Uber headquarters. Photo credit: Jason Doiy/ALM

Uber's legal department is looking worse and worse as more information surfaces about an in-house lawyer's handling of a potentially critical document in the ride-hailing company's epic trade secrets battle with Waymo.

In a report released Friday afternoon, special master in the case, John Cooper, slammed San Francisco-based Uber, which he said had been obligated to produce an inflammatory letter from ex-employee Richard Jacobs' lawyer to Uber deputy GC Angela Padilla in earlier requests for evidence.

“It is not easy, in abstract, to determine where the line regarding the scope of discovery search should be drawn,” Cooper wrote. “But this is not a case involving mere possession of some document. The facts in this case suggest Ms. Padilla knew of the Jacobs letter at the time Uber had to respond to discovery requests calling for its production—it certainly was 'reasonably accessible.'”

Uber representatives didn't immediately respond to requests for comment on the special master's report.

Cooper's report states the letter should have been produced during discovery requests which were served to Uber on May 9, 2017. Padilla received the letter on May 5.

Uber's legal team, outside counsel from Morrison & Foerster led by Arturo Gonzalez, had argued in pretrial hearings that the May 5 letter from lawyer Clayton Halunen hadn't been produced earlier because its contents and date range were outside the search terms set by Waymo. Gonzalez also said Padilla hadn't been one of the agreed-upon search custodians, so her emails fell out of the scope of discovery.

But Cooper states in his report there are “two main reasons why an exclusive focus on the use of search terms is inappropriate for determining whether the Jacobs letter should have been produced.” The first is that Uber and Waymo never agreed to limit their search to documents that included the search terms.

The second is that search terms weren't necessary to find the letter sent from Jacobs' lawyer to Padilla, one of the highest ranking lawyers at Uber, a letter that resulted in a $7.5 million settlement and was discussed with then-GC Salle Yoo and then-CEO Travis Kalanick.

Jacobs' resignation email, which was sent before the May 5 letter, also sat in the inboxes of both Yoo and Kalanick, Cooper points out. The email holds similar allegations to the letter, but with less detail. Kalanick was a custodian whose emails fell under the search terms.

Cooper stated in the report that search terms are only necessary when trying to find a needle in a haystack.

But “this needle was in Uber's hands the whole time,” he wrote.

The Jacobs letter, which alleges that Uber spied on competitors, bragged about stealing Waymo trade secrets and used ephemeral messaging to delete the evidence, was “not stowed away in a large volume of data on some server,” Cooper wrote. “They [Jacobs' letter and resignation email] were not stashed in some low-level employee's files.”

Cooper goes on to specifically call out Padilla, who testified on Nov. 29 that she passed the Jacobs letter on to Joe Spiegler and Sidney Majalya, lawyers on Uber's in-house compliance team, upon receiving it via email. Padilla said she didn't give the letter to in-house or outside counsel involved in the Waymo case because Spiegler and Majalya told her it would obstruct an internal investigation of its allegations made by Jacobs.

She testified in November that she also didn't pass the email and its allegations along because she believed it would eventually turn up in Waymo's search terms regardless.

Padilla has previously stated Uber's failure to produce the Jacobs' letter earlier was not a cover-up, as she voluntarily submitted the document to the Northern District of California U.S. attorney.

In a rare move, the U.S. attorney sent the evidentiary document along to U.S. District Judge William Alsup of the Northern District of California, who is overseeing the Waymo case. Alsup said that was the first time such a transmission of evidence has happened in this court, and implied that Padilla was attempting to hide the information by sending it to the AG rather than the parties involved in the Waymo case.

It's a claim Padilla has denied.

The full text of the Jacobs letter, though read in part by both Uber and Waymo's legal teams during pretrial hearings in November, was unsealed late Friday afternoon.

The trial, originally scheduled to begin in October, has been delayed by Alsup, who has been highly critical of Uber's handling of the Jacobs letter throughout ongoing pretrial hearings in the case. Alsup asked Cooper to draw up Friday's report following the last pretrial hearing in the case.