A federal magistrate judge on Wednesday blew up Uber’s latest gambit in its trade secret dispute with Google over driverless car technology. And she brought out heavy artillery to do it.
Calling Uber’s tactic “incredible,” “astounding,” “jaw dropping” and more of a stretch than Flubber, U.S. Magistrate Judge Jacqueline Corley said she believed that former CEO Travis Kalanick should be blocked from testifying about a March 29 discussion he had with former employee Anthony Levandowski and Uber litigation chief Angela Padilla.
Uber wants to waive attorney-client privilege for that conversation, in which Kalanick and Padilla say Levandowski admitted downloading Google files—not to advance Uber’s driverless car business, but to prove he’d earned a bonus that Google had promised him. At the same time, Uber wants to preserve the privilege for other meetings involving Kalanick, Levandowski and Padilla—including two held the same day.
Corley, who is managing discovery for U.S. District Judge William Alsup ahead of an October trial, told Uber attorney Karen Dunn of Boies Schiller Flexner that isn’t going to fly. “Whenever you want it to be privileged it’s privileged, and when you don’t you don’t. That’s what it looks like in spades, Ms. Dunn,” Corley said.
Dunn argued that Padilla was not providing legal advice at the meeting in question, but acting “as a person of comfort” for Kalanick in a business discussion. It’s a role Padilla played frequently at the company, Dunn said. “Sometimes there are business objectives and sometimes [Uber’s lawyers] are called for litigation advice,” she said. Under case law, attorney-client privilege is triggered only when the lawyer’s primary purpose is legal advice, Dunn stressed.
Corley said she was astonished Uber would take such a position because of the Pandora’s box it could open. “That’s a dangerous argument because Uber is in a lot of litigations,” Corley said. “I really wonder if they’ve thought this argument through.
FLURRY OF MEETINGS
The meetings in question occurred March 29, 2017. That was one month after Google and its driverless car subsidiary Waymo LLC filed its lawsuit accusing Levandowski of downloading 14,000 files from Google servers and taking them to his new job running Uber’s driverless car division. Earlier that day, Alsup had held an in-chambers hearing where attorneys for Levandowski first announced he intended to invoke his Fifth Amendment right against self-incrimination.
Afterward, Padilla and Kalanick met with Uber’s then-general counsel, now chief legal officer, Salle Yoo, other Uber executives and Levandowski. The group reviewed the hearing transcript and discussed its implications. Padilla stated in a declaration that she considers that discussion privileged because she offered legal advice on those issues.
Then Padilla, Levandowski and Kalanick met alone in a different conference room. Kalanick pressed Levandowski on what happened at Google, Padilla stated in her declaration. Levandowski explained that he’d downloaded the files so he could prove to Google he’d earned his bonus. Kalanick has testified that he told Levandowski that was “f’ing dumb” and that he should explain it to Alsup.
“I recall saying to Mr. Levandowski that while I could not provide him any legal advice, I agreed he should just tell the court what he did,” Padilla stated in her declaration. She said she did not consider that conversation privileged because she wasn’t providing legal advice.
Finally, Kalanick and Padilla met with Levandowski and his personal lawyers later that day to try to persuade him to testify. Levandowski’s lawyers invoked the common interest agreement between Uber and Levandowski; therefore, Padilla said, she was obliged to keep those discussions confidential.
“Why is the head of Uber’s litigation in that meeting?” Corley asked Dunn on Wednesday, referring to the second meeting. “She was there to do what?”
When Dunn hesitated for a few seconds, Corley jumped back in. “You can’t answer because of course she was there as Uber’s in-house counsel.
REVOKING THE WAIVER
Corley said it was clear Padilla was gathering facts related to the litigation, hearing an Uber executive’s concern about incriminating himself, and then advising him to take action that furthered Uber’s legal interest.
“Ms. Dunn, you must know how this looks,” Corley said. She said Uber had made “a strategic decision that Mr. Kalanick would be allowed to testify to that conversation and no other.”
Dunn argued that any waiver had been inadvertent and based on a good-faith belief that the conversation was privileged, leading Corley to again put the attorney on the spot.
“Do you want to take the waiver back then?” she asked. “I’ll give you that choice. Right now. And then the statements won’t come in.”
When Dunn didn’t immediately respond, Corley declared, “It’s no longer inadvertent. It’s an intentional waiver.”
Quinn Emanuel Urquhart & Sullivan partner Charles Verhoeven argued for Google that Uber has now waived attorney-client privilege for any discussions Kalanick had with Levandowski about why he downloaded the files, why he’s pleading the Fifth, and how Levandowski responded to Kalanick.
Corley agreed. But “the rub,” she said, is that Uber can’t legally waive Levandowski’s Fifth Amendment right. Assuming Levandowski continues to assert it, Google still can’t get at that information, Corley said.
She said that the waiver should cover all of the conversations Kalanick and Levandowski had with counsel or none of them. “If everything Mr. Levandowski told Uber comes in, then fine,” she said, but Uber cannot be selective.
In any event, whatever Kalanick says Levandowski told him will likely be subject to a hearsay objection at trial, Corley added. “It may all be much ado about nothing,” she said, “because it isn’t coming in anyway.”
She asked the parties to brief the scope of Uber’s waiver, indicating she’d be inclined to limit it to Levandowski’s statements.