Case of the Day: Waymo LLC v. Uber Techs., 2017 U.S. Dist. LEXIS 88411 (N.D. Cal. June 8, 2017)

Summary:

Plaintiff Waymo sued Uber for stealing intellectual property regarding driverless vehicle technology. Specifically, plaintiff claimed that a former Waymo employee took confidential documents from Waymo and founded his own company called Ottomotto. Later, Uber acquired Ottomotto. But before the acquisition transaction closed, Uber and Ottomotto, through their attorneys, jointly retained an outside expert to interview Ottomotto employees who previously worked for Waymo as a part of due diligence. Plaintiff Waymo moved to compel production of the report produced by the outside expert.

The court granted the motion. The court first found that individual employees at Ottomotto had no attorney-client privilege with the expert, as the expert was retained by the corporations Uber and Ottomotto and not directly by individuals. The court also found Uber had no attorney-client privilege, as Uber and Ottomotto were on opposite sides of a transaction. Further, the common interest between Uber and Ottomotto did not create an attorney-client privilege, as common interest/joint defense doctrine is not an independent source of privilege.

Takeaway:

Admittedly, this case does not have much to do with Asia. (I'm sure both Waymo and Uber both have a lot of Asian shareholders, however.) But you don't see a case like this every day--the perfect sample of a common situation, an ideal archetype that belongs in a case book.

If you're a white collar defense practitioner (like I am,) or an M&A/deals attorney, you would read this case very closely and commit the holding to memory. It is extremely common for a successor firm to be sued for the (alleged) sins of the firm that it acquired--which means managing attorney-client privilege throughout the deal structuring is critical. It is also extremely common for two companies to jointly engage a single expert to investigate a potentially problematic transaction that involved both firms, and destroy the attorney client privilege in the process. This case could have had a different result if Uber's deal counsel anticipated litigation and retained the expert on its own, rather than jointly with Ottomotto.