SAN FRANCISCO—After hours of testimony on Wednesday by three Uber employees, US District Judge William Alsup rescheduled the start of the Waymo v. Uber trial to February 5, 2018. The announcement came at the end of a second day of evidentiary hearings.

Judge Alsup rebuked Uber’s lawyers for not producing documents that should have already come up during discovery, the normal process by which materials are shared with opposing lawyers during the course of a lawsuit. As a result of Uber's actions, the trial date has been delayed twice.

"I've never seen a case where there were so many bad things that—like Uber has done in this case. So many," he said. "Usually it's more evenly divided. But Uber has caused two continuances."

Waymo v. Uber began back in February, when Waymo sued Uber and accused one of its own former employees, Anthony Levandowski, of stealing 14,000 files shortly before he left Waymo and went on to found a company that was quickly acquired by Uber. Levandowski, who refused to comply with his employers demands during the course of this case, has since been fired. Uber has denied that it benefited in any way form Lewandowski's actions.

The case will likely have a huge impact on the future of autonomous vehicles and which companies will dominate the field.

This week, the lawsuit has been thrown into chaos as federal prosecutors suddenly—and highly unusually—sent a still-sealed November 22 letter to the judge about their investigation. Judge Alsup had previously referred possible criminal behavior by Uber to be examined by prosecutors. No criminal charges have been publicly filed.

The first person to take the stand was Uber’s deputy general counsel, Angela Padilla. Under intense questioning by Waymo’s top lawyer, she testified Wednesday that former employee Richard Jacobs was trying to extort the company when he submitted an explosive April 2017 legal demand letter alleging possible criminal behavior on the part of himself and his former colleagues.

Yet, somehow, Uber settled legal demands made on behalf of Jacobs, who worked at one of Uber's most secretive internal divisions and was paid a total of $4.5 million to end his legal claims.

Jacobs, who testified Tuesday in court, disclosed those specific amounts. In a strange twist, however, Jacobs also repudiated some of the specific allegations that were in the letter written by his then-lawyer, Clayton Halunen, on Jacobs’ behalf. Padilla told the court that this letter amounted to extortion.

Charles Verhoeven, Waymo’s lawyer, questioned Padilla with a flat and incredulous tone. "Does Uber pay money to extortionists?" he asked.

"We really try not to," she said.

"The original demand was extortionate, I wanted to take the air out of that balloon by going over to the government ourselves," she said, explaining that Uber took Jacobs’ allegations to federal prosecutors in San Francisco, New York, and Washington, DC. "The bulk of his letter is meritless."

US District Judge William Alsup interjected: "You’re not coming to grips with counsel’s question. You’ve said the letter was fantastical. A lot of people are wondering then why would you pay him so much money to help you solve problems that don’t exist?"

"It was in context of the settlement," Padilla said.

"So you just paid him to resolve the claims?" Verhoeven asked."

"Correct," Padilla responded.

"Did he do anything for Uber while he was being paid $1 million?" Verhoeven continued.

"I don’t have any personal knowledge of that," Padilla answered, suggesting that Verhoeven ask Wilmer Hale, an outside law firm that is doing work for Uber.

"People don't pay that kind of money for bs," Judge Alsup later told Padilla. "It looks like you covered this up, refused to turn it over to the lawyers that were most involved in the case, to me, for reasons that are inexplicable. To me it does not add up."

Padilla responded: "There was no effort to cover this up."

"Waymo" was not a search term

Padilla continued her testimony by explaining that in April 2017, Jacobs was caught "exfiltrating" proprietary data to his own personal e-mail account, before he triggered an internal security alert.

Jacobs summarized his allegations in a lengthy e-mail to top executives, including Uber’s then-CEO, Travis Kalanick, with the subject line "Criminal and Unethical Activities" on April 14, 2017, shortly before Jacobs left the company. That e-mail, which was also not made public, appeared to contain similar allegations that were in his legal demand letter. Jacobs seemingly outlined the inappropriate use of ephemeral and encrypted messaging devices, and "non-attributable" devices that could not easily be traced back to Uber as a way to evade legal processes.

Padilla explained, under questioning, that Uber retained Jacobs’ correspondence and information about the files he allegedly took.

Soon after, Judge Alsup asked why this e-mail from Jacobs had not been previously revealed.

"We’ve never seen it before," Verhoeven said.

Judge Alsup then pointed out that the Jacobs e-mail specifically mentioned Waymo.

"It makes allegations about how that activities and communications could be done without regard to judicial orders and subpoenas," he said.

The judge indicated that Jacobs may have been describing potentially illegal behavior as a way to evade discovery in a civil or criminal case—the process by which data, documents, and other materials must be preserved. Judge Alsup was baffled as to why this e-mail did not turn up sooner as part of Waymo’s discovery process of Uber’s servers and other devices, particularly when it specifically mentioned Waymo.

"i would like to know, and here’s what I think the answer is—I was surprised to learn that ‘Waymo’ is not a search term," Arturo González, Uber’s attorney, said.

Charles Verhoeven, Waymo’s attorney, did not dispute this, but explained that he believed his side would be inundated with irrelevant materials.

Then, it was González’ turn to question Padilla. He lead her through a series of questions trying to illustrate that Uber did nothing wrong and that settling Jacobs’ legal threats made perfect business sense.

"What is your estimate as to how much it would cost Uber if you would litigate that through trial?" he said.

"One concern would have been the sheer dollars and sense and that would have been a lot," Padilla said, estimating it would cost "probably $5 to $10 million."

"And more from distraction and lost productivity and the reputational damage done by the release of salacious unanswered allegations," she added.

González kept going.

"When you settled that matter because you didn't want Judge Alsup to find out about it?"

"Hell no," Padilla responded.

"To be clear, when you didn’t give that document to the lawyers at this table was that purposely attempting to to keep it away from google?"

"Absolutely not."

González then tried to show that Jacobs’ demand letter has no bearing on the overarching allegations of theft of trade secrets. But Judge Alsup was not convinced.

"It shows a surreptitious clandestine communications system that would be ready made why Mr. Verhoeven hasn’t found the trade secrets on the server," the judge said.