Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

WAYMO LLC v. Uber Technologies, Inc.

United States District Court, N.D. California

November 2, 2017

WAYMO LLC, Plaintiff,
v.
UBER TECHNOLOGIES, INC.; OTTOMOTTO LLC; and OTTO TRUCKING LLC, Defendants.

          ORDER EXCLUDING MICHAEL WAGNER, RESTRICTING USE OF FINANCIAL EVIDENCE AT TRIAL, AND DENYING OTHER RELIEF (UNDER SEAL)

          WILLIAM ALSUP, UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         In this action for trade secret misappropriation, defendants move to strike plaintiff's initial disclosures and to preclude its damages claims and certain witnesses. Defendants also move to exclude plaintiff's damages expert, and to exclude evidence of certain financial information pertinent to plaintiff's damages theory. Defendants' motion to exclude Michael Wagner is Granted. Their motion to exclude evidence of financial information is Granted in part and Denied in part as stated herein. Except to the extent stated herein, their motion to strike is Denied.

         STATEMENT

         The factual and procedural background of this action has been detailed in prior orders and need not be repeated here. In July of this year, defendants Uber Technologies, Inc., Ottomotto LLC (collectively, “Uber”), and Otto Trucking LLC moved to strike plaintiff Waymo LLC's initial disclosures and to preclude its damages claims and certain witnesses (Dkt. Nos. 797, 942). A prior order held those motions in abeyance pending evaluation of Waymo's eventual damages theory (see Dkt. No. 1261 at 78:6-14).[1]

         After discovery closed and the parties disclosed expert reports, defendants moved to exclude the testimony and opinions of Waymo's hired damages expert Michael Wagner (Dkt. Nos. 1614-4, 1653). Wagner is not an economist but merely an inactive certified public accountant and inactive California-licensed attorney. He currently works as managing director at LitiNomics, Inc., “a financial and economic consulting firm specializing in the analysis of economic issues that arise in commercial disputes.” He claims to have “specialized in the computation of commercial damages over the last 40 years of [his] professional career” (Dkt. No. 1615 ¶¶ 3-5). Defendants also moved in limine to exclude evidence of certain financial information pertinent to Waymo's damages theory (Dkt. No. 1557-4). Both motions were heard at the first final pretrial conference on September 27.

         While those motions hung fire, Waymo voluntarily dismissed its patent claims (Dkt. Nos. 841, 1593) and another order granted summary judgment of no liability in favor of Otto Trucking (Dkt. No. 2151). Insofar as it pertains to Waymo's patent claims, Uber's motion to strike (Dkt. No. 797) has therefore been mooted. Otto Trucking's separate motion to strike (Dkt. No. 942) has also been mooted. The issues remaining for adjudication pertain only to Waymo's damages theory against Uber for alleged trade secret misappropriation. With the full benefit of multiple rounds of briefing and hearing, this order now resolves those issues.

         ANALYSIS

         1. Motion to Exclude Michael Wagner.

         “A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if: (a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; (b) the testimony is based on sufficient facts or data; (c) the testimony is the product of reliable principles and methods; and (d) the expert has reliably applied the principles and methods to the facts of the case.” Fed.R.Evid. 702; see Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 592-94 (1993). District courts have a “gatekeeping role” to ensure that expert testimony admitted into evidence is both reliable and relevant, and to exclude “junk science.” Messick v. Novartis Pharms. Corp., 747 F.3d 1193, 1197 (9th Cir. 2014); Sundance, Inc. v. DeMonte Fabricating Ltd., 550 F.3d 1356, 1360 (Fed. Cir. 2008).

         Wagner offered opinions labeled as both unjust enrichment and reasonable royalty. Other than grade-school arithmetic, however, he did not apply any coherent principle, methodology, theory, or technique, much less one possessing any discernible indicia of reliability. Instead, he made the same arguments that the lawyers can make based on other evidence in the case that can speak for itself. As this order now explains, Wagner's opinions will be excluded both because they do not qualify as expert testimony under FRE 702 and because they are substantially more prejudicial than probative under FRE 403.

         A. Unjust Enrichment.

         Wagner opined that, as to eight of the nine asserted trade secrets Waymo selected for trial, Uber's alleged unjust enrichment could be measured in terms of either incremental future profits or saved development costs as a result of accelerated autonomous-vehicle development. As to asserted trade secret number 90, he took a different approach, as explained below. He also described a host of “other ways in which Defendants have been unjustly enriched that [he was] unable to quantify” (see Dkt. No. 1615 ¶¶ 264-65).[2]

         1. Incremental Future Profits.

         To quantify incremental future profits from accelerated autonomous-vehicle development, Wagner relied on an internal presentation slide that had been created by Uber executive Nina Qi prior to the Ottomotto acquisition to summarize her analysis of how the acquisition could potentially benefit Uber. The Qi slide estimated that the entire Ottomotto acquisition could potentially accelerate Uber's autonomous-vehicle development timeline by one to two years. Based on this estimated acceleration and Uber's own internal “Rubicon” business model, the Qi slide estimated that the present value of incremental future profits to Uber as a result of the Ottomotto acquisition ranged from $836 million (one year) to $1.69 billion (two years) given a “baseline” assumption (thirteen cities covered by 2022), and from $1.585 billion (one year) to $2.61 billion (two years) given an “optimistic” assumption (thirty cities covered by 2022) (id. ¶¶ 271-81).

         The Qi slide will come into evidence and Waymo can try to hold Uber to those sky-high numbers. But Waymo seeks to transmogrify this slide into proof that a single trade secret alone should top out at the highest number in the slide. This is a fantastic leap. Here is a summary of how Wagner made it.

         Assuming that the Qi slide reliably estimated incremental future profits based on accelerated autonomous-vehicle development, Wagner then purported to estimate how much time Uber had allegedly saved by misappropriating eight of the nine asserted trade secrets Waymo had selected for trial. He had no independent opinion about this. Instead, he relied on the opinion of Lambertus Hesselink, another Waymo-hired expert, that Uber had saved two years just by misappropriating asserted trade secret number 25 and one year just by misappropriating asserted trade secret number 111. For asserted trade secret numbers 9, 96, 2, 13, 14, and 7, Wagner cherry-picked from Uber's interrogatory responses, which estimated how long it would take an independent contractor to redesign the accused features in its LiDAR system. Wagner claimed those estimates represented the amounts of time by which each asserted trade secret accelerated Uber's entire autonomous-vehicle development timeline, despite Uber's clarification in the very same interrogatory responses that its redesign estimates “would not significantly or materially impact” its overall development timeline. For asserted trade secret number 90, Wagner took a different approach, as explained below (see Id. ¶ 284, Dkt. No. 1786-3 at 46:18-47:15).

         Wagner then simply multiplied the dollar amounts from the Qi slide with the units of saved time taken from other evidence in the case to arrive at his unjust enrichment conclusion, as quoted now from his report (Dkt. No. 1615 ¶ 285):

         Figure 10: PV of Incremental Profit for Accelerated AV Development, by trade secret (Baseline Coverage)618

         [IMAGE OMMITTED]

         Figure 11: PV of Incremental Profit for Accelerated AV Development, by ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.