Oracle Lawsuit Against Gov. Kate Brown Survives First Challenge

Marion County judge rejects state claim that only Attorney General can settle Oracle litigation.

A Marion County circuit judge yesterday rejected the state's argument that Gov. Kate Brown lacks the authority to settle a litigation between Oregon and Oracle America Inc.

In January, WW reported Oracle's claim that in November 2015 Oracle senior vice president Ken Glueck and Brown's then-chief of staff Brian Shipley reached a verbal agreement in October 2015 to resolve all litigation between the state and Oracle in return for $25 million in software and services.

Oracle then filed a new lawsuit in Marion County Circuit Court seeking to enforce that alleged verbal agreement.

The company sought to resolve numerous lawsuits arising from the failed website Oracle built for Cover Oregon in 2013.

The $300 million online health care exchange was a debacle for Oracle and former Gov. John Kitzhaber, and the finger-pointing that ensued has been an expensive distraction for the software giant and Brown, who'd like to put the issue behind her.

That's not going to happen just yet.

Marion County Circuit Judge Sean Armstrong yesterday rejected the state's request that he throw out Oracle's lawsuit seeking to enforce the alleged $25 million settlement.

Armstrong's ruling, first reported by the Portland Tribune, knocked out the state's fundamental contention—that whatever Shipley and Oracle's Glueck may have said to each other last year, only Attorney General Ellen Rosenblum, who filed the original lawsuit against Oracle on the state's behalf, has the legal authority to settle the litigation.

"[The state] asserts that the Governor lacked the authority to settle the related cases between it and [Oracle]," Armstrong wrote. "The Court cannot conclude the Governor lacked authority."

The judge also ruled that Oracle's lawsuit does not duplicate other litigation between the parties and said Oracle could proceed with discovery, which could include the deposition of state officials with information about Shipley's communication with Oracle.

Oracle spokeswoman Deborah Hellinger applauded the ruling. "Oracle negotiated in good faith with the Governor to settle the lawsuits related to the Cover Oregon project, believing, as now confirmed by the court, that the Governor had the authority," said Hellinger in a statement. "Far from the settlement being a 'complete fabrication,' as alleged by the Attorney General, we agreed on settlement terms and now will be able to prove it through prompt discovery of the Governor's and the Attorney General's offices."

Kristina Edmunson, a spokeswoman for AG Rosenblum, disagreed with Oracle's interpretation.

"While we disagree with the judge's ruling that keeps this frivolous lawsuit alive, the ruling has nothing to do with the merits of Oracle's claim that the case was settled," Edmunson said in a statement. "The evidence will clearly establish that there was never a settlement."