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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 DENYING MOTIONS FOR RELIEF FROM JUDGE CORLEY'S NONDISPOSITIVE PRETRIAL ORDER RE DUE DILIGENCE REPORT

          WILLIAM ALSUP UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         The magistrate judge overseeing discovery in this action granted plaintiff's motion to compel and ordered production of a due diligence report previously withheld under claims of privilege. Defendants and a non-party move for relief from the order pursuant to Civil Local Rule 72. The motions are Denied.

         STATEMENT

         The due diligence report by forensics firm Stroz Friedberg at the heart of this dispute first came to light during a non-public conference on March 29, when counsel for all defendants - Uber Technologies, Inc., Ottomotto LLC, and Otto Trucking LLC - explained that, before Uber acquired Ottomotto, “some due diligence was done.” Counsel revealed that “[a] third party prepared a report based on that due diligence, ” and that defendants intended to put the report on a privilege log (Dkt. No. 131 at 12:23-13:1). Non-party Anthony Levandowski then moved - unsuccessfully - to prevent defendants from disclosing even the basic information about the due diligence report required for privilege log purposes (Dkt. No. 147).

         After the Federal Circuit rejected Levandowski's appeal from this Court's denial of his motion, plaintiff Waymo LLC moved to compel production of the due diligence report (Dkt. No. 321). Per the discovery referral in this action, Magistrate Judge Jacqueline Corley heard and decided Waymo's motion (see Dkt. Nos. 237, 350). After full briefing (see Dkt. Nos. 369, 379, 445, 474, 524), oral argument (Dkt. No. 516), and in camera review of the due diligence report, Judge Corley issued an order setting forth detailed findings of fact and concluding that (1) the report is not protected by any attorney-client privilege, (2) Uber waived any work-product privilege over the report, and (3) Waymo has a substantial need for parts of the report such that those parts must be produced even if privileged as work product (Dkt. No. 566).[1]

         The factual background of this dispute is summarized in detail in Judge Corley's excellent order and need not be recited here. For present purposes, however, it bears repeating that, in connection with Uber's acquisition of Ottomotto, Morrison and Foerster (“MoFo”) and O'Melveny and Myers (“OMM”) represented Uber and Ottomotto, respectively. Levandowski individually retained John Gardner as his personal attorney in connection with Stroz Friedberg's due diligence investigation against him (see Id. at 4). Additionally, Stroz Friedberg's investigation of Lior Ron is at issue because Ron also previously worked at Waymo, co-founded Ottomotto with Levandowski, and participated in the alleged “common interest” or “joint defense” arrangement between defendants and Levandowski.

         Uber and Ottomotto (collectively, “Uber”) moved for relief from Judge Corley's order pursuant to Civil Local Rule 72 (Dkt. No. 575). Otto Trucking, now represented by separate counsel, also filed its own motion for the same relief (Dkt. No. 572), as did Levandowski (Dkt. No. 574). This order follows full briefing, including replies.

         ANALYSIS

         1. Standard of Review.

         Under FRCP 72, a district judge considering timely objections to a magistrate judge's nondispositive order must defer to the order unless it is “clearly erroneous or contrary to law.” Grimes v. City & Cty. of San Francisco, 951 F.2d 236, 241 (9th Cir. 1991). “The reviewing court may not simply substitute its judgment for that of the deciding court.” Ibid. (citing United States v. BNS Inc., 858 F.2d 456, 464 (9th Cir. 1988)). This order does not attempt to retread all the factual findings and legal analysis in Judge Corley's order but merely addresses key points raised in the instant motions for relief.[2]

         2. Attorney-Client Privilege.

         A. Legal Framework.

         The attorney-client privilege protects confidential disclosures made by a client to an attorney in order to obtain legal advice, as well as an attorney's advice in response to such disclosures. Because it impedes full and free discovery of the truth, the attorney-client privilege is strictly construed, and the party asserting the privilege bears the burden of proving each essential element. United States v. Ruehle, 583 F.3d 600, 607-08 (9th Cir. 2009) (citations and quotations omitted). The privilege may extend to communications with third parties who have been engaged to assist the attorney in providing legal advice. United States v. Richey, 632 F.3d 559, 566 (9th Cir. 2011). Voluntary disclosure of the contents of a privileged communication waives the privilege as to all other communications on the same subject. Ibid. (citing Weil v. Inv./Indicators, Research & Mgmt., Inc., 647 F.2d 18, 24 (9th Cir. 1981)). There is, however, a “common interest” or “joint defense” exception to ordinary waiver principles where two or more parties “make the communication in pursuit of a joint strategy in accordance with some form of agreement.” See, e.g., In re Pac. Pictures Corp., 679 F.3d 1121, 1129 (9th Cir. 2012) (citing Cont'l Oil Co. v. United States, 330 F.2d 347, 350 (9th Cir. 1964)).

         B. Uber's Objections.

         Judge Corley held that Uber has no attorney-client privilege over the contents of the due diligence report (Dkt. No. 566 at 10-11). Uber objects to her order on the basis that the report “reflects information communicated in confidence to an agent of OMM and MoFo, at the direction of OMM and MoFo, for the purpose of obtaining legal advice from OMM and MoFo” (Dkt. No. 575 at 4-5). Uber's objection conspicuously omits who the “client” seeking to obtain legal advice is supposed to be in its attorney-client privilege theory. The “information communicated in confidence” ostensibly refers to interviews given by Levandowski and Ron to Stroz Friedberg during the course of its due diligence investigation. But Judge Corley correctly found that “MoFo and OMM were not Levandowski's attorneys” (Dkt. No. 566 at 10). For example, the engagement letter cited in Uber's motion expressly stated that MoFo and OMM represented Uber and Ottomotto, respectively (see Dkt. No. 370-3). And counsel from MoFo declared that the purpose of Stroz Friedberg's investigation “was to aid MoFo and OMM in providing legal advice to their respective clients” (Dkt. No. 370 ¶ 9 (emphasis added)).

         In other words, Uber's theory is not that Levandowski, as a client of MoFo and OMM, communicated in confidence to Stroz Friedberg so that he could obtain legal advice from MoFo and OMM. Nor is it that the due diligence report reflects any information communicated in confidence to Stroz Friedberg by Uber or Ottomotto for the purpose of obtaining legal advice from their attorneys. Instead, Uber's carefully-worded objection suggests the remarkable proposition that information communicated in confidence by anyone to Stroz Friedberg for the purpose of enabling Uber and Ottomotto to obtain legal advice from MoFo and OMM should be covered by the attorney-client privilege. That suggestion has no basis in the law.

         Uber further argues that its “common legal interest” and “joint defense privilege” with Ottomotto, Levandowski, and Ron preserved its attorney-client privilege. But “[t]he joint defense and common interest doctrines are not privileges in and of themselves. Rather, they constitute exceptions to the rule on waiver where communications are disclosed to third parties.” See Nidec Corp. v. Victor Co. of Japan, 249 F.R.D. 575, 578 (N.D. Cal. 2007) (Judge Edward Chen); see also Pac. Pictures, 679 F.3d at 1129 (“Rather than a separate privilege, the ‘common interest' or ‘joint defense' rule is an exception to ordinary waiver rules designed to allow attorneys for different clients pursuing a common legal strategy to communicate with each other.”). Uber's argument is thus unresponsive to Judge Corley's decision that it had no attorney-client privilege over the contents of the due diligence report in the first ...


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