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Waymo LLC v. Uber Technologies, Inc.

United States District Court, N.D. California

June 21, 2017

WAYMO LLC, Plaintiff,
v.
UBER TECHNOLOGIES, INC., et al., Defendants.

          ORDER GRANTING MOTION TO COMPEL STROZ DOCUMENTS AND DENYING MOTIONS TO QUASH Re: Dkt. Nos. 570, 580, 581, 583, 610, 614, 616, 617, 628, 652

          JACQUELINE SCOTT CORLEY United States Magistrate Judge

         Now pending before the Court is Waymo's motion to compel compliance with its Rule 45 subpoena to Stroz Friedberg. Stroz is a third-party forensic expert retained by Uber and Ottmotto (“Otto”) in early March 2016 to conduct due diligence into certain Otto employees in connection with Uber's potential acquisition of Otto. On June 5, 2017, the Court ordered Uber to produce to Waymo the “Due Diligence Report” prepared by Stroz. (Dkt. Nos. 549, 566.) While Waymo's motion to compel the Stroz Report was pending, Waymo served an expedited subpoena on Stroz. Stroz has refused to comply on the grounds that the documents sought are protected by the attorney-client and/or attorney work-product privilege of Anthony Levandowski, Otto Trucking, and Uber. Levandowski, Otto Trucking, and Uber have in turn moved to quash the Stroz subpoena. Much of the parties' arguments are addressed in the Court's Order granting Waymo's motion to compel the Stroz Report. (Dkt. No. 566.) Nonetheless, for the sake of completeness, the Court briefly addresses some of the arguments here.

         A. Levandowski's Objections

         Levandowski resists production of (1) any material he may have provided to Stroz; (2) any statements or records of statements he made to Stroz, and (3) any records that reference materials he may have provided to Stroz. (Dkt. No. 582-4.) As a preliminary matter, the Court grants Levandowski permission to intervene for the limited purpose of objecting to the Stroz subpoena.

         Levandowski contends that the attorney-client privilege protects documents and other information he personally produced to Stroz. “[V]oluntarily disclosing privileged documents to third parties will generally destroy the privilege.” In re Pacific Pictures Corp., 679 F.3d 1121, 1126-27 (9th Cir. 2012). The reason for this rule is “[i]f clients themselves divulge such information to third parties, chances are that they would also have divulged it to their attorneys, even without the protection of the [attorney-client] privilege.” Id. at 1127 (internal quotation marks and citation omitted). Under these circumstances there is no reason to “recognize the privilege in order to ‘encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice.'” Id. at 1126 (quoting Upjohn Co. v. United States, 449 U.S. 383, 389 (1981)). The Court previously found that Stroz was the agent of Otto and Uber, not Levandowski, and therefore Levandowski had voluntarily disclosed the information to an unrelated third party. (Dkt. No. 566 at 7-8.) Levandowski does not challenge this finding; instead, he argues that at the time of his communications with Stroz, he, Ron, Uber and Otto were part of a “joint defense group” and therefore his communications with Stroz-Uber's agent-are protected by the same attorney-client privilege that would protect Uber's communications with Stroz. (Dkt. No. 583 at 4.) Once again this argument fails.

         As the Court previously held, the “common interest privilege” is a non-waiver doctrine, it does not create a privilege where none would otherwise exist. (Dkt. No. 566 at 11-13.)[1]Levandowski nonetheless cites United States v. Schwimmer, 892 F.2d 237, 241 (2d Cir. 1989), for the proposition that Levandowski could personally communicate with a third party's agent and have those communications protected by the attorney-client privilege. Schwimmer, however, says no such thing. Schwimmer held that the defendant's communications to an accountant hired by an attorney on behalf of Schwimmer and the attorney's client were privileged; that is, that the joint nature of the retention of the accountant led to a non-waiver of the privilege. Id. at 243. Here, in contrast, the Court finds that there was no joint retention: Uber's attorneys did not hire Stroz on behalf of Levandowski and Uber; they hired Stroz to investigate Levandowski. Indeed, even as of the signing of the Put Call Agreement, counsel for Uber and Otto directed Stroz to modify its investigation protocol to clarify that they-and not Levandowski's attorney-were directing the Stroz investigation. (Dkt. No. 566 at 8.)

         United States v. McPartline, 595 F.2d 1321 (7th Cir. 1979), is similarly inapposite. There the court held that a criminal defendant's statements made in confidence to a co-defendant's investigator were made for a common purpose related to the defense of both defendants. In particular, the statements were made in connection with attempting to discredit a witness, a project in which the co-defendants and their attorneys were jointly engaged for the benefit of both defendants. Id. at 1335-36. Here, in contrast, the Court finds that Levandowski's statements to Stroz and his provision of his devices to Stroz were not made in furtherance of a joint defense with Uber, Otto and Ron. To the contrary, based on the Term Sheet, the timing of his interview and the device production, Levandowski's side agreements with Stroz, as well as the timing of the Stroz interim report to Uber, the Court finds that Levandowski made the statements and provided the material to enable Uber to determine whether to acquire Otto and, if so, create a record to determine indemnification rights. (Dkt. No. 566 at 14-20.)

         Levandowski nonetheless insists that he must have shared a common legal interest with Uber in March 2016 because that he entered into a joint defense agreement with Uber, Otto and Ron by March 11, 2016. This factual assertion is unsupported by the record. First, Levandowski misstates the record by arguing that once the Term Sheet was signed, Uber had an obligation to indemnify Levandowski from any misappropriation claims brought by Waymo. (Dkt. No. 583 at 5.) As the Court found, and Levandowski ignores, the Term Sheet explicitly stated that it did not create any binding obligations on Otto and Uber with few limited exceptions. The indemnification is not one of those exceptions. Instead, the Term Sheet provides that the indemnification obligation arises only upon the execution of the Put Call Agreement, which did not occur until April 11, 2016-long after Levandowski gave Stroz his interview and devices. (Dkt. No. 566 at 2-3.) Indeed, Uber does not dispute that no indemnification obligation arose as a result of the Term Sheet signing.

         Second, Levandowski's emphasis on his attorney's representation to Stroz on March 14, 2016 and March 21, 2016 that he shared a common legal interest with Otto confirms the Court's finding of a lack of a joint defense agreement among Uber, Otto and Levandowski. At that time Levandowski and Otto shared an interest in having Uber acquire Otto for millions of dollars and they shared a common interest in at least having Uber sign the Put Call Agreement so that Uber would be obligated to indemnify Levandowski and Otto in the event Waymo sued them. What they did not share was any common legal interest with Uber, the party on the other side of the proposed transaction. It is thus unsurprising that Levandowski's attorney did not state that his client shared a legal interest with Uber (Dkt. No. 566 at 18-19), an omission which Levandowski still does not explain.

         Third, the Stroz engagement letter does not support Levandowski's assertion of a March 2016 joint defense agreement. As the Court found, and Levandowski does not dispute, that letter was actually executed at the time of the signing of the Put Call Agreement in April 2016. At that point, given the Put Call Agreement's indemnification obligation, and the possibility that Uber would itself be sued by Waymo if certain conditions were met and the acquisition completed, Uber, Levandowski and Otto arguably shared a legal interest with regard to a factual investigation of Levandowski's misappropriation of Waymo's trade secrets, among other matters. The engagement letter is not probative of an earlier common interest, especially since it is contradicted by Levandowski's attorney's contemporaneous letters to Stroz. (Dkt. No. 566 at 18-19.)

         Fourth, Levandowski can still point to no contemporaneous evidence that he had a joint defense agreement with Uber in March 2016. The contemporaneous evidence in the record, most significantly the Term Sheet and Levandowski's attorney's March 2016 letters to Stroz, supports the Court's finding that Levandowski did not have a joint defense agreement at that time.

         Fifth, Levandowski's reliance on the attorney declarations is unpersuasive for the reasons stated in the Court's prior Order. (Dkt. No. 566 at 20.) In particular, Mr. Levandowski's counsel's assertion that Levandowski cooperated with Stroz to evaluate legal risks is contradicted by counsel's own letters to Stroz which do not reference any such purpose. Further, Levandowski has never explained why he would need to meet alone with Stroz-an agent for Uber-in order to obtain legal advice from his attorney on litigation risk. He would not. He needed to give an interview to Stroz, unencumbered by legal counsel, because Uber insisted on such a process as part of its pre-signing due diligence and to create a record that would govern indemnification rights should the parties execute the Put Call Agreement.

         In sum, Levandowski has not met his burden of showing that his statements to Stroz or his production of documents or devices to Stroz are protected by an attorney-client privilege. It follows, then, that an order compelling Stroz to produce these materials does not violate Levandowski's Fifth Amendment privilege against compelled self-incrimination. See Johnson v. United States, 228 U.S. 457, 458 (1913) (“A party is privileged from producing the evidence, but not from its production.”).

         Levandowski's belated reliance on Couch v. United States, 409 U.S. 322 (1973) is unhelpful. There the Supreme Court held that a subpoena that demands production of records from a third party does not violate an individual's Fifth Amendment privilege. Id. at 328-29, 333-34. While the Court did note that “situations may well arise where constructive possession is so clear . . . as to leave the personal compulsions upon the accused substantially intact, ” id. at 333, Levandowski cites no case where such circumstances have actually been found. The Court declines to find them where, as here, the party claiming the Fifth Amendment privilege provided the statements and documents to an unrelated party on the other side of a proposed acquisition to enable the unrelated party to decide whether to agree to the acquisition and to create an evidentiary record to govern indemnification rights if a certain agreement is executed. See In re Grand Jury Subpoena (Maltby), 800 F.2d 981, 984 (9th ...


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