The last-minute evidence quickly mounted. A letter and an email full of damning claims. Apps that sent self-destructing messages. A payment of $4.5 million to an employee who threatened to be a whistle-blower — and an additional $3 million to his lawyer.
In two days of testimony that ended Wednesday in Federal District Court in San Francisco, Uber lawyers had to defend what a federal judge has described as an effort to withhold evidence from an intellectual-theft trial. The case pits the ride-hailing company against Waymo, the self-driving car unit of Google’s parent company, Alphabet.
The judge, William Alsup, delayed the start of the trial on Tuesday — one day before jury selection was supposed to begin — after the United States attorney’s office in Northern California alerted him to the existence of the letter, written by the lawyer for a former Uber employee to one of the company’s lawyers.
On Wednesday, Judge Alsup continued to upbraid Uber’s lawyers for not being more forthcoming with evidence. “I have never seen a case where there were so many bad things done like Uber has done in this case,” he said.
The trial was rescheduled for Feb. 5, with jury selection set to begin on Jan. 31. That is nearly a year after Waymo first accused Uber of conspiring with a former Google engineer, Anthony Levandowski, to steal trade secrets. Waymo claims Mr. Levandowksi downloaded more than 14,000 files from company servers before eventually joining the self-driving effort at Uber.
The letter that caused the trial to be delayed was written by a lawyer for Richard Jacobs, a former employee in Uber’s security team, to Angela Padilla, the company’s deputy general counsel. Thirty-seven pages long, it detailed a list of questionable behavior at Uber, including spying on competitors and using special laptop computers and self-destructing messaging apps that would hide communications.
On Wednesday, Ms. Padilla testified that the letter, which has not been made public in its entirety, was “clearly extortionist” and filled with “fantastical” information.
She said Uber had planned to fire Mr. Jacobs because its security team had caught him downloading sensitive company information to his personal computer. Mr. Jacobs responded, Ms. Padilla said, by sending an email to Travis Kalanick, the company’s chief executive at the time, and others complaining of criminal and unethical behavior inside Uber.
That email to Mr. Kalanick also didn’t surface in the long evidence discovery process between Waymo and Uber lawyers, and was presented in court for the first time on Wednesday.
After Mr. Jacobs left Uber, his lawyer sent the 37-page letter to Ms. Padilla as part of settlement negotiations in May. Ms. Padilla said the company had not shared this letter with the legal team handling the Waymo case because Uber hadn’t wanted to compromise an internal investigation into its claims.
Judge Alsup said to Ms. Padilla that “on the surface, it looks like you covered this up” and tried to keep the letter out of the hands of Waymo’s lawyers.
The company did share the letter from Mr. Jacobs’s lawyer with three different United States attorney offices, because Mr. Jacobs had threatened to take his claims to federal prosecutors and Uber wanted to “take the air out of his extortionist balloon,” Ms. Padilla testified.
Nonetheless, Uber paid a $3 million settlement to the lawyer who wrote the letter in addition to the $4.5 million paid to Mr. Jacobs. As part of the deal, Mr. Jacobs was kept on as a security consultant, Ms. Padilla testified. His job: investigating the claims made in the letter his lawyer wrote.
Mr. Jacobs received $2 million up front and was to receive $1 million spread over 12 months and $1.5 million in stock, also spread out over 12 months. The deal included a so-called clawback measure that would require him to return the money if he discussed his claims with outsiders, Ms. Padilla testified. But he was allowed to talk about it with the government in the case of an investigation.
On Wednesday, two current Uber security employees denied many of the allegations in the 37-page letter and claims by Mr. Jacobs in his testimony on Tuesday. But they acknowledged that Uber employees used a so-called ephemeral messaging app called Wickr. Uber’s current chief executive, Dara Khosrowshahi, noted the company’s use of Wickr in a tweet but said Uber had stopped using it.
Judge Alsup questioned why Uber would pay so much to an employee making bogus claims. “To someone like me, an ordinary mortal, and to ordinary mortals out there in the audience — people don’t pay that kind of money for B.S.,” the judge said.
Uber’s rationale for the settlement: It would cost less to settle with him than to fight him in court. Also, Mr. Jacobs’s claims could hurt Uber’s reputation, Ms. Padilla testified.
In a statement, an Uber spokeswoman, Chelsea Kohler, said: “Today’s hearing changed nothing about the facts of Waymo’s case, and did nothing to support their claims that Uber is using their alleged trade secrets. We look forward to our day in court and are as confident in the merits of our case as ever.”
A Waymo spokesman, Johnny Luu, said in a statement: “Today’s revelations fit Uber’s pattern of destroying and withholding reams of evidence relevant to our trade secrets case, and that those at the very top of Uber were aware of these inexcusable practices. We look forward to the additional discovery granted by the court and to presenting our case in front of a jury at trial.”