Pando

"Nobody is hiding at Uber": Dispatches from the Waymo vs Uber courtroom

By Dan Raile , written on May 9, 2017

From The Travis Shrugged Desk

"The only way to run a railroad like this is the American way, put a jury in the box over there to decide and I'll just sit here and watch."

SAN FRANCISCO: This past Thursday, Judge William Alsup addressed a packed courtroom on the 19th floor of the Philip Burton Federal Building.

His allusion to the railroads both belied and foreshadowed the complexity of what is to follow: Silicon Valley’s long awaited Rumble in the Jungle. A battle between two massive consumer cryptomonopolies – the railroad companies of their day; one a highly-leveraged taxi cab syndicate that prefers to be thought of as a software company, the other a gargantuan advertising company that prefers to be thought of as the guardian of contemporary human freedom. The case represents the struggle between these two competitors to provide the furnishings of the lives of the Jetson family, specifically the race to bring to market cars that drive themselves, which is considered an important intermediary step to becoming the Henry Ford of flying cars. 

You likely already know the bare facts that led to the case between Google-cum-Waymo and Uber. Even the parties themselves broadly agree on those.  Certainly no one is disputing that Anthony Levandowski did a bad, bad thing. While working at Google-cum-Waymo in December 2015, he searched the company’s internal servers for sensitive documents, installed software to conceal these actions (fail!) and transferred 9.7 gigabytes of Google IP to an external hard-drive. A month later he left Google to start a company that Uber bought sixth months later for the better part of a billion dollars. As Alsup told Waymo’s avuncular lead attorney Charles Verhoeven, “It is overwhelmingly clear that the download happened. You have one of the strongest records I’ve seen of someone doing something bad. So good for you.”

The nut, though, is what role – if any – Uber and Uber’s upper management including CEO Travis Kalanick played in the skullduggery. Depending on what is ultimately revealed in court, the answer to that question could be enough to scupper Uber’s self-driving car ambitions (and maybe, at a stretch, Uber itself.) It might also be a much-needed referendum on the move-fast-and-break-things culture that, to date, Silicon Valley investors have been willing to encourage or at least tacitly support.

Although any actual trial isn’t excepted until at least October – Thursday’s hearing was to determine if Uber should be forced to shut down parts of its self driving car program, immediately, ahead of trial - Judge Alsup took the opportunity to have a crack at the nut.

Did Uber know or encourage Levandowski’s pilfering? And, if not, why is Uber so determined to keep due diligence evidence – which would surely exonerate them – out of court. Uber has argued that a tranche of 3,500 documents stemming from communications with Levandowski in the months leading up to its acquisition of Otto were sent via attorneys and so are protected by legal privilege. Levandowski has himself pled the fifth, limiting how much of his own testimony and evidence can be presented to the court.

Alsup sketched their argument:

“So at some point Uber realized in due diligence that Anthony Levandowski was radioactive and they came up with a series of agreements and positive actions to insulate themselves. But they aren’t disclosing what those actions were because they are claiming that it is privileged. Still there is a small chance, but some chance, that that is what happened,” he said. He noted it was strange that Uber would refrain from producing exculpatory evidence, deeming it “a Catch 22.” 

In other words, it’s possible that Uber knew nothing of Levandowski’s pilfering. Or perhaps, at some point in its due diligence review of the Otto acquisition, Uber realized what Levandowski had done and said, “Anthony, we don’t go in for that kind of thing here at Uber,” demanded all copies of those files he’d stolen and dropped them, via Uber helicopter, into an active volcano.

Here’s what we do know: During the time that he was stealing Google’s secrets and abruptly leaving with them, Levandowski was meeting and communicating with Uber’s self-driving car people. Deliverables and dollar amounts were discussed, but as for specifics, the court and the public are in the dark. This because Uber has claimed that all of those communications are protected by attorney-client privilege, because they were conducted in “anticipation of litigation.”  

Uber’s lead attorney Arturo Gonzalez, aptly of the firm Morrison Foerster (colloquially, MoFo), insisted that he was “tempted to answer” whether the documents show Uber knowingly participated in Levandowski’s scheme, but that his hands were tied by the rules of attorney-client protections. 

“If we can stipulate that I’m not waiving privilege, I will answer. We aren’t hiding anything,” Gonzalez said. 

So clean are Uber’s hands, Gonzalez argued, that the court could even depose Travis Kalanick, under oath. “We’ll produce our CEO for deposition. Nobody is hiding at Uber. They can talk to our people,” he said.  

Thursday’s hearing circled round and round on the problem of privileged documents and Levandowski’s unwillingness to talk:

Arturo Gonzalez: …There is no evidence that today Waymo’s files are in [Anthony Levandowski’s] possession.

Alsup: But how can you say that? There is no evidence that he did anything but keep them. No you are asking for the impossible. It’s unreasonable.

Gonzalez: It was a year and a half ago…

Alsup: But…how would they know that? By deposing his roommate? Only Anthony Levandowski would know.

Gonzalez: It could be in emails on servers if he was doing Uber work

Alsup: But you won’t turn his laptop over, his personal laptop. The search was blocked by the Fifth Amendment.

Gonzalez: All his emails and google drive docs have been forensically examined, his Uber laptop…they have yet to show we acquired trade secrets with knowledge.

Alsup: But that is because you have asserted privilege.

Gonzalez: But no privilege keeps them from questioning our people. And so far they have found only one inadvertent document…

Alsup: But that doesn’t come to grips with the fact of the 35 hundred emails you are withholding, perhaps properly. That to me is the treasure trove that would determine what happened in this case. It is a priority to me to find out whether this privilege has been properly asserted. 

And on and on. A magistrate judge will soon determine whether this is a legitimate claim or another instance of Uber asserting privileges to which it is not entitled. 

In the meantime, the case continues to rumble towards trial. Any day now, Judge Alsup will decide whether to grant the preliminary injunction motion that would force Uber to cease using the parts of its self-driving cars that violate Google’s asserted trade secrets. He’ll also rule on Uber’s motion, heard the week before, to move the proceedings into private arbitration.

Judge Alsup has pointed out the irony of Google hoping to keep the case out of arbitration, while forcing its employees to sign iron-clad arbitration contracts:

“Wouldn’t it be poetic justice? [According to his employment agreement with Google], if Mr. Levandowski had a claim against anyone he would have had to arbitrate….Here’s what happens with these big companies and I hope there are some here to take this to heart: They want to stick everyone in arbitration in the broadest way, but when it looks like they might get stuck in arbitration themselves they interpret [the clauses] differently.”

Also limbering up their minds and fingers, and hoping against arbitration, are Silicon Valley’s press corps. Like most people whose lives have been touched by the internet, tech reporters are not often encouraged to discern between two well-crafted moral narratives each allotted equal time. But every so often a court case comes along where the glamor of computer code is forced to yield before the archaic but potent codes of the law, in full view of eyes that have been cultivated to see that smartphones literally changed everything.

The pre-trial hearings have enjoyed a full complement of press in attendance. As the parties present arguments, reporters throughout the viewing section compete to determine who can clatter their laptop’s keys most urgently while simultaneously tweeting, holding Slack conversations, checking their phones, transcribing the proceedings and weighing the merits of the arguments. 

You can therefore read an awful lot about what happens at the court just by searching Twitter. Of Thursday’s hearing, you’ll gather something of the food services offered at the federal building and of the interruption over the intercom of an announcement to shelter in place because of security concerns stemming from a police-involved-shooting on the streets outside. You won’t hear much, though, about the real backchanneling: The PR flacks on both sides, stalking the halls, identifying the key reporters and planting the first seeds of narrative.

Six months from now those seeds with likely bear fruit:  Uber, once cast as Robin Hood, has now been designated as the sacrificial goat. When the knife makes its fatal pass, Google and its lawyers will quickly sop up all the cash that spills, and the rest of the world will hear the epic tale in minutely-tweeted verse. Longer features will follow; awards will be won.

I’ll be there too, of course, reporting for Pando on whatever scraps might be missed by my more illustrious colleagues. Stray bits of ephemera like the ubiquity of the young Waymo employee in a good suit worn over a t-shirt, who flits about smiling and adding people with significant Twitter accounts to his mailing list.  Let’s “get you down sometime” to try a self-driving car, he casually offers.

Uber’s more somber spokesman, in pink collared shirt sans jacket, has preferred to stay mostly scarce in a hall where journalists crowd together with his competitor. He intercedes when needed with even-toned statements meant to be followed by “an Uber spokesman said,” then returns to his aerie. 

After years of running roughshod over critics, Uber's PR now turns to face an unenviable task. Perhaps an impossible one. 

But the company can at least take heart that, in Silicon Valley, the pendulum between hero and villain swings with remarkable speed. Not so long ago, Google itself was on the other side of public opinion, having been found to have joined a gentleman’s agreement with Apple and others that they wouldn’t hire each other’s employees, a fact omitted from the voluminous employee contracts. Those mensches were somehow fallible enough (or audacious, or both) to leave a trail. They got sued by their employees, lost, were forced to pay. They said they were sorry the only way they knew how and then forgiveness came easy.

Those men and their successors now preside over the most valuable companies on Earth. But, they had to make a show of tearing up their secret agreement, and now look. The riff raff are poaching their brainiacs and activating double-agents in their workspaces. It’s mayhem. Judicial intervention required, Your Honor. Please, do put them in the penalty box. Let Google get on with giving the world the robot transportation the future demands. 

And then, after a while, let Uber dust itself off and find a way to help the world forget about all this unpleasantness (not to mention the countless other unpleasantnesses of which it currently stands accused) and get back to loving tech bros and their disruptive apps.

Because, sure, it’s so easy to pile on Uber. Even its name conjures uncomfortable images of leather shorts and tiny mustaches. But, dear reader, before casting your own judgment, please, think of all the investors whose shirts will be lost if Uber crashes and burns and who will then press a button on their cellphone to have another shirt delivered. Of all the drivers who would have to drive other things or find other low-paying jobs. Think of the poor third-party vendor that inadvertently tipped off Google to the possibility that Uber was using its secrets, sparking this whole case, and of all the cars that won’t drive themselves. Think of a world without Uber, or where this one case actually ended up being the moment the tide turned and an entire industry built on moving fast and breaking things actually ended up broken beyond repair.

To be continued.