Tuesday, October 2, 2018
Judge’s Reversal of Arbitrator’s Discovery Order Was Appealable as a ‘Final Judgment’—C.A.
By a MetNews Staff Writer
An order by a judge vacating an arbitration panel’s decision that Uber provide third-party discovery to Google, was appealable as a “final judgment” because it resolved the rights of the two companies in the matter, the First District Court of Appeal has held.
The opinion, filed Friday, was written by Presiding Justice Peter J. Siggins of Div. Three. It reverses San Francisco Superior Court Judge Harold E. Kahn’s finding that the documents sought by Google are privileged.
The arbitration arose after Uber’s 2016 purchase of Ottomotto LLC (“Otto”), a self-driving truck startup created by Anthony Levandowski and Lior Ron after the two left Google. Google claimed the two had violated their non-competition agreements by creating the company.
Siggins framed the question as a novel one, declaring:
“We know of no case that addresses the precise issue before us, namely, whether a party to an arbitration has a right to appeal an adverse superior court order vacating an arbitrator’s discovery order in favor of a third party to the arbitration.”
As part of the purchase agreement for Otto, Uber agreed to indemnify Levandowski and Ron against Google’s contract claims. Attorneys for Otto and Uber retained the services of investigative firm Stroz Friedberg LLC (“Stroz”), which conducted a due-diligence investigation and prepared documents concerning the purchase.
After Google commenced arbitration against the two men, it served a subpoena on Uber for the Stroz documents, but Uber objected on attorney-client privilege and attorney work product grounds. The chair of the arbitration panel disagreed with Uber’s contentions and ordered the documents produced, which order was affirmed on appeal by the full arbitration panel.
(While the arbitration was pending, Google company’s Waymo LLC brought an action against Uber in the U.S. District Court for the Northern District of California, in which Levandowski intervened. In September 2017, the Ninth U.S. Circuit Court of Appeals affirmed District Court’s determination that the documents were not privileged, and Uber produced them the following month.)
Uber petitioned for the arbitration order to be vacated; Kahn granted the petition; Google appealed from Kahn’s order.
One Final Judgment
“On this issue,” Siggins explained, “we conclude such a right of direct appeal exists based on the one final judgment rule.”
The “one final judgment rule” holds that only a final judgment is appealable. Code of Civil Procedure §577 defines a judgment as “the final determination of the rights of the parties in an action or proceeding.”
The jurist continued:
“Here, the Discovery Order was the final resolution of the special proceeding initiated by Uber for the sole purpose of vacating the arbitration panel’s order compelling Uber to produce the Stroz Materials. The superior court’s order resolved the dispute between Uber and Google with finality. In vacating the arbitration panel’s award, the court’s order relieved Uber of any obligation to produce the Stroz Materials in the underlying arbitration and conclusively determined Uber’s obligations to Google. There was nothing left for the superior court to determine as between Uber and Google, and the Order disposed of all issues between them in the special proceeding. Since the Order was ‘the final determination of the rights of the parties’ (§ 577), it is appealable.”
On the merits of the appeal, Siggins agreed with the arbitration panel and the Ninth Circuit that the Stroz reports are not subject to attorney-client privilege. He wrote:
“Uber never established the Stroz Materials were attorney-client communications nor could it. The Stroz Materials resulted from a pre-acquisition due diligence process Uber’s and Otto’s attorneys jointly hired Stroz to perform. Both Levandowski and Ron had separate personal counsel who never retained Stroz. Uber and Otto attorneys directed Stroz’s efforts, not the personal attorneys for Levandowski or Ron. Moreover, at the time Stroz performed its due diligence, the interests of Uber were adverse to those of Otto, Levandowski and Ron.”
He pointed out that Levandowski’s and Ron’s attorneys had established limits as to what information could be shared by the two men, with Ron’s attorney going so far as to prohibit Stroz from sharing any privileged information with Otto or Uber.
The justice noted that the Stroz documents were the result of a factual investigation and “do not reflect an attorney’s impressions, conclusions, opinions, or legal research or theories” and are therefore not covered by C.C.P. §2018.030(a)’s absolute prohibition against disclosure of such work product.
“Substantial evidence in the record supports a conclusion that denial of discovery will unfairly prejudice Google in preparing its claims,” he continued. Because of this, he said, the arbitration panel’s decision that the exception to the general non-discoverability rule found in C.C.P. §2018.030(b) applies to the documents was proper.
The case is Uber Technologies, Inc. v. Google LLC, 2018 S.O.S. 4818.
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