In an InsideCounsel article published on October 6, 2016, Pryor Cashman Partner Eric Fishman and Associate Ross Bagley examined the risks associated with hiring private investigators (“PIs”) to gather information for pending litigations.

While attorneys are increasingly turning to PIs to help uncover critical facts that could impact the outcome of a case, they should do so with caution, advised Fishman and Bagley, citing a recent decision against Uber as an example of what can go wrong when PIs are brought on to obtain information.

Uber and the Ergo Investigation – A Cautionary Tale 

The plaintiff in the Uber matter – currently pending in the U.S. District Court for the Southern District of N.Y. – brought suit against the company and its CEO, Travis Kalanick, claiming that “surge pricing” and other aspects of Uber’s business model violated antitrust laws. As part of discovery, Uber retained Ergo – a private investigation firm – to gather intel on the plaintiff and his attorney, Andrew Schmidt.

Ergo – which was not a New York State licensed PI firm – contacted acquaintances and colleagues of the plaintiff and Schmidt under false pretenses in an effort to obtain private and highly personal information about them; none of which was relevant to the antitrust litigation. Ergo also recorded several phone conversations with the sources without their knowledge or consent.

Ultimately, Schmidt learned of the investigation and was granted permission from presiding Judge Jed Rakoff to obtain document discovery and depositions pertaining to it.

Following disclosure by Uber and Ergo, Judge Rakoff issued a scathing decision and an order: 

• Prohibiting the use of any of the information obtained from Ergo’s investigation; and

• Enjoining Uber and Ergo from undertaking any further personal background investigations of anyone involved in the litigation through the use of false pretenses, unlicensed investigators, illegal secret recordings, or other unlawful means.     

To read the full InsideCounsel article, including Fishman and Bagley’s key “takeaways” for attorneys who are considering hiring PIs for litigation, please visit here.