Judge Alsup denies Waymo arbitration request, refers case to Uncle Sam’s legal eagles
In a California district court, Judge William Alsup yesterday denied the ride-hailing app company’s request for the case to be heard in arbitration – where the details would remain private – so the case will head to trial later this year.
But the judge also unexpectedly referred the case to the US Attorney’s Office, which could lead to criminal charges against Uber.
“The court takes no position on whether a prosecution is or is not warranted, a decision entirely up to the United States Attorney,” Alsup wrote in a separate order [PDF].
It is up to the US Attorney whether or not to take up the case, so a prosecution is far from certain. However it is a clear sign that the judge suspects that something untoward may have happened.
We don’t know what the judge’s reasoning for possible criminal prosecution is. Alsup refers the US attorney to his order agreeing to Waymo’s motion for provisional relief – in the order he granted a partial restriction on Uber’s driverless car program – for the “evidentiary record,” but he also chose to seal that order.
Waymo was, predictably, happy with the outcome. “We welcome the court’s decision, and we look forward to holding Uber responsible in court for its misconduct,” said a company spokesman.
Uber was less impressed. “It is unfortunate that Waymo will be permitted to avoid abiding by the arbitration promise it requires its employees to make,” it said in a statement. “We remain confident in our case and welcome the chance to talk about our independently developed technology in any forum.”
Neither company would comment on the criminal charges Uber may face.
Anatomy of a theft
The judge’s decision follows a hearing earlier this month in San Francisco, where Wamyo’s lawyer claimed that Uber had conspired with its former engineer, Anthony Levandowski, to steal its technology.
Levandowski left Waymo without giving notice and started up a new company called Otto that would be focused on autonomous trucks. It was later discovered he had downloaded 14,000 confidential files on Waymo’s self-driving technology without permission.
Otto was subsequently acquired by Uber for $680m – something that Wamyo’s lawyers claim was little more than a legal ruse to hide the fact that Uber had hired Levandowski the day he walked out of Waymo.
Waymo’s lawyers provided two key pieces of evidence to back up its claim: one showing that Levandowski was granted five million Uber shares – currently worth over $250m – on the day he left Waymo, January 28, 2016, rather than the day his company, Otto, was acquired.
And second, it showed the judge an internal Uber email with a deliverables attachment in which Uber’s VP of mapping, Brian McClendon, wrote: “This list of deliverables is a high bar for sure. But then again so is what [Levandowski] is asking for in $$.” Waymo’s lawyers argue this is a clear sign of collusion and a quid pro quo: money for technology. McClendon resigned his position in March.
Judge Alsup made a point during the hearing of saying that Waymo’s lawyers had proven their case against Levandowski stealing the technology, but he was notably less certain about whether Uber was complicit in the theft, suggesting that the company could be entirely innocent and simply hired a talented engineer.
The case is just the latest legal challenge to Uber, which has faced a long series of scandals, lawsuits and investigations and has been forced to acknowledge its own broken corporate culture.
Most recently, the Department of Justice expanded its probe into Uber’s “Greyball” software, which reportedly identified law enforcement officials’ phones so it could evade police detection – something that may have violated several federal laws.
And in Europe, the company also risks losing its argument that it is an internet company rather than a transport company – a classification that would force it to follow a raft of regulations. ®