March 31, 2017 / 7:33 PM / 10 months ago

Judge on unsealing in Uber v. Waymo: Expect bad headlines

(Reuters) - The last thing the ride-sharing company Uber wanted, as the company tries to defend itself against Waymo’s accusations that it obtained trade secrets when it hired a former Waymo engineer, was a headline revealing that the engineer plans to assert his Fifth Amendment right against self-incrimination if he’s called to testify in Waymo’s case.

At a closed-door hearing Thursday in U.S. District Judge William Alsup of San Francisco’s chambers, Uber lawyer Arturo Gonzalez of Morrison & Foerster told the judge Uber counsel had asked for a secret session “because of the adverse impact that we think it would have on our client if there’s a headline tomorrow.”

That turned out to be exactly the wrong thing to say to Judge Alsup, who informed Gonzalez, as well as Waymo lawyers from Quinn Emanuel Urquhart & Sullivan, that he would make the entire transcript of the closed-door hearing public. (My Reuters colleague, Dan Levine, obtained an early version of it.) Alsup also warned Uber and Waymo that he’s not going to put up with requests for secrecy just to save them from headlines they’d rather not see.

“There’s going to be a lot of adverse headlines in this case on both sides,” Judge Alsup said. That’s what happens, he said, when companies go to court. “The public has a right to see what we do. And I feel that so strongly,” Alsup said. “The U.S. District Court is not a wholly owned subsidiary of Quinn Emanuel or Morrison & Foerster or these two big companies. We belong to the public.”

The headlines today did indeed reveal what happened at Thursday’s hearing. Reuters reported that Judge Alsup said he may grant Waymo’s motion for a preliminary injunction if the Uber engineer refuses to testify about why, according to Waymo, he took 14,000 confidential files with him when he left Waymo. The New York Times offered the very headline Uber’s lawyers said they feared: “Uber Executive Invokes Fifth Amendment, Seeking to Avoid Potential Charges.”

As a result, if you are investor in Uber or in Waymo’s parent, Alphabet, or if you’re a local government official thinking about whether to allow Uber service in your town or if you’re a customer of Uber or Google or even if you’re just someone who’s interested in this case, you now know that Uber is facing a serious strategic problem in its defense against Waymo’s claims. You know Waymo has a decent shot at blocking Uber from using any purportedly stolen technology while the case is being litigated. You know that the engineer accused of bringing Waymo files to Uber, Anthony Levandowski, has hired his own lawyers and may not provide Uber the testimony it wants from him.

All of that is important information. And all of it, as Judge Alsup said, deserves to be public. Levandowski’s prospective invocation of his Fifth Amendment rights is not secret technology or proprietary data. It’s just something Uber didn’t want you to know. For too many federal judges, that’s reason enough to deprive you of access. But not for Judge Alsup, a true believer in the public’s right to know what’s happening in the courts their tax dollars pay for.

Uber took the brunt of the judge’s criticism Thursday because it had requested the closed hearing. The judge was not at all happy that Uber and Levandowski chose to present a touchy issue - how to produce documents in response to a previous order from Judge Alsup without compromising Levandowski’s Fifth Amendment rights – in a last-minute meeting in chambers, rather than through formal briefing.

“Trying to get special pleading because you represent somebody big and get an under-seal hearing so the public can’t hear it - that’s not going to work,” the judge said. “If you want to make a formal motion, you can make it.”

But Judge Alsup also called out Waymo, which, according to Uber, demanded broad redactions in an Uber motion to compel arbitration of Waymo’s trade secrets and California unfair business practices claims. Uber has since filed an unredacted version of its arbitration brief, which disclosed that Waymo has been engaged since October in arbitration with Levandowski over the thousands of documents the engineer supposedly stole from Waymo.

Judge Alsup said that Waymo should have told him it was arbitrating with Levandowski. He also said the company should not have insisted its employment agreements with Levandowski be kept secret. “If we’re going to be in a public proceeding, 99 percent of (it) - 90 percent anyway - has got to be public,” he said. “This employment agreement by Google, it’s laughable that you want to keep that under wraps. Just laughable.” (Waymo lawyer Charles Verhoeven of Quinn Emanuel told the judge his firm had not asked for redaction of the agreement.)

The judge said at the hearing that he expects to decide next month whether to grant Uber’s motion to compel arbitration of Waymo’s trade secrets claims against the company, in advance of a May 4 hearing on Waymo’s preliminary injunction motion.

If he agrees with Uber that arbitration provisions in Levandowski’s old employment contracts with Google require arbitration of most of Waymo’s case against Uber, all of Judge Alsup’s exhortations about the public’s right to know will be for naught. As the judge himself said at Thursday’s hearing, arbitration is confidential.

I, for one, am hoping Judge Alsup keeps that in mind when he decides where this case should be heard.

The views expressed in this article are not those of Reuters News.

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