Вы находитесь на странице: 1из 28

1

2
3
4

IN THE CIRCUIT COURT OF THE STATE OF OREGON

FOR THE COUNTY OF MARION

ORACLE AMERICA, INC., a Delaware


corporation,

No. 16CV01760
Honorable Sean E. Armstrong

Plaintiff,
8
vs.
9
10
11
12
13
14

STATE OF OREGON, by and through


Governor Kate Brown, in her official capacity
as Governor for the State of Oregon; Ellen
Rosenblum, Attorney General for the State of
Oregon; the Oregon Health Authority; the
Oregon Department of Human Services; the
Oregon Health Insurance Exchange
Corporation, dba Cover Oregon, an Oregon
public corporation; and the Department of
Consumer and Business Services, as successor
in interest for Cover Oregon,

DEFENDANTS MOTION TO
DISMISS PURSUANT TO
ORCP 21 A(8), ORCP 21 A(3),
and ORCP 21 A(7)
Oral Argument Requested
ORS 20.140 State fees deferred
at filing

15
Defendants.
16
17
18
19
20
21
22
23
24
25
26

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

TABLE OF CONTENTS

Page

ORAL ARGUMENT AND COURT REPORTING SERVICES REQUESTED .................... 1

COMPLIANCE WITH UTCR 5.010 ....................................................................................... 1

MOTION................................................................................................................................... 1

INTRODUCTION .................................................................................................................... 1

BACKGROUND ...................................................................................................................... 2

8
9
10

I.

Oracles new story. ........................................................................................... 2

II.

Oracles story is a complete fabrication............................................................ 3

III.

The Court can take judicial notice of the ways in which Oracle has
behaved as if the parties did not settle. ............................................................. 5

11

LEGAL STANDARD ............................................................................................................... 9

12

ARGUMENT ............................................................................................................................ 9

13
14

I.

The Governors Chief of Staff has no authority to settle the


litigation with Oracle. ....................................................................................... 9

A.

The Governors Chief of Staff has no authority to settle claims


belonging to the Attorney General. ................................................................... 9

B.

The Governors Chief of Staff cannot represent State agencies with


respect to litigation.......................................................................................... 11

C.

Knowledge of the extent of Mr. Shipleys authority is imputed to


Oracle. ............................................................................................................. 13

II.

The State is immune from suit. ....................................................................... 14

III.

The terms of the alleged settlement are too vague to be specifically


enforced........................................................................................................... 15

IV.

The Court should dismiss the complaint under ORCP 21 A(8)


because Oracle does not allege it had authority to waive Mythics or
the individual defendants rights to costs........................................................ 17

V.

The Court can dismiss this complaint under ORCP 21 A(3) and as a
matter of comity, and let Judge Geyer deal with the purported
settlement in Rosenblum. ................................................................................ 18

15
16
17
18
19
20
21
22
23
24
25
26

Page

i-

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

TABLE OF CONTENTS (contd)

Page

VI.

The Court can dismiss the complaint under ORCP 21 A(7) because
the individual defendants and Mythics are necessary parties who are
not before the Court. ....................................................................................... 20

CONCLUSION ....................................................................................................................... 20

6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26

Page

ii -

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

TABLE OF AUTHORITIES

Page(s)

Cases

Barapind v. Reno,
225 F3d 1100 (9th Cir 2000) ...................................................................................... 19

5
6
7
8
9

Booras v. Uyeda,
295 Or 181 (1983) ....................................................................................................... 17
Clarke v. Oregon Health Scis. Univ.,
343 Or 581 (2007) ....................................................................................................... 14
Dalton v. Robert Jahn Corp.,
209 Or App 120 (2006) ......................................................................................... 16, 17

10

Eli v. Lampert,
194 Or App 280 (2004) rev den, 338 Or 57 (2005) .................................................... 19

11

Frohnmayer v. State Acc. Ins. Fund Corp.,


294 Or 570 (1983) ................................................................................................. 11, 12

12
13
14
15
16
17
18
19
20

Gaffi v. Burns,
278 Or 327 (1977) ....................................................................................................... 18
Gafur v. Legacy Good Samaritan Hosp. & Med. Ctr.,
344 Or 525 (2008) ......................................................................................................... 9
Hanggi on Behalf of Oregon Pub. Employees Ret. Fund v. Hartford
Fire Ins. Co.,
132 Or App 601 (1995), rev dismissed, 322 Or 573 (1996) ....................................... 12
Harsh Inves. Corp. v. State Hous. Div.,
88 Or App 151 (1987), rev den, 305 Or 273 (1988) ............................................. 13, 14
Herer v. Ah Ha Pub., LLC,
927 F Supp 2d 1080 (D Or 2013) ............................................................................... 19

21

In Does 1-7 v. State of Oregon,


164 Or App 543 (1999), rev den, 330 Or 138 (2000) ........................................... 13, 14

22

In re Bristol Myers Squibb Co. Sec. Litig.,


586 F Supp 2d 148 (SDNY 2008) ................................................................................ 9

23

In re Conduct of Ellis,
356 Or 691 (2015) ......................................................................................................... 7

24
25

J.J. & L. Properties, Inc. v. Henry,


122 Or App 395 (1993) ......................................................................................... 13, 14

26

Page

iii -

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

TABLE OF AUTHORTIES (contd)


Page(s)

2
3

Cases

Johnson v. SAIF Corp.,


343 Or 139 (2007) ................................................................................................. 12, 18

5
6

Johnstone v. Zimmer,
191 Or App 26 (2003) ........................................................................................... 15, 16

Lee v. City of Los Angeles,


250 F3d 668 (9th Cir 2001) .......................................................................................... 8

8
9

Lee v. Mitchell,
152 Or App 159 (1998) ........................................................................................... 9, 18

10

Miller v. Ogden,
134 Or App 589 (1997) ............................................................................................... 16

11
12
13
14
15
16
17
18
19

Molina v. Washington Mut. Bank,


No. 09-CV-00894-IEG-AJB, 2010 WL 431439 (SD Cal Jan.
29, 2010) ....................................................................................................................... 8
Oracle America, Inc. v. Governor Kate Brown,
Marion County Case No. 15CV30762 .......................................................................... 5
Oracle America, Inc. v. OHIEC,
Ninth Circuit Case No. 15-35950 ................................................................................. 6
Oracle America, Inc. v. OHIEC,
Ninth Circuit Case No. 15-35975 ................................................................................. 6
Oracle America, Inc. v. Oregon Health Insurance Exchange
Corporation dba Cover Oregon,
United States District Court for the District of Oregon Case
No. 3:14-cv-01279-BR ......................................................................................... 5, 7, 8

20

Oracle America, Inc. vs Kevin Looper,


Multnomah County Case No. 15CV04705 ................................................................... 6

21

Oregon State Bar v. Wright,


96 Or App 375 (1989) revd in part, 309 Or 37 (1990).............................................. 12

22
23
24
25
26

Page

Rise v. Board of Parole,


304 Or 385 (1987) ....................................................................................................... 13
Rosenblum et al. v. Oracle America, Inc. et al.,
Marion County Case No. 14C20043............................. 4, 5, 6, 7, 10, 11, 13, 17, 19, 20
Rosenblum v. Oracle America Inc.,
Oregon Supreme Court No. S063817 ........................................................................... 6

iv -

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

TABLE OF AUTHORTIES (contd)


Page(s)

2
3
4
5

Cases
Rosenblum v. Oracle America, Inc.,
Oregon Supreme Court S063490 .................................................................................. 6

State of Oregon v. Oracle America, Inc.,


Marion County Case No. 15CV03287 .......................................................................... 6

7
8

Tellabs, Inc. v. Makor Issues & Rights, Ltd.,


551 US 308 (2007) ........................................................................................................ 7

U.S. S.E.C. v. Fehn,


97 F3d 1276 (9th Cir 1996) .......................................................................................... 8

10
11

Webster v. Aramark Corr. Servs.,


No. 3:14-CV-00652-AC, 2014 WL 7405656 (D Or Dec. 23,
2014) ............................................................................................................................. 8

12

Statutes

13

OEC 201................................................................................................................................ 7, 8

14

ORS 166.725(5) ................................................................................................................ 10, 14

15

ORS 180 ............................................................................................................................ 11, 12

16

ORS 180.760(1) ................................................................................................................ 10, 14

17

ORS 30.320 ............................................................................................................................. 15

18
19
20
21
22

Rules
Federal LR 41-1 ........................................................................................................................ 7
FRCP 12(b)(6) .......................................................................................................................... 7
ORCP 1 ................................................................................................................................... 19
ORCP 21 A ......................................................................................... 1, 3, 9, 17, 18, 19, 20, 21
ORCP 28 B ............................................................................................................................. 20

23
24
25
26

Page

ORCP 29 ................................................................................................................................. 20
ORCP 29 B ............................................................................................................................. 20
ORCP 54 A(3)......................................................................................................................... 18
UTCR 7.040 .............................................................................................................................. 7

v-

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

ORAL ARGUMENT AND COURT REPORTING SERVICES REQUESTED

2
3

Pursuant to UTCR 5.050, Defendants request a hearing of 60 minutes during which


the parties may present oral argument. Court reporting services are requested.

COMPLIANCE WITH UTCR 5.010

Counsel for Defendants certify that they conferred with opposing counsel regarding

the issues raised in this motion, but were unable to resolve them without the assistance of the

Court.

MOTION

Defendants respectfully move this Court for an order dismissing the Complaint

10

pursuant to ORCP 21 A(8), ORCP 21 A(7), ORCP 21 A(3), and the doctrine of comity. This

11

motion is supported by the following Memorandum of Points and Authorities, the

12

Declaration of Harry B. Wilson, and the Court file.

13

INTRODUCTION

14

Oracles latest complaint is the sixth lawsuit arising out of its dispute with the State.

15

This time, Oracle has invented a story that one of its corporate executives, Ken Glueck, and

16

the Governors then Chief of Staff, Brian Shipley, brokered a settlement of the States

17

litigation against Oracle. According to Oracle, these two non-lawyers hammered out the

18

legal boilerplate of a settlement agreement in a few brief telephone conversations, with no

19

written documentation. Unsurprisingly, Oracles creative tale has a happy ending for Oracle:

20

settlement of the States billion-dollar case for $25 million worth of Oracle products and

21

services.

22

The State need not get dragged into prolonged litigation about the truth of these

23

implausible allegations. Even if Oracles story were true (which it is not), Oracles effort to

24

enforce the supposed settlement would still fail for several reasons. First, only the Oregon

25

Department of Justice (DOJ), not the Governors Chief of Staff, had authority to negotiate

26

a settlement of the States case against Oracle. Several of the States claims were brought by

Page

1-

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

the Attorney General, under statutes giving her authority to prosecute these claims. The

Attorney General is independently elected she does not work for the Governor (much less

the Governors Chief of Staff) and the Governors staff could not bargain away her claims.

If Oracles story is believed, then Mr. Shipley negotiated legal terms on behalf of the state

agencies that are parties to the Oracle litigation. Oregon statutes provide that only the DOJ

can represent state agencies in legal matters. Second, the State is immune from suit absent a

statutory waiver of immunity. Third, the verbal settlement agreement supposedly brokered

by Mr. Shipley and Mr. Glueck is vague or silent with respect to a host of key terms. Oracle

cannot obtain specific performance of such an elusive agreement. Fourth, Oracle does not

10

allege it had authority to waive Mythics or the individual defendants rights to costs. Fifth,

11

considering its broader factual context, Oracles newest lawsuit should be dismissed as a

12

matter of comity to the existing case pending before the Honorable Courtland Geyer.

13

Finally, sixth, all necessary parties for enforcement of the alleged agreement are not before

14

the Court in this action.

15

This new complaint continues Oracles strategy to delay and avoid a public trial

16

regarding its failure to provide a functioning public website for healthcare coverage for

17

Oregonians. The Court should dismiss Oracles complaint promptly so the parties can get on

18

with litigating Oracles failure to deliver a working health insurance exchange.

19
20

BACKGROUND
I.

21

Oracles new story.


Oracles allegations fabricate an imaginary settlement. The main players were Ken

22

Glueck, an executive vice president at Oracle, and Brian Shipley, then Chief of Staff to

23

Governor Brown. (Compl 13.) Oracle says that on October 19, 2015, Mr. Glueck and Mr.

24

Shipley talked on the phone about settling all the cases between Oracle and the State.

25

Paragraph 16 of the complaint alleges the terms of a supposed deal in which the Attorney

26

General, before anything else happened, would dismiss all her claims against the individual

Page

2-

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

Oracle defendants without fees or costs to any party. (Compl 16a.) Next, the State and the

Attorney General were supposed to dismiss, with prejudice, all claims against Oracle in

several related cases. (Compl 16b.) In exchange for the dismissal of over a billion dollars

of claims, the State supposedly agreed to accept $15 million in undefined credits for Oracles

future services and unspecified software licenses, and Oracle agreed to fund vaguely

described computer science classes for Oregon students, supposedly worth more than $10

million in value. (Compl 16c.) Oracle claims that Mr. Shipley agreed to this deal.

(Compl 17.)

The State did not agree to settle anything. However, even accepting Oracles

10

allegations as true, as shown below, Mr. Shipley lacked authority to enter into any such deal

11

with Oracle as a matter of law. As the law charges Oracle with knowing, only the Attorney

12

General had the authority to settle her claims with Oracle and only the Department of Justice

13

can represent state agencies in such negotiations. In addition, the deal as alleged lacks the

14

specificity required for specific performance. The lack of authority to negotiate and broker a

15

deal along with the vagueness and absence of material terms provide grounds for dismissal

16

under ORCP 21 A(8). Oracle has behaved repeatedly as if no settlement occurred, and that

17

behavior provides additional grounds for dismissal under ORCP 21 A(3) and the doctrine of

18

comity.

19

II.

20

Oracles story is a complete fabrication.


Not even Oracle believes the truth of its allegations. As explained below, the Court

21

may take judicial notice of evidence that undermines the veracity of Oracles story. In

22

summary, since allegedly reaching a settlement on October 19, 2015, Oracles conduct

23

demonstrates that there was no settlement.

24
25

One week after the supposed settlement, Oracle filed two new counterclaims
against the State in Rosenblum et al. v. Oracle America, Inc. et al., Marion

26

Page

3-

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

County Case No. 14C20043 (Rosenblum). (Docket items, Wilson Decl Ex

1, at 9.)

3
4

Weeks after that Oracle noticed scores of new depositions. (Deposition


Notices, Wilson Decl Ex 2.)

On November 20, December 10, 2015, and January 11, 2016, Oracle appeared

in Marion County Circuit Court for hearings in that case. Yet, it never

disclosed the alleged settlement to the court, despite the Uniform Trial Court

Rule requiring it. (Wilson Decl 4.)

At those and other hearings, Oracle prosecuted discovery motions against the

10

State and third-party witnesses. The Court granted at least some of the relief

11

Oracle sought at those hearings, burdening the State and third-party witnesses

12

with the work of gathering, reviewing, designating, and producing documents

13

in litigation that Oracle now says was already settled. (Id.)

14

Oracle held the State to a document-production deadline of December 31,

15

forcing the State to expend considerable resources reviewing and producing

16

over a million documents, at considerable expense to the State. (Wilson Decl

17

5.)

18

19

federal rule requiring it. Instead, Oracle was silent, and after the Court issued

20

an opinion and order on November 18, 2015, Oracle appealed it. (Wilson

21

Decl 6.)

22

23

When Oracle filed its mediation questionnaire to the Ninth Circuit Court of
Appeals on December 22, 2015, Oracle missed yet another opportunity to

24

notify the federal court of the alleged settlement. (Wilson Decl Ex 3.)

25

26

Page

In its federal case, Oracle never notified the Court of a settlement, despite a

And, on December 18, 2015, Oracle filed a 10-Q report with the Securities
and Exchange Commission, signed by Oracle president, Safra Catz, stating

4-

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

that trial in Rosenblum is set for 2017. Oracle failed to mention that the case

had allegedly settled. (Wilson Decl Ex 4.)

This Court need not probe the truth of Oracles allegations (at least not at this

juncture) because Oracles claim fails as a matter of law. Even if the allegations of Oracles

complaint are presumed true, they still fail to state a claim and should be dismissed. Oracles

conduct in other cases shows that this action should be dismissed in favor of the prior actions

pending between the parties.

III.

The Court can take judicial notice of the ways in which Oracle has behaved as if
the parties did not settle.

9
The dispute between Oracle and the State of Oregon has spawned, so far, the

10
11

following are related cases in the state and federal courts:

12

Rosenblum v. Oracle, Marion County Case No. 14C20043. This case is


before Judge Geyer. In Rosenblum, the State sued Oracle for over a billion

13

dollars for fraud, false claims and breach of contract in bungling Oregons

14

health exchange website for Cover Oregon and a technology modernization

15

project for Oregon State agencies. (Docket sheet, Wilson Decl Ex 1.)

16

17

Cover Oregon, United States District Court for the District of Oregon Case

18

No. 3:14-cv-01279-BR (Cover Oregon). This case, originally before Judge

19

Anna Brown, is now on appeal before the Ninth Circuit. In Cover Oregon,

20

Oracle seeks approximately $23 million from the State for copyright

21

infringement. (Docket sheet, Wilson Decl Ex 5.)

22

23

Oracle America, Inc. v. Governor Kate Brown, Marion County Case No.
15CV30762 (Public Records Case). This case is before Judge Mary

24

Mertens James. In it, Oracle sued Governor Brown for injunctive relief under

25

Oregons Public Records Law. Oracle demands that the State release emails

26

Page

Oracle America, Inc. v. Oregon Health Insurance Exchange Corporation dba

5-

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

from former Governor Kitzhabers personal email account inadvertently

archived in the States data warehouse. Most of the relief that Oracle seeks in

the Public Records Case has already been ruled illegal in Rosenblum. (Wilson

Decl Ex 6.)

Oracle America, Inc. vs Kevin Looper, Multnomah County Case No.

15CV04705. In another example of Oracles willingness to file meritless

litigation, last February, Oracle sued five of former Governor Kitzhabers

campaign consultants for allegedly interfering with Oracles contract with

Cover Oregon. (Wilson Decl Ex 7.) A Multnomah County Judge dismissed

10

Oracles lawsuit, concluding that Oracle has presented an attempted prima

11

facie case supported primarily by out-of-context snippets of email

12

communication and insinuations in lieu of facts. (7/27/2015 Kantor, J.

13

Opinion and Order, Wilson Decl Ex 8, at 22.) That case is on appeal.

14

Other related cases are: State of Oregon v. Oracle America, Inc., Marion County Case

15

No. 15CV03287 (granting the States injunction prohibiting Oracle from restricting Oregons

16

use of the systems necessary for operation of Oregons Medicaid enrollment system);

17

Rosenblum v. Oracle America, Inc., Oregon Supreme Court S063490 (denying mandamus

18

proceeding filed by Oracle regarding the individual defendants in Rosenblum); Rosenblum v.

19

Oracle America Inc., Oregon Supreme Court No. S063817 (petition for mandamus by non-

20

party John Kitzhaber from order concerning review and production of his emails); Oracle

21

America, Inc. v. OHIEC, Ninth Circuit Case No. 15-35950 (the States appeal from a ruling

22

by Judge Brown in Cover Oregon); Oracle America, Inc. v. OHIEC, Ninth Circuit Case No.

23

15-35975 (Oracles appeal from the same ruling by Judge Brown). (Wilson Decl Ex 9.)

24

According to Oracles story in this case, all of the above-litigation that involved the State was

25

settled four months ago in a brief, undocumented phone conversation between two non-

26

lawyers.

Page

6-

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

The Court can take judicial notice of facts drawn from dockets in these related cases,

and may do so at any stage of the proceeding. OEC 201(f). 1 Docket sheets from

Rosenblum, the Public Records Case, and Oracles appeal from Cover Oregon show that

Oracle has behaved for months as if no settlement took place. (Docket sheets, Wilson Decl

Exs 1, 6, and 9.) Oracle has been litigating aggressively on all fronts, despite its purported

belief that it settled all claims in all cases four months ago.

UTCR 7.040 requires the parties to report immediately to the court any resolution of

any matter scheduled on the courts docket. Oracle did not, and still has not, reported a

settlement in Rosenblum or any of the other cases in state court. (Wilson Decl 4.) In the

10

three months after the supposed settlement and before filing this action, Oracle filed

11

counterclaims against the State and noticed the depositions of more than one hundred people

12

in Rosenblum, including former Governor Kitzhaber. (See Docket items, Wilson Decl Ex 1;

13

Depo Notices, Ex 2.). It has engaged in heated discovery battles, moving to compel

14

discovery and resisting motions to quash, and burdening both the State and third-parties.

15

(See Docket items, Wilson Decl Ex 1.)

16

Moreover, Federal LR 41-1 requires plaintiff (which is Oracle in the federal case,

17

Cover Oregon) to immediately notify the court of a settlement. Instead of doing so, Oracle

18

allowed the federal court, more than a month later, to issue an opinion, and then proceeded to

19

file an appeal. In its appeal to the Ninth Circuit from Judge Browns rulings in Cover

20

Oregon, Oracle filled out a mediation questionnaire, which required Oracle to describe the

21
22
23
24
25

Oregons rules on judicial notice are based on the Federal Rules of Evidence, see
OEC 201(b)-(d), 1981 Conference Committee Commentary, which allow both judicial notice
and consideration of documents referenced in a complaint on a motion to dismiss. See, e.g.,
Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 US 308, 322 (2007) (courts must consider
the complaint in its entirety, as well as other sources courts ordinarily examine when ruling
on Rule 12(b)(6) motions to dismiss, in particular, documents incorporated into the complaint
by reference, and matters of which a court may take judicial notice.). See also In re
Conduct of Ellis, 356 Or 691, 694 n2 (2015) (taking judicial notice of facts from court
dockets).

26

Page

7-

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

status of the Cover Oregon case. (12/22/2015 Ninth Circuit Mediation Questionnaire,

Wilson Decl Ex 3.) One would expect that if Oracle actually believed it had settled its

disputes with the State two months earlier, it would say so when describing the status of the

litigation to the Ninth Circuit. Oracle wrote three detailed paragraphs describing the case, the

issues on appeal, and proceedings in related tribunals, but did not include a word of any

settlement. Id.

The Court also may take judicial notice of information on government agency

websites, like the SECs EDGAR database, which contains public company filings with the

SEC. See OEC 201; Webster v. Aramark Corr. Servs., No. 3:14-CV-00652-AC, 2014 WL

10

7405656, at *4 (D Or Dec. 23, 2014) (citing Lee v. City of Los Angeles, 250 F3d 668, 689

11

(9th Cir 2001)); Molina v. Washington Mut. Bank, No. 09-CV-00894-IEG-AJB, 2010 WL

12

431439, at *3 (SD Cal Jan. 29, 2010) (taking judicial notice of information on FDIC website;

13

[i]nformation on government agency websites has often been treated as properly subject to

14

judicial notice.).

15

On December 18, 2015, two months after Oracle claims it settled with the State,

16

Oracle filed its 10-Q report with the SEC. (12/18/2015 Oracle 10-Q, Wilson Decl Ex 4.) On

17

pages 24 and 25 of that 10-Q, Oracle included five detailed paragraphs describing its

18

litigation with the State. Oracle disclosed nothing about a settlement. Instead of notifying its

19

investors that it believed this billion dollar lawsuit had been conclusively settled, Oracle told

20

them [w]e believe that we have meritorious defenses against this action, and will continue to

21

vigorously defend it. (Id. at 24-5.) If a settlement had occurred, Oracles failure to report

22

such a material fact in its 10-Q would also likely have violated federal securities laws. See

23

e.g., U.S. S.E.C. v. Fehn, 97 F3d 1276, 1289-90 (9th Cir 1996) (noting that Section 15(d)

24

requires filer to disclose material information in its Form 10-Q to make the required

25

statements in the light of the circumstances under which they are made not misleading). If a

26

corporation fails to disclose the terms of a settlement agreement in its filings, that material

Page

8-

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

omission can constitute a violation of Rule 10b-5. In re Bristol Myers Squibb Co. Sec. Litig.,

586 F Supp 2d 148, 161 (SDNY 2008) ([t]hus, while the market believed that Bristol-Myers

maintained its full arsenal of statutory weapons, in reality, it had secretly agreed to an arms

limitation.)

All of this strongly suggests Oracle does not actually believe a settlement occurred.

Oracle did not enter into any settlement with the Governors Chief of Staff because only the

Oregon DOJ could settle the Attorney Generals claims.

LEGAL STANDARD

In considering a motion to dismiss under ORCP 21 A(8), the court assumes the truth

10

of all of the well-pleaded allegations in the claim and gives plaintiffs the benefit of all

11

favorable inferences that may be drawn from the facts alleged. Gafur v. Legacy Good

12

Samaritan Hosp. & Med. Ctr., 344 Or 525, 529 (2008). But the court should disregard any

13

allegations that state conclusions of law. Id. Even under this lenient standard, Oracles claim

14

fails. In considering a motion to dismiss under ORCP 21 A(3) and the doctrine of comity,

15

the court may consider evidence outside the pleadings. Lee v. Mitchell, 152 Or App 159, 163

16

(1998). The same is true under ORCP 21 A(7) (stating that court may consider matters

17

outside the pleadings including declarations and other evidence.)

18
19

ARGUMENT
I.

20

The Governors Chief of Staff has no authority to settle the litigation with
Oracle.
A.

21

The Governors Chief of Staff has no authority to settle claims belonging


to the Attorney General.

22

Oracles complaint alleges that Mr. Shipley, as Chief of Staff to the Governor,

23

brokered a deal to settle claims brought by several state agencies and claims belonging to the

24

Attorney General. But the Attorney General is an independently elected official who does

25

not answer to the Governor. The Governors Chief of Staff has no authority over the

26

Attorney General or her agency, the DOJ.

Page

9-

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

The complaint asserts that Mr. Shipley enter[ed] into a global settlement agreement

resolving all claims and disputes between the State and Oracle. (Compl 16.) The first

step of the alleged settlement is that the Attorney General would dismiss the Oracle

Employees from the Rosenblum Action immediately *** prior to any announcement of a

settlement. (Compl 16(a).) Thereafter, the complaint says, a settlement would be

announced and the parties would exchange mutual litigation dismissals for consideration to

be paid by Oracle.

8
9

Mr. Shipley, as the Governors Chief of Staff, had no authority with respect to the
Attorney Generals claims, which include claims against the individual Oracle Employees.

10

In Rosenblum, the Attorney General brings six claims (the Third through Seventh and Ninth)

11

under the Oregon False Claims Act (OFCA). 2 By statute, the Attorney General has

12

exclusive authority to prosecute violations of OFCA. That Act provides that [t]he Attorney

13

General may bring a civil action in the name of the State of Oregon against a person who

14

makes false claims. ORS 180.760(1). The Attorney General also brings one claim (the

15

Fourteenth) under the Oregon Racketeer Influenced and Corrupt Organizations Act. Under

16

ORS 166.725(5), the Attorney General brought this ORICO claim under her own authority.

17

The Governors Chief of Staff had no authority to settle any of the Attorney Generals seven

18

claims. Accordingly, because the litigation involves claims that, by statute, belong

19

exclusively to the Attorney General, the States lawsuit against Oracle cannot be settled

20

without the Attorney Generals participation and approval.

21
2

22
23
24
25
26

Page

Here is a list of the claims from the States First Amended Complaint: First Claim
DHS and OHA v. Oracle (Fraud); Second Claim Cover Oregon v. Oracle (Fraud); Third
Claim Attorney General v. Oracle (False Claims Act); Fourth Claim Attorney General v.
Catz (False Claims Act); Fifth Claim Attorney General v. Budnar (False Claims Act); Sixth
Claim Attorney General v. Bartolo (False Claims Act); Seventh Claim Attorney General
v. Kim (False Claims Act); Eighth Claim Dropped; Ninth Claim Attorney General v.
Curry (False Claims Act); Tenth Claim DHS and OHA v. Oracle and Mythics (Breach of
Contract); Eleventh Claim DHS and OHA v. Oracle (Breach of Contract); Twelfth Claim
Cover Oregon v. Oracle (Breach of Contract); Thirteenth Claim DHS, OHA, and Cover
Oregon v. Oracle (ORICO); Fourteenth Claim Attorney General v. Oracle (ORICO).

10 -

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

B.

The Governors Chief of Staff cannot represent State agencies with


respect to litigation.

2
If Oracles complaint is to be believed, Mr. Shipley, the Governors non-lawyer Chief

3
4
5
6
7
8

of Staff, took it upon himself to represent state agencies in settlement negotiations. The
plaintiffs in Rosenblum are: Attorney General Ellen Rosenblum, the Oregon Health Authority
(OHA), the Oregon Department of Human Services (DHS), and the Oregon Health Insurance
Exchange Corporation (which has been absorbed by the Oregon Department of Consumer
and Business Services) (DCBS). Only the DOJ can represent state agencies.
Oregon law makes it clear that the DOJ has the authority to conduct all aspects of

9
10
11
12
13

litigation on behalf of state agencies. ORS chapter 180 governs the duties and
responsibilities of the Attorney General and the DOJ. ORS 180.060 generally describes the
duties of the Attorney General. ORS 180.220 describes the powers, duties, and
responsibilities of the DOJ in conducting the States legal affairs.
ORS 180.220(1)(a) states that the DOJ shall have [g]eneral control and supervision

14
15
16
17
18
19

of all civil actions and legal proceedings in which the State of Oregon may be a party or may
be interested. Section (1)(b) of the same statute says that the DOJ shall have [f]ull charge
and control of all the legal business of all departments, commissions and bureaus of the state,
or of any office thereof, which requires the services of an attorney or counsel in order to
protect the interests of the state.
The Oregon Supreme Court examined this statute at length in Frohnmayer v. State

20
21
22
23
24
25
26

Page

Acc. Ins. Fund Corp., 294 Or 570, 576 (1983). In Frohnmayer, the Supreme Court refused to
allow SAIF to employ outside counsel to file suit on SAIFs behalf, without the authorization
of the Attorney General. The Supreme Court read ORS 180.220 expansively. The text of the
statute, the court said, compels the conclusion that all of the states legal affairs, whether
included within the term civil actions and legal proceedings [] or within the term legal
business [], remain under the charge, control and supervision of the Department of Justice.

11 -

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

Frohnmayer, 294 Or at 577-78. The court could hardly have interpreted the statute more

broadly. The DOJ has control over all of the legal affairs of state agencies, regardless of

whether they involve lawsuits or other legal business.

The Oregon Court of Appeals reaffirmed Frohnmayers broad reading of ORS

180.220 in Hanggi on Behalf of Oregon Pub. Employees Ret. Fund v. Hartford Fire Ins. Co.,

132 Or App 601, 611 (1995), rev dismissed, 322 Or 573 (1996). In Hanggi, private parties

purported to assert derivative claims on OPERFs behalf without seeking the Attorney

Generals approval. Hanggi held that allowing private parties to prosecute derivative suits on

an agencys behalf would abrogate the Attorney Generals omnibus and exclusive authority

10

to represent the state and its agencies. Hanggi, 322 Or at 611. See also Johnson v. SAIF

11

Corp., 343 Or 139, 151 (2007) (reaffirming that State of Oregons legal representation is

12

subject to the [g]eneral control and supervision of the Department of Justice); Oregon State

13

Bar v. Wright, 96 Or App 375, 378 (1989) revd in part, 309 Or 37 (1990) ([w]ithout a

14

legislative exclusion or an exception by the Attorney General, all legal affairs of the state

15

must be handled by the Department of Justice.).

16

It should go without saying that the legal affairs of the State include negotiating a

17

settlement of a billion-dollar lawsuit. According to the complaint (however implausible),

18

Mr. Shipley negotiated legal terms of art. The supposed settlement they negotiated included

19

dismissing claims with prejudice and without costs or fees to any party, dismissing

20

pending claims and counterclaims, and releasing all known and unknown claims against

21

Oracle and Mythics, and their current and former employees or agents, concerning, relating

22

to, or arising out of the Modernization Project and the HIX Project. (Compl 16.)

23

Assuming the truth of Oracles allegations that Mr. Shipley hammered out legal

24

wording, the scope of a release, and the sequence of exchanging consideration, he was

25

clearly engaged in conducting state agencies legal affairs without authorization. The

26

complaint claims (incorrectly) that Mr. Shipley said the AGs participation was not needed

Page

12 -

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

for the negotiations. (Compl 13.) But it does not allege that Mr. Shipley was an agent of,

or had authority to negotiate on behalf of, the agency-parties in Rosenblum OHA, DHS,

and DCBS much less the Attorney General. And Oregon statutes and case law make clear

that only the DOJ may represent state agencies in legal matters. Even if Oracle had alleged

that Mr. Shipley had authority to negotiate on behalf of the agencies that are parties to

Rosenblum, he would have lacked any such authority as a matter of law.

C.

Oracle is charged with knowing the limits of state officials authority. Oregon law is

Knowledge of the extent of Mr. Shipleys authority is imputed to Oracle.

clear that parties cannot rely upon the statements of state employees who lack statutory

10

authority. In Does 1-7 v. State of Oregon, 164 Or App 543, 560 (1999), rev den, 330 Or 138

11

(2000), the plaintiffs alleged that the state was bound by promises of confidentiality of birth

12

records made by individuals who the plaintiffs claimed were acting as agents for the state.

13

The court rejected that argument, noting that, even if the representations had been made by

14

agents of the state, agents may not bind the state to any arrangement that contravenes the

15

statutes. Id. The court went on to state that if agents were without authority to make such

16

a promise, then it is a promise that cannot be enforced. Id. For that proposition, the court in

17

Does 1-7 relied on Harsh Inves. Corp. v. State Hous. Div., 88 Or App 151, 158 (1987), rev

18

den, 305 Or 273 (1988), which, in turn had held that [t]hose who deal with state officers

19

must know the extent of their authority and cannot claim by estoppel what they could not

20

receive by contract. See also Rise v. Board of Parole, 304 Or 385, 390-91 (1987). In the

21

absence of statutory authority, statements of one government agency cannot bind another.

22

And any settlement of the Attorney Generals claims by the Governors Chief of Staff

23

would have been contrary to J.J. & L. Properties, Inc. v. Henry, 122 Or App 395 (1993). In

24

J.J. & L. a developer wanted to build an industrial park near an airport. The developer

25

negotiated with the airport director and the county board of commissioners to obtain approval

26

of the project. The developer believed he had obtained approval for the project from county

Page

13 -

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

representatives. The agreement required the express approval of the county commissioners.

After the purported agreement was reached, the commissioners rejected the developers

proposal. The developer sued the county for breach of an oral contract. The Court of

Appeals held that no contract was formed because the commissioners did not give the

necessary approval. Id. at 398. J.J. & L. stands for the proposition that government

employees who signal their intent to enter an agreement cannot bind a government to the

agreement where approval from elected officials is ultimately needed to consummate the

agreement.

Oracles claim relies on allegations concerning what Mr. Shipley supposedly said to

10

Mr. Glueck. However, if Oracle wanted to negotiate a settlement of its litigation with the

11

State, ORS 180.220 means that Mr. Glueck had to do so with the DOJ. ORS 180.760(1) and

12

ORS 166.725(5), which delegate the power to prosecute OFCA and ORICO claims to the

13

Attorney General, and ORS 180.760(1), which permits only the Attorney General to

14

represent state agencies in legal matters, mean that the Governors Chief of Staff could not

15

have settled the Attorney Generals claims under the OFCA or ORICO. And under the

16

holdings in Harsh, Does 1-7, Rise, and J.J. & L., Mr. Shipley could not bind the DOJ. Any

17

deal to settle the lawsuits without the approval of the Oregon DOJ is void, and Oracle is

18

charged with that knowledge. 3

19

II.

The State is immune from suit.

20

The State, as a sovereign, is immune from suit absent a statutory waiver. Because

21

the doctrine of sovereign immunity is implicit in the Oregon Constitution, a court may not

22

abolish the doctrine; instead, the doctrine may only be waived or altered by the legislature

23

pursuant to a general law. Clarke v. Oregon Health Scis. Univ., 343 Or 581, 594 (2007)

24
3

25
26

Page

As a matter of law, the extent of Mr. Shipleys authority is imputed to Oracle.


However, although not a basis for this motion, the State also notes that it expressly told
Oracle on multiple occasions that settlement discussions for the lawsuits should be directed
to and concluded with DOJ.

14 -

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

(quotations and citations omitted). Here, the only possible statutory waiver of sovereign

immunity would be in ORS 30.320. However, by its terms, ORS 30.320 does not apply

because it waives immunity only for an action against the State of Oregon by and through

and in the name of the appropriate state agency upon a contract * * * made by such agency

and within the scope of its authority.

In order for sovereign immunity to be waived under this statute, Oracles complaint

would need to allege that state agencies entered into a contract, and that they did so acting

within the scope of [their] authority. If an agency making a contract has no authority to do

so, sovereign immunity is not waived. As explained above, Oracle does not allege that the

10

Attorney General or any of the State agencies that brought claims agreed to the alleged

11

settlement agreement. Although the complaint does allege that Mr. Shipley formed a

12

contract with Oracle, for the reasons explained above, forming a contract to settle claims

13

belonging to the Attorney General, DCBS, OHA, and DHS was not within the scope of [his]

14

authority. Therefore ORS 30.320 does not provide a waiver of sovereign immunity.

15

III.

The terms of the alleged settlement are too vague to be specifically enforced.

16

As a matter of law, the Court cannot order specific performance of the vague,

17

sweeping terms Oracle alleges in its complaint. To obtain specific performance, Oracle must

18

establish that it entered into a contract that is definite in all material aspects, with nothing

19

left to future negotiation except details of performance that are subordinate to the material

20

terms. Johnstone v. Zimmer, 191 Or App 26, 34 (2003). This is because a party cannot be

21

required to perform material terms to which it did not agree. Id. at 34.

22

A term is material to an enforceable agreement when it goes to the substance of the

23

contract and, if breached, defeats the object of the parties in entering into the agreement. Id.

24

For example, material terms include the designation of the parties, the identification of the

25

property to be exchanged, the promise to sell or buy, the price and how it will be paid, and a

26

fixed time and place for delivery. Dalton v. Robert Jahn Corp., 209 Or App 120, 139-40

Page

15 -

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

(2006). A material term is considered definite when it is defined explicitly or where the

parties specified a canon or method by which the missing term could be supplied by the

court. Id. at 140. A court can only enforce an agreement that is so definite in its material

terms that it can frame a decree to compel performance. Id. at 139; see Miller v. Ogden, 134

Or App 589, 594-95 (1997) (affirming denial of specific performance where the

memorandum did not address certain substantive concerns of the parties, the form of sale,

and other disputed matters.) Thus, if the parties have not agreed on the quid pro quo for the

settlement, such as how to measure the consideration provided in exchange for termination of

the pending claims, specific performance is improper. Johnstone, 191 Or App at 35-36.

10

The vagueness of Oracles supposed settlement precludes specific enforcement.

11

Oracle claims that it agreed to provide the State with $5 million in credit toward hosting

12

services. (Compl 16(c).) The alleged terms do not define the nature of those hosting

13

services, the agency or agencies that might receive credits or the means of calculating those

14

credits (wholesale prices? discounted prices? list prices?). Oracle also claims that it agreed

15

to provide $10 million in credits toward software licenses to be used at the States

16

discretion. (Id.) The same infirmities apply to this allegation. Which agencies would

17

benefit from these credits, how would they be calculated, and what software licenses would

18

be subject to the credits? The supposed settlement does not answer those questions.

19

Next, Oracle alleges that it agreed to enter into a program which Mr. Glueck and Mr.

20

Shipley referred to as an Oregon technology partnership (the Program). (Id.) Under this

21

Program, Oracle agreed to provide computer science education and related resources to the

22

States public high schools and community colleges. (Id.) Supposedly, Oracle committed

23

to providing the State with funding for full-time staff, resources, licenses, services, and

24

curriculum to expand state-wide the availability of computer science education, a

25

contribution amounting to significantly more than $10 million in value. (Id.) How much

26

more than $10 million was this worth? How would the value be measured? Would Oracle

Page

16 -

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

pay significantly more than $10 million (and if so, how much more)? Or is this a

commitment to provide a program worth significantly more than $10 million (whatever

that means)? Would Oracle make payments to the Department of Education or to schools

directly? How would this program be administered, and who would administer it? Does the

State, or some agency within it, have the ability to terminate the deal if Oracle failed to

perform? Oracle supplies no specific terms that would support a decree.

Oracle also claims that it agreed to approach other large technology companies in

Oregon to expand the programs scope. (Id.) Which large technology companies was

Oracle supposed to approach? How would those companies expand the program? How

10

much would these unspecified large companies expand the program? To put these questions

11

differently, how would one determine Oracles performance or breach of an unspecified

12

commitment to approach other large technology companies?

13

Agreements to agree on material terms in the future do not constitute binding

14

contracts. Dalton, 209 Or App at 133. Even if Mr. Shipley and Mr. Glueck had the

15

conversation as Oracle alleges, all they did was talk about the general outlines of a deal that

16

might be fleshed out in the future. A court of equity cannot, under the guise of filling gaps

17

make the contract which it thinks the parties would have agreed to. Booras v. Uyeda, 295

18

Or 181, 193 (1983). Even taking all of Oracles allegations as true, Oracle has not alleged

19

the terms of a contract with sufficient detail to entitle it to specific performance. The Court

20

should dismiss Oracles complaint for failure to state a claim.

21

IV.

22

The Court should dismiss the complaint under ORCP 21 A(8) because Oracle
does not allege it had authority to waive Mythics or the individual defendants
rights to costs.

23

In Rosenblum, the Attorney General brought claims against five individual

24

defendants, and two state agencies brought a claim against Mythics. Oracles complaint

25

alleges that the State agreed to dismiss the Oracle Employees from the Rosenblum Action

26

immediately, with prejudice and without costs or fees to any party. (Compl 16.a.) It also

Page

17 -

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

alleges that the State agreed to dismiss without fees or costs all claims against any party

including its claims against Mythics. (Compl 16.b.)

These would have to be mutual dismissals, with each of those six defendants giving

up any claim or right they might have had. Upon voluntary dismissal by plaintiffs, each of

those six defendants would be prevailing parties entitled to costs and disbursements under

ORCP 68B, which says that costs and disbursements shall be allowed [i]n any action.

See also ORCP 54 A(3) (judgment upon voluntary dismissal may include costs and

disbursements.) The State does not have the right to negotiate away or waive any rights of

those six defendants. Nor does Oracle allege that it had the authority to waive the rights of

10

any other defendants. Oracle cannot obtain specific performance because it has not alleged

11

that it had the necessary authority to enter into a deal that would terminate all rights of all

12

defendants. See e.g., Johnson v. Tesky, 57 Or App 133, 136-37 (1982) (authority to

13

negotiate with the opposing party does not, by itself, imply the power to reach a binding

14

agreement; the clients express authorization is necessary); Gaffi v. Burns, 278 Or 327, 332

15

(1977) (buyer must show seller had authority to agree on behalf of sellers spouse in order to

16

obtain specific performance). Oracles failure to allege that it had authority to waive the

17

rights of the individual defendants and Mythics is another ground for dismissal under ORCP

18

21 A(8).

19

V.

The Court can dismiss this complaint under ORCP 21 A(3) and as a matter of
comity, and let Judge Geyer deal with the purported settlement in Rosenblum.

20
A party should not be required to defend a case when there is another action pending

21
22
23
24
25
26

Page

between the same parties for the same cause * * *. ORCP 21 A(3). ORCP 21 A(3)
requires dismissal under the circumstances it specifies. Webb v. Underhill, 174 Or App
592, 597 (2001) (emphasis in original.) The parties may present evidence outside the
pleadings in support of or opposition to a motion under the rule. Lee v. Mitchell, 152 Or App
159, 163 (1998). The determining issue is whether a judgment in the first action would have

18 -

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

preclusive effect in the other case. Eli v. Lampert, 194 Or App 280, 285 (2004) rev den, 338

Or 57 (2005).

Preclusive effect is exactly what Oracle seeks here. By bringing this action for

specific performance of a purported settlement, Oracle hopes to shut down all of the

litigation it has with the State of Oregon and to eliminate its exposure in Rosenblum. If it

were to win here, theoretically, all the other cases would have to be dismissed per the terms

of the bogus settlement agreement. (Compl 16a, 16b.) This posture alone requires

dismissal of this lawsuit under ORCP 21 A(3).

A similar doctrine of comity developed in the federal courts and may be applied here.

10

See Barapind v. Reno, 225 F3d 1100, 1109 (9th Cir 2000) (noting district court has discretion

11

to dismiss an action to avoid duplicative litigation and promote judicial efficiency). Under

12

the federal doctrine, the interests of comity, efficiency, and judicial economy give district

13

courts discretion to transfer, stay, or dismiss the more recently filed of two substantially

14

similar actions pending in different courts, especially when they involve the same parties.

15

Herer v. Ah Ha Pub., LLC, 927 F Supp 2d 1080, 1088 (D Or 2013) (internal quotation and

16

citations omitted). A court should analyze three factors: (1) the chronology of the actions;

17

(2) the similarity of the parties; and (3) the similarity of the issues. Id. A court should also

18

take into account equitable considerations, such as whether the filing indicates forum

19

shopping or bad faith. Id.

20

Although Oregon state courts have not explicitly applied this doctrine, the reasoning

21

is similar to the policy behind ORCP 21 A(3). The parties and issues in this case,

22

Rosenblum, and the other cases Oracle seeks to dismiss are functionally the same. Oracle

23

filed this case three months after the supposed settlement after repeatedly behaving as if no

24

settlement existed. Filing a new lawsuit, rather than filing a motion in Rosenblum to enforce

25

the supposed settlement, is bad faith forum shopping. ORCP 1 states that the Oregon Rules

26

Page

19 -

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

shall be construed to secure the just, speedy, and inexpensive determination of every

action. The only way to accomplish those goals here is to dismiss this action.

VI.

The Court can dismiss the complaint under ORCP 21 A(7) because the
individual defendants and Mythics are necessary parties who are not before the
Court.

Under ORCP 21 A(7), the Court may dismiss the complaint for failure to join a party

under ORCP 29. ORCP 29 A requires the joinder of all persons in whose absence complete

relief cannot be obtained. Without those necessary parties, the Court can dismiss this

complaint under the factors listed in ORCP 28 B. 4 This Court would not be able to fashion a

decree that put the supposed settlement into effect unless it had the five individual defendants

10

and Mythics before it. If this complaint is dismissed, those defendants, as well as Oracle

11

itself, have an adequate remedy available to them in the form of a motion to enforce the

12

supposed settlement in Rosenblum. ORCP 21 A(7) and ORCP 29 B provide additional

13

grounds for dismissal.

14

CONCLUSION

15

Oracle has consistently behaved as if no settlement took place. Despite the clear

16

mandate of multiple court rules, Oracle has not notified any of the judges involved in these

17

cases that a settlement had been reached. The Governors then Chief of Staff had no

18

authority to settle claims that are exclusively within the Attorney Generals control. Oracle

19

does not allege it had authority to bargain away rights held by Mythics or the individual

20

defendants. Accordingly, the States sovereign immunity is intact. The terms of the

21

supposed settlement are so vague they constitute little more than a rough sketch for future

22

negotiations. For all of these reasons, Oracles complaint must be dismissed for failure to

23
4

24
25
26

Page

The factors in ORCP 28 B are: first, to what extent a judgment rendered in the
persons absence might be prejudicial to the person or those already parties; second, the
extent to which, by protective provision in the judgment, by the shaping of relief or other
measures, the prejudice can be lessened or avoided; third, whether a judgment rendered in the
persons absence will be adequate; [and] fourth, whether the plaintiff will have an adequate
remedy if the action is dismissed for nonjoinder.

20 -

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

state a claim. Alternatively, the Court should dismiss the complaint under ORCP 21 A(3)

and the doctrine of comity because the enforcement of any settlement, if one is ever reached,

should be before Judge Geyer in Rosenblum. Lastly, the Court can dismiss the complaint

under ORCP 21 A(7) for failure to join Mythics and the individual defendants as necessary

parties.

DATED this 17th day of February, 2016.

7
ELLEN ROSENBLUM
ATTORNEY GENERAL
FOR THE STATE OF OREGON

8
9
10

By:
11
12
13
14
15

Special Assistant Attorneys General for


Defendants

16
17

/s/ Lisa A. Kaner


David B. Markowitz, OSB #742046
DavidMarkowitz@MarkowitzHerbold.com
Lisa A. Kaner, OSB #881373
LisaKaner@MarkowitzHerbold.com
Dallas DeLuca, OSB #072992
DallasDeLuca@MarkowitzHerbold.com
Harry B. Wilson, OSB #077214
HarryWilson@MarkowitzHerbold.com

507868

18
19
20
21
22
23
24
25
26

Page

21 -

DEFENDANTS MOTION TO DISMISS PURSUANT TO


ORCP 21 A(8), ORCP 21 A(7), and ORCP 21 A(3)

ATTORNEY GENERAL ELLEN ROSENBLUM


MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085

ATTORNEY CERTIFICATE OF SERVICE


I hereby certify that on February 17, 2016, I have made service of the foregoing
DEFENDANTS MOTION TO DISMISS PURSUANT TO ORCP 21 A(8), ORCP 21
A(7), and ORCP 21 A(3) on the party/ies listed below in the manner indicated:
Milo Petranovich
Pilar C. French
Lane Powell PC
601 SW Second Ave., Suite 2100
Portland, OR 97204-3158

U.S. Mail
Facsimile
Hand Delivery
Overnight Courier
Email: PetranovichM@lanepowell.com
FrenchP@lanepowell.com
docketing-pdx@lanepowell.com
Via Odyssey eFile & Serve

Robert S. Shwarts (pro hac vice pending)


Karen G. Johnson-McKewan (pro hac vice
pending)
Erin M. Connell (pro hac vice pending)
Orrick, Herrington & Sutcliffe LLP
405 Howard Street
San Francisco, CA 94105

U.S. Mail
Facsimile
Hand Delivery
Overnight Courier
Email: rshwarts@orrick.com
kjohnson-mckewan@orrick.com
econnell@orrick.com
Via Odyssey eFile & Serve

Michael C. Weed (pro hac vice pending)


Orrick, Herrington & Sutcliffe LLP
400 Capitol Mall, Suite 3000
Sacramento, CA 95814

U.S. Mail
Facsimile
Hand Delivery
Overnight Courier
Email: mweed@orrick.com
Via Odyssey eFile & Serve

Attorneys for Plaintiff

DATED this 17th day of February, 2016.

/s/ Lisa A. Kaner


Lisa A. Kaner, OSB #881373
Special Assistant Attorney General for
Defendants

CERTIFICATE OF SERVICE