Uber was banned from using information gathered by a secretive, CIA-linked research firm on the plaintiff who brought a price-fixing lawsuit, after a judge in the case reprimanded the firm for behavior that could “arguably” be called criminal conduct, according to Reuters.
Last December, Spencer Meyer filed a proposed class action lawsuit against Uber CEO Travis Kalanick, alleging a scheme to fix prices in violation of antitrust laws. The same day, Uber hired a research firm called Ergo to investigate Meyer out of concern he posed a security risk to Kalanick. But Ergo also gathered information on Meyer’s lawyer, a move that some critics say went too far.
“Engaged in fraudulent and arguably criminal conduct”
Ergo’s lawyer argued that the firm was unaware the investigation was tied to a lawsuit, even while admitting Ergo’s investigator “dissembled and used false pretenses in his duties.” In trying to dig up dirt on Meyer and his lawyer, Ergo told associates that it was seeking information about “up-and-coming researchers in environmental conservation” and “up-and-coming labor lawyers in the US."
In a ruling Monday, US District Judge Jed Rakoff said Ergo was "engaged in fraudulent and arguably criminal conduct" and that many of the documents it sought to protect "were intended to facilitate this fraudulent and arguably criminal activity.”
“It is a sad day”
But Rakoff also had harsh words for Uber. “It is a sad day when, in response to the filing of a commercial lawsuit, a corporate defendant feels compelled to hire unlicensed private investigators to conduct secret personal background investigations of both the plaintiff and his counsel,” the judge wrote. “It is sadder yet when these investigators flagrantly lie to friends and acquaintances of the plaintiff and his counsel in an (ultimately unsuccessful) attempt to obtain derogatory information about them.”
Rakoff dismissed Uber’s argument that Miguel Santos-Neves, the investigator from Ergo hired to dig through Meyer’s life, went “rogue,” insisting that “his misrepresentations were condoned by the highest levels of Ergo leadership.”
The judge ruled that Ergo’s report on Meyer was barred from being used in the lawsuit by Uber’s lawyers. In oral response, Kalanick’s lawyers did not object, “provided that it did not involve a concession of wrongdoing on defendants' part.” Rakoff also noted that Uber and Kalanick have agreed to pay Meyer and his legal team an “undisclosed” sum of money “in reimbursement of plaintiff's attorneys' fees and expenses incurred in conjunction with these matters.”
It remains to be seen how this will affect Meyer’s lawsuit against Kalanick. Uber’s lawyers have already moved for the case to be moved to arbitration.