SAN FRANCISCO (CN) – A federal magistrate forcefully signaled Wednesday that Uber will be barred from telling a jury that its former engineer stole trade secrets from autonomous-vehicle rival Waymo to secure a $120 million bonus, an explanation Uber says would "exonerate" it.
Waymo has claimed since suing Uber in February that Anthony Levandowski, the engineer at the center of the case, downloaded thousands of confidential files from Waymo’s server and used them to develop self-driving cars for Uber. But Uber has countered in recent court filings that Levandowski actually downloaded them to protect a sizable bonus the Google spinoff had promised him, and pleaded the Fifth Amendment to avoid acknowledging it.
Levandowski "was incredibly worried at the time about a very large bonus he was supposed to get from Google. And he felt, essentially, like Google was going to stiff him on his bonus," former Uber CEO Travis Kalanick said during a July 27 deposition, according to a discovery brief Uber filed last week . "And he wanted to – he wanted to have the sort of the work that he did, so he could show that he earned that bonus."
In order to present the bonus explanation to the jury, Uber must waive attorney-client privilege of a March 29 conversation between Levandowski, Kalanick and Uber's general counsel Angela Padilla, during which Levandowski said he took the files so he could get his bonus.
Uber contends the conversation isn't privileged because although Padilla was in the room, she wasn't there to provide Kalanick legal advice. During Wednesday's hearing before U.S. Magistrate Judge Jacqueline Scott Corley, Uber's attorney Karen Dunn said Padilla was instead there because "she is a person of comfort generally to the CEO."
However, Uber insists that other meetings that occurred that night are privileged because Levandowski's attorneys were there.
Nonetheless, Waymo wants access to what was said during the other meetings regarding Levandowski's reasons for taking the files and then pleading the Fifth Amendment to avoid testifying about the theft. It argues in a discovery brief that the information could "reveal holes in Mr. Levandowski’s late-disclosed 'bonus' explanation."
Accusing Uber of selective disclosure in order to hide evidence that could hurt it at trial, Waymo attorney Charles Verhoeven told Corley on Wednesday that Uber waived attorney-client privilege over the communications related to those topics during all of the March 29 meetings when it instructed Kalanick to testify about his conversation with Levandowki and Padilla.
Siding with Waymo, Corley told Dunn she was "flabbergasted" by Uber's assertion that the conversation isn't privileged.
"I find that incredible," Corley said, emphatically stating that the conversation is in fact privileged. "It was completely related to the litigation, it was instigated by it, it was to learn facts so Mr. Kalanick could get advice from his lawyers about how to proceed in the litigation," including whether to testify and fire Levandowksi.
Corley tentatively ruled that Uber can't present the bonus explanation to the jury because it can't waive Levandowksi's privilege over the meeting, even though it is willing to waive its own.
"It's only fair that the waiver extend to everything he said to Uber of why he downloaded the files," she added. "It's not fair (to present) evidence for what Mr. Levandowski said in one meeting but not in what he said in other meetings. That's limited waiver."
Waymo claims Levandowski downloaded 14,000 files from its server just before he resigned in January 2016 to set up a competing company called Otto that same month. The files include ones related to Waymo’s secret LiDAR system – a laser-based scanning and mapping technology its driverless cars use to “see” their surroundings.
Uber announced in August 2016 that it had acquired Otto for $680 million, three months after Otto launched publicly. Waymo says Levandowski met with Uber’s senior executives days before he resigned, and that Uber knew it would be illegally acquiring Waymo's technology but purchased Otto anyway to revive its failing driverless car project.
In a July 14 brief, Uber said Levandowski, who signed on to spearhead Uber's driverless car efforts, had good reason to believe his bosses at Waymo might undervalue or even deny his bonus, the amount of which depended on Google’s valuation of the Chauffeur business.
After acquiring two of Levandowki's autonomous car businesses in 2011, Google agreed to a “Chauffeur Bonus Plan" designed to provide financial incentives to rapidly grow the fledgling project, according to Uber.
Morever, Uber said, Waymo indicated in arbitration papers that it had disputed Levandowski's entitlement to his bonus, though it ultimately paid him the bonus in two installments in 2015 and 2016.
"I do believe people should know the truth about what Mr. Levandowski said," Dunn told Corley Wednesday. "This explanation has a ring of truth to it, so yes, we do want the jury to hear this."
Corley said she would allow Levandowki's attorneys to weigh in on the issue, but said she was "unlikely” to change her mind.
"What you're basically doing is cherry-picking," she told Dunn in reply to Dunn's objection to excluding the bonus evidence from trial. "That's not fair. That's not how litigation works. That's not getting to the truth."
Trial is set for Oct. 10.
Dunn is with Boies Schiller Flexner in Washington, and Verhoeven with Quinn Emanuel Urquhart & Sullivan in San Francisco.
Levandowski is represented by Ismail Ramsey and Miles Ehrlich of Ramsey & Ehrlich in Berkeley. They could not be reached for comment Wednesday.
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.
