Nice Try: Federal Circuit Denies Uber Engineer’s Writ, Affirming the District Court

In trade secret cases, it is often the case that a defendant company and employee accused of trade secret misappropriation enter into a joint defense agreement.  Often under such JDAs, facts, strategies and documents are shared with the understanding that they will remain confidential.

A recent case, Waymo v. Uber, presents an interesting twist on JDAs and how privilege logs are to be addressed in light of them.  As we previously reported, Waymo’s former engineer Anthony Levandowski asserted his Fifth Amendment rights and asked the Federal Circuit to reverse Judge Alsup’s order requiring Uber to log information on a privilege log about the mysterious due diligence report.  Judge Alsup’s ruling rested on four primary reasons:

  1. While Levandowski claimed he transferred potentially incriminating documents to Uber’s counsel expressly in contemplation of potential investigations and litigation relating to the proposed acquisition of Otto (i.e. he believed the transfer was protected under the JDA), the court noted that Levandowski failed to submit supporting evidence.
  2. The JDA did not obligate Uber to avoid incriminating Levandowski. Even if it did, the court did not find that compelling Uber to complete a privilege log would violate Levandowski’s Fifth Amendment right.  Levandowski would not be compelled to incriminate himself and, to the extent the privilege log information is testimonial, Uber would be testifying, not Levandowski.
  3. The court further explained that it is not the Fifth Amendment which prevents an attorney from producing a client’s potentially incriminating documents – it is the attorney-client privilege. But the privilege log does not implicate the attorney-client privilege created by the JDA because the identity of the third party who prepared the report is a fact known to Uber, not a communication between Levandowski and Uber’s attorneys.
  4. Finally, the court noted that any provision in a JDA purporting to constrain parties from supplying a privilege log “might well be void as against public policy as an obstruction of justice,” as the very purpose of producing a privilege log is to test a claim of privilege.

The Federal Circuit previously stayed Judge Alsup’s order pending its review, but the stay is now dissolved in light of its rejection of Levandowski’s pleas.  The Federal Circuit was not persuaded that Judge Alsup erred in his ruling and held that Levandowski “failed to establish that he has a ‘clear and undisputable’ right to an issuance of a writ of mandamus.”

So, the due diligence report must appear on a privilege log.  What remains to be decided is whether it should be produced.  Waymo’s motion to compel production is due on May 1, and the Court has ordered Uber to produce the full report for in camera review by May 8.

In addition to fighting over this due diligence report, Waymo and Uber recently argued before Judge Alsup about whether the trade secret claims should be in arbitration.  Levandowski also stepped down from any Uber LiDAR projects, perhaps in anticipation of the showdown over the preliminary injunction coming up on May 3.  This case continues to be a wild and bumpy ride, but for now, this case serves as a cautionary note regarding the scope of protections that JDAs afford to their signatories.