Uber Can Withhold Attorney Files in Driverless-Car Discovery

SAN FRANCISCO (CN) – Despite multiple orders directing Uber to hand over evidence in a trade secrets brawl with Google spinoff Waymo involving driverless car technology, attorneys for both companies were back in court Friday debating which documents Uber must share.

U.S. Magistrate Judge Jacqueline Scott Corley handed Uber its first discovery victory Friday, ruling that the ride-hailing giant does not have to produce communications with its attorneys at Morrison and Foerster, which are listed on a privilege log it gave Waymo in March.

Corley didn’t buy Waymo’s argument that even if the communications are privileged, they must be produced under the crime-fraud exception.

“I do not find that the crime-fraud exception applies, so I’m not going to order those documents which are just between Uber and MoFo [Morrison & Foerster] be produced,” Corley said.

The crime-fraud exception states that communications are not privileged when a client consults an attorney for advice on furthering a crime.

Waymo sued Uber and its driverless car company, Otto, in February, claiming its former engineer, Anthony Levandowski, stole 14,000 confidential files from Waymo related to its self-driving car technology. Waymo accused Uber of using those files to set up Otto, which Uber quickly acquired. Waymo did not name Levandowski as a defendant.

The following month, Uber gave Waymo a privilege log that contained a due-diligence report, which it had commissioned to evaluate the Otto acquisition. Stroz Friedberg, the investigation firm that prepared the report, purportedly saw the stolen files during its review. Fearing criminal prosecution, Levandowski invoked his Fifth Amendment rights. This allowed him to avoid testifying at his deposition about the report and also prohibited Uber from giving Waymo a revised privilege log with more information about it, including whether Levandowski had any of the documents Stroz Friedberg reviewed.

U.S. District Judge William Alsup, who is overseeing the case, denied Levandowski’s Fifth Amendment motion, writing in a May 15 order that Levandowki had likely concealed “troves” of self-incriminating evidence by trying to invoke the Fifth Amendment.

Waymo still wants the due-diligence report, but Uber insisted that it was protected by work-product and attorney-client privilege. Corley, however, ruled earlier this month that Uber must produce it, and Alsup affirmed the decision this week.

Fighting now for the communications on Uber’s privilege log between Uber and its lawyers, which may relate to the due-diligence report, Waymo attorney Charles Verhoeven made his case Friday about the crime-fraud exception.

“If you are aware that someone has stolen files and you come into possession of these stolen files, it is a crime to continue to conceal that from the competitor and work with the person, in this case Mr. Levandowski, who has taken the Fifth, to continue to destroy that evidence or maintain it in some confidential way,” he said.

Bolstering that argument is a Wednesday filing by Waymo telling the court that Uber admitted that Levandowski told Uber CEO Travis Kalanick more than a year ago that he had five discs containing information from Google, and that Kalanick told him not to bring the information to Uber. Shortly after, Levandowski told Uber that he had destroyed the discs.

“I’ve reviewed in-camera the due-diligence report, and I don’t find that,” Corley replied. “What the due-diligence report is about, I found, in order to evaluate acquiring Otto, they were doing an investigation into Mr. Levandowski, including whether they had taken any documents and to create a record should any indemnification obligation arise. That’s not crime-fraud. There is no evidence they consulted MoFo [Morrison & Foerster] in order to receive stolen property. The communications have to be in furtherance of that scheme.”

Uber attorney Martha Goodman told Corley that an exhaustive search of Uber’s servers for the files hasn’t turned them up.

“All of the evidence [shows] that Uber does not possess these files,” she said. “In fact, all of the evidence shows that Uber is doing all it can to make Levandowski return anything that belongs to Google.”

Uber fired Levandowski last month for refusing to cooperate with its internal investigation into the files.

Verhoeven countered that Morrison & Foerster has admitted that it has the files. And in a brief, Waymo contends that the firm “has been sitting on some of the stolen files for over a year.”

Corley remained unconvinced, telling Verhoeven that “there is an inference to be drawn” that Morrison & Foerster received the files along with the due-diligence report while reviewing the Otto acquisition.

“You can’t prove by the preponderance of the evidence that that is receipt of stolen property,” she said, before reminding Verhoeven that Waymo will still get the due-diligence report.

Although Alsup has ordered Uber to turn over the report, he stayed his ruling until June 30 so Uber and Levandowski can appeal his decision.

Uber still faces an uphill battle over producing evidence. The company failed to meet a May 31 deadline to make Levandowski return the files, prompting Waymo to move earlier this week for an order to show cause why Uber should not be held in contempt for missing the deadline.

A hearing on that motion is set for July 27.

Verhoeven is with Quinn Emanuel Urquhart & Sullivan in San Francisco, and Goodman is with Boies Schiller Flexner in Washington.

 

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