With the update to Android Studio 3.1 our apps' builds started breaking randomly on all machines. On my machine the build breaks with a StackOverflowError during the dexing process. When d8 and desugaring are disabled in gradle.properties the builds pass.
The problem seems to be related to the qoppapdf library that we used for several years in our prod app without problems. The problem is reproducible with a new Android project where the library jar is included in the libs dir and multidex is used in gradle. The StackOverflow error is as follows: 
org.gradle.api.tasks.TaskExecutionException: Execution failed for task ':app:transformClassesWithDexBuilderForDebug'.
    at org.gradle.api.internal.tasks.execution.ExecuteActionsTaskExecuter.executeActions(ExecuteActionsTaskExecuter.java:100)
    at org.gradle.api.internal.tasks.execution.ExecuteActionsTaskExecuter.execute(ExecuteActionsTaskExecuter.java:70)
    at org.gradle.api.internal.tasks.execution.OutputDirectoryCreatingTaskExecuter.execute(OutputDirectoryCreatingTaskExecuter.java:51)
    at org.gradle.api.internal.tasks.execution.SkipUpToDateTaskExecuter.execute(SkipUpToDateTaskExecuter.java:62)
    at org.gradle.api.internal.tasks.execution.ResolveTaskOutputCachingStateExecuter.execute(ResolveTaskOutputCachingStateExecuter.java:54)
    at org.gradle.api.internal.tasks.execution.ValidatingTaskExecuter.execute(ValidatingTaskExecuter.java:60)
    at org.gradle.api.internal.tasks.execution.SkipEmptySourceFilesTaskExecuter.execute(SkipEmptySourceFilesTaskExecuter.java:97)
    at org.gradle.api.internal.tasks.execution.CleanupStaleOutputsExecuter.execute(CleanupStaleOutputsExecuter.java:87)
    at org.gradle.api.internal.tasks.execution.ResolveTaskArtifactStateTaskExecuter.execute(ResolveTaskArtifactStateTaskExecuter.java:52)
    at org.gradle.api.internal.tasks.execution.SkipTaskWithNoActionsExecuter.execute(SkipTaskWithNoActionsExecuter.java:52)
    at org.gradle.api.internal.tasks.execution.SkipOnlyIfTaskExecuter.execute(SkipOnlyIfTaskExecuter.java:54)
    at org.gradle.api.internal.tasks.execution.ExecuteAtMostOnceTaskExecuter.execute(ExecuteAtMostOnceTaskExecuter.java:43)
    at org.gradle.api.internal.tasks.execution.CatchExceptionTaskExecuter.execute(CatchExceptionTaskExecuter.java:34)
    at org.gradle.execution.taskgraph.DefaultTaskGraphExecuter$EventFiringTaskWorker$1.run(DefaultTaskGraphExecuter.java:248)
    at org.gradle.internal.progress.DefaultBuildOperationExecutor$RunnableBuildOperationWorker.execute(DefaultBuildOperationExecutor.java:336)
    at org.gradle.internal.progress.DefaultBuildOperationExecutor$RunnableBuildOperationWorker.execute(DefaultBuildOperationExecutor.java:328)
    at org.gradle.internal.progress.DefaultBuildOperationExecutor.execute(DefaultBuildOperationExecutor.java:199)
    at org.gradle.internal.progress.DefaultBuildOperationExecutor.run(DefaultBuildOperationExecutor.java:110)
    at org.gradle.execution.taskgraph.DefaultTaskGraphExecuter$EventFiringTaskWorker.execute(DefaultTaskGraphExecuter.java:241)
    at org.gradle.execution.taskgraph.DefaultTaskGraphExecuter$EventFiringTaskWorker.execute(DefaultTaskGraphExecuter.java:230)
    at org.gradle.execution.taskgraph.DefaultTaskPlanExecutor$TaskExecutorWorker.processTask(DefaultTaskPlanExecutor.java:123)
    at org.gradle.execution.taskgraph.DefaultTaskPlanExecutor$TaskExecutorWorker.access$200(DefaultTaskPlanExecutor.java:79)
    at org.gradle.execution.taskgraph.DefaultTaskPlanExecutor$TaskExecutorWorker$1.execute(DefaultTaskPlanExecutor.java:104)
    at org.gradle.execution.taskgraph.DefaultTaskPlanExecutor$TaskExecutorWorker$1.execute(DefaultTaskPlanExecutor.java:98)
    at org.gradle.execution.taskgraph.DefaultTaskExecutionPlan.execute(DefaultTaskExecutionPlan.java:626)
    at org.gradle.execution.taskgraph.DefaultTaskExecutionPlan.executeWithTask(DefaultTaskExecutionPlan.java:581)
    at org.gradle.execution.taskgraph.DefaultTaskPlanExecutor$TaskExecutorWorker.run(DefaultTaskPlanExecutor.java:98)
    at org.gradle.internal.concurrent.ExecutorPolicy$CatchAndRecordFailures.onExecute(ExecutorPolicy.java:63)
    at org.gradle.internal.concurrent.ManagedExecutorImpl$1.run(ManagedExecutorImpl.java:46)
    at java.util.concurrent.ThreadPoolExecutor.runWorker(ThreadPoolExecutor.java:1142)
    at java.util.concurrent.ThreadPoolExecutor$Worker.run(ThreadPoolExecutor.java:617)
    at org.gradle.internal.concurrent.ThreadFactoryImpl$ManagedThreadRunnable.run(ThreadFactoryImpl.java:55)
    at java.lang.Thread.run(Thread.java:745)
Caused by: java.lang.RuntimeException: com.android.build.api.transform.TransformException: com.android.builder.dexing.DexArchiveBuilderException: com.  android.builder.dexing.DexArchiveBuilderException: Failed to process C:\Projects\MyApplication\app\libs\qoppapdf.jar
    at com.android.builder.profile.Recorder$Block.handleException(Recorder.java:55)
    at com.android.builder.profile.ThreadRecorder.record(ThreadRecorder.java:104)
    at com.android.build.gradle.internal.pipeline.TransformTask.transform(TransformTask.java:212)
    at sun.reflect.NativeMethodAccessorImpl.invoke0(Native Method)
    at sun.reflect.NativeMethodAccessorImpl.invoke(NativeMethodAccessorImpl.java:62)
    at sun.reflect.DelegatingMethodAccessorImpl.invoke(DelegatingMethodAccessorImpl.java:43)
    at java.lang.reflect.Method.invoke(Method.java:497)
    at org.gradle.internal.reflect.JavaMethod.invoke(JavaMethod.java:73)
    at org.gradle.api.internal.project.taskfactory.IncrementalTaskAction.doExecute(IncrementalTaskAction.java:46)
    at org.gradle.api.internal.project.taskfactory.StandardTaskAction.execute(StandardTaskAction.java:39)
    at org.gradle.api.internal.project.taskfactory.StandardTaskAction.execute(StandardTaskAction.java:26)
    at org.gradle.api.internal.tasks.execution.ExecuteActionsTaskExecuter$1.run(ExecuteActionsTaskExecuter.java:121)
    at org.gradle.internal.progress.DefaultBuildOperationExecutor$RunnableBuildOperationWorker.execute(DefaultBuildOperationExecutor.java:336)
    at org.gradle.internal.progress.DefaultBuildOperationExecutor$RunnableBuildOperationWorker.execute(DefaultBuildOperationExecutor.java:328)
    at org.gradle.internal.progress.DefaultBuildOperationExecutor.execute(DefaultBuildOperationExecutor.java:199)
    at org.gradle.internal.progress.DefaultBuildOperationExecutor.run(DefaultBuildOperationExecutor.java:110)
    at org.gradle.api.internal.tasks.execution.ExecuteActionsTaskExecuter.executeAction(ExecuteActionsTaskExecuter.java:110)
    at org.gradle.api.internal.tasks.execution.ExecuteActionsTaskExecuter.executeActions(ExecuteActionsTaskExecuter.java:92)
    ... 32 more
Caused by: com.android.build.api.transform.TransformException: com.android.builder.dexing.DexArchiveBuilderException: com.android.builder.dexing.   DexArchiveBuilderException: Failed to process C:\Projects\MyApplication\app\libs\qoppapdf.jar
    at com.android.build.gradle.internal.transforms.DexArchiveBuilderTransform.transform(DexArchiveBuilderTransform.java:327)
    at com.android.build.gradle.internal.pipeline.TransformTask$2.call(TransformTask.java:221)
    at com.android.build.gradle.internal.pipeline.TransformTask$2.call(TransformTask.java:217)
    at com.android.builder.profile.ThreadRecorder.record(ThreadRecorder.java:102)
    ... 48 more
Caused by: com.android.builder.dexing.DexArchiveBuilderException: com.android.builder.dexing.DexArchiveBuilderException: Failed to process  C:\Projects\MyApplication\app\libs\qoppapdf.jar
    at sun.reflect.NativeConstructorAccessorImpl.newInstance0(Native Method)
    at sun.reflect.NativeConstructorAccessorImpl.newInstance(NativeConstructorAccessorImpl.java:62)
    at sun.reflect.DelegatingConstructorAccessorImpl.newInstance(DelegatingConstructorAccessorImpl.java:45)
    at java.lang.reflect.Constructor.newInstance(Constructor.java:422)
    at java.util.concurrent.ForkJoinTask.getThrowableException(ForkJoinTask.java:593)
    at java.util.concurrent.ForkJoinTask.reportException(ForkJoinTask.java:677)
    at java.util.concurrent.ForkJoinTask.join(ForkJoinTask.java:720)
    at com.android.ide.common.internal.WaitableExecutor.waitForTasksWithQuickFail(WaitableExecutor.java:146)
    at com.android.build.gradle.internal.transforms.DexArchiveBuilderTransform.transform(DexArchiveBuilderTransform.java:306)
    ... 51 more
Caused by: com.android.builder.dexing.DexArchiveBuilderException: Failed to process C:\Projects\MyApplication\app\libs\qoppapdf.jar
    at com.android.build.gradle.internal.transforms.DexArchiveBuilderTransform.launchProcessing(DexArchiveBuilderTransform.java:803)
    at com.android.build.gradle.internal.transforms.DexArchiveBuilderTransform.lambda$convertToDexArchive$8(DexArchiveBuilderTransform.java:728)
    at java.util.concurrent.ForkJoinTask$AdaptedCallable.exec(ForkJoinTask.java:1424)
    at java.util.concurrent.ForkJoinTask.doExec(ForkJoinTask.java:289)
    at java.util.concurrent.ForkJoinPool$WorkQueue.runTask(ForkJoinPool.java:1056)
    at java.util.concurrent.ForkJoinPool.runWorker(ForkJoinPool.java:1692)
    at java.util.concurrent.ForkJoinWorkerThread.run(ForkJoinWorkerThread.java:157)
Caused by: com.android.builder.dexing.DexArchiveBuilderException: Error while dexing.
    at com.android.builder.dexing.D8DexArchiveBuilder.getExceptionToRethrow(D8DexArchiveBuilder.java:169)
    at com.android.builder.dexing.D8DexArchiveBuilder.convert(D8DexArchiveBuilder.java:146)
    at com.android.build.gradle.internal.transforms.DexArchiveBuilderTransform.launchProcessing(DexArchiveBuilderTransform.java:798)
    ... 6 more
Caused by: java.lang.RuntimeException: java.lang.StackOverflowError
    at com.android.tools.r8.R8.unwrapExecutionException(R8.java:501)
    at com.android.tools.r8.D8.run(D8.java:170)
    at com.android.tools.r8.D8.lambda$run$1(D8.java:91)
    at com.android.tools.r8.utils.ExceptionUtils.withCompilationHandler(ExceptionUtils.java:58)
    at com.android.tools.r8.utils.ExceptionUtils.withD8CompilationHandler(ExceptionUtils.java:45)
    at com.android.tools.r8.D8.run(D8.java:88)
    at com.android.builder.dexing.D8DexArchiveBuilder.convert(D8DexArchiveBuilder.java:144)
    ... 7 more
Caused by: java.lang.StackOverflowError
    at sun.reflect.NativeConstructorAccessorImpl.newInstance0(Native Method)
    at sun.reflect.NativeConstructorAccessorImpl.newInstance(NativeConstructorAccessorImpl.java:62)
    at sun.reflect.DelegatingConstructorAccessorImpl.newInstance(DelegatingConstructorAccessorImpl.java:45)
    at java.lang.reflect.Constructor.newInstance(Constructor.java:422)
    at java.util.concurrent.ForkJoinTask.getThrowableException(ForkJoinTask.java:598)
    at java.util.concurrent.ForkJoinTask.get(ForkJoinTask.java:1005)
    at com.android.tools.r8.utils.ThreadUtils.awaitFutures(ThreadUtils.java:21)
    at com.android.tools.r8.ir.conversion.IRConverter.convertClassesToDex(IRConverter.java:315)
    at com.android.tools.r8.ir.conversion.IRConverter.convertToDex(IRConverter.java:225)
    at com.android.tools.r8.D8.optimize(D8.java:187)
    at com.android.tools.r8.D8.run(D8.java:158)
    ... 12 more
Caused by: java.lang.StackOverflowError
    at java.util.HashMap.hash(HashMap.java:338)
    at java.util.HashMap.containsKey(HashMap.java:595)
    at java.util.HashSet.contains(HashSet.java:203)
    at com.android.tools.r8.ir.code.IRCode.depthFirstSorting(IRCode.java:264)
    at com.android.tools.r8.ir.code.IRCode.depthFirstSorting(IRCode.java:267)
    at com.android.tools.r8.ir.code.IRCode.depthFirstSorting(IRCode.java:267)
The qoppapdf library can be downloaded from here https://www.qoppa.com/android/pdfsdk/evaluate/. Then the qoppapdf.jar which is located in qpdftoolkit.zip. qoppapdf.jar is then added to the libs directory of the project. This is the very basic build.gradle of the test app that I used to reproduce the build. The only difference with the default build.gradle is that multidex is enabled:
apply plugin: 'com.android.application'
apply plugin: 'kotlin-android'
apply plugin: 'kotlin-android-extensions'
android {
    compileSdkVersion 27
    defaultConfig {
        applicationId "net.vectorworks.myapplication"
        minSdkVersion 21
        targetSdkVersion 27
        multiDexEnabled true
        versionCode 1
        versionName "1.0"
        testInstrumentationRunner "android.support.test.runner.AndroidJUnitRunner"
    }
    buildTypes {
        release {
            minifyEnabled false
            proguardFiles getDefaultProguardFile('proguard-android.txt'), 'proguard-rules.pro'
        }
    }
}
dependencies {
    implementation fileTree(dir: 'libs', include: ['*.jar'])
    implementation"org.jetbrains.kotlin:kotlin-stdlib-jre7:$kotlin_version"
    implementation 'com.android.support:appcompat-v7:27.1.0'
    implementation 'com.android.support.constraint:constraint-layout:1.0.2'
    implementation 'com.android.support:design:27.1.0'
    implementation 'com.android.support:multidex:1.0.3'
    testImplementation 'junit:junit:4.12'
    androidTestImplementation 'com.android.support.test:runner:1.0.1'
    androidTestImplementation 'com.android.support.test.espresso:espresso-core:3.0.1'
}
Deleting the in-app and "global" .gradle directories, build directories, invalidating Android Studio caches and rebuilding the app don't fix the problem. The only solution I found is disabling D8 altogether in gradle.properties:
android.enableD8=false
This is resulting to a warning The option 'android.enableD8' is deprecated and should not be used anymore. Use 'android.enableD8=true' to remove this warning. It will be removed in AGP version 3.3. So clearly not a long term solution. Any help will be appreciated!