U.S. District Judge Jeffrey White, Northern District of California
U.S. District Judge Jeffrey White, Northern District of California (Jason Doiy)

SAN FRANCISCO — As federal prosecutors wrap up their case in a rare economic espionage trial, a key witness took the stand to drive home an obstruction of justice charge levied against Oakland entrepreneur Walter Liew.

However, before Jian Liu, a former employee of the defendant, testified, his lawyer, Mary McNamara of Swanson & McNamara, and Liew’s counsel at Keker & Van Nest wrestled over the ground rules for his appearance in an unusual clash between an assertion of attorney-client privilege and a defendant’s rights at trial.

The dispute stems from the government’s accidental production during discovery of emails exchanged between Liu and his attorney Marc Bernstein, who is representing him in another matter. McNamara argued that the emails were shielded by attorney-client privilege and insisted on their return. But Liew’s defense team fought to hang onto the messages and use them to cross-examine Liu, arguing that they contained exculpatory material. Specifically, Liu suggested in the emails that he wanted to return to work for Liew, undercutting the government’s theory that he had been intimidated, the defense argued.

Late Friday U.S. District Judge Jeffrey White sided with McNamara that the emails were privileged. White found flaw with the defense’s argument that the government surrendered Liu’s attorney-client privilege by waiting so long to object to the emails.

“The government does not hold the privilege; Mr. Liu does,” White wrote in a four-page order.

Liew, who is accused of stealing trade secrets from E.I. du Pont de Nemours & Co. and selling them to China, was released on bond last month after more than two and a half years in prison. The government alleges that Liew advised Liu, an engineer at his company USA Performance Technology Inc., not to say anything during the investigation of a civil case filed against them by DuPont. The episode is the basis for a witness tampering charge. Although White did not admit the emails exchanged between Liu and his counsel into evidence, he permitted the defense to inquire about facts gleaned from the correspondence. And Assistant U.S. Attorney John Hemann appeared to tackle their content preemptively during his direct examination of Liu. Guided by Hemann, Liu admitted that he wanted to return to work for USAPTI and also sought a job for his wife after Liew pressured him not to say anything damaging to investigators.

Liu also testified that he lied to a DuPont investigator about USAPTI’s employees, which included a former DuPont engineer. “I tried to honor my promise,” Liu told Hemann.

Keker associate Simona Agnolucci cast her client’s overtures to Liu in a different light. During her cross-examination of Liu, Agnolucci suggested that Liew had been trying to inform Liu of his right not to engage with DuPont during its civil investigation. She noted that Liu had been forced to sell his house to pay his legal bills after the industrial giant launched its inquiry.

Liew “was worried for your wellbeing,” Agnolucci said. “He was a friend.”

She also pointed out that Liu was dropped as a defendant in the civil and criminal litigation after he began cooperating.

“It was extremely stressful for you to be sued by DuPont, especially when you didn’t think you’d done anything wrong,” Agnolucci said.

“That’s true,” Liu conceded.

Under questioning from Agnolucci, Liu testified that had not been concerned about USAPTI’s practices even after reviewing designs and attending meetings with Chinese officials.

Hemann challenged that testimony during his redirect, reminding Liu that he had discarded a document given to him by Liew.

“Why did you throw away the document if you weren’t concerned?” Hemann asked.

“Anything related to DuPont, I didn’t want to have it in my house,” Liu said.

Contact the reporter at jlove@alm.com.