that claim.

"Here, the court finds that Ergo, in investigating plaintiff, was engaged in fraudulent and arguably criminal conduct, and that many of the documents over which Ergo claimed work-product protection were intended to facilitate this fraudulent and arguably criminal activity," the opinion states.

Uber and Ergo did not immediately reply to emailed requests for comment Monday.

In a phone interview, Meyer's attorney Feldman emphasized that Ergo's investigation failed because of his client's "sterling professional reputation."

"We're certainly pleased with the court's opinion," he said, declining to say much more to protect his client's privacy.

The judge, however, had much more to say about Uber and Ergo's conduct.

"Even beyond the rules of professional conduct, moreover, litigation is a truth-seeking exercise in which counsel, although acting as zealous advocates for their clients, are required to play by the rules," Rakoff wrote. "It would plainly contravene this truth-seeking function if non-lawyers working for counsel, such as Ergo, could make fraudulent representations in order to surreptitiously gain information about litigation adversaries through intrusive inquiries of their personal acquaintances and business associates."

Rakoff ordered Uber not to use the information that it gleaned on Meyer and Schmidt or try to investigate their backgrounds any further.

"Specifically, the court hereby enjoins both defendants and Ergo from undertaking any further personal background investigations of individuals involved in this litigation through the use of false pretenses, unlicensed investigators, illegal secret recordings, or other unlawful, fraudulent, or unethical means," the opinion states.

Uber avoided monetary sanctions by reaching an undisclosed settlement for the plaintiff team's legal fees.

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