Académique Documents
Professionnel Documents
Culture Documents
2
3
4
No. 16CV01760
Honorable Sean E. Armstrong
Plaintiff,
8
vs.
9
10
11
12
13
14
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
TABLE OF CONTENTS
Page
MOTION................................................................................................................................... 1
INTRODUCTION .................................................................................................................... 1
BACKGROUND ...................................................................................................................... 2
8
9
10
I.
II.
III.
The Court can take judicial notice of the ways in which Oracle has
behaved as if the parties did not settle. ............................................................. 5
11
12
ARGUMENT ............................................................................................................................ 9
13
14
I.
A.
B.
C.
II.
III.
IV.
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-
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 -
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
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
22
23
In re Conduct of Ellis,
356 Or 691 (2015) ......................................................................................................... 7
24
25
26
Page
iii -
2
3
Cases
5
6
Johnstone v. Zimmer,
191 Or App 26 (2003) ........................................................................................... 15, 16
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
20
21
22
23
24
25
26
Page
iv -
2
3
4
5
Cases
Rosenblum v. Oracle America, Inc.,
Oregon Supreme Court S063490 .................................................................................. 6
7
8
10
11
12
Statutes
13
OEC 201................................................................................................................................ 7, 8
14
15
16
17
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-
2
3
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
12
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
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-
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
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
19
20
BACKGROUND
I.
21
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-
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
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
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-
1, at 9.)
3
4
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
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
13
14
15
16
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-
that trial in Rosenblum is set for 2017. Oracle failed to mention that the case
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
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
12
13
dollars for fraud, false claims and breach of contract in bungling Oregons
14
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
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
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
5-
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.)
10
11
12
13
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
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-
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
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-
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-
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
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
18
19
ARGUMENT
I.
20
The Governors Chief of Staff has no authority to settle the litigation with
Oracle.
A.
21
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
Page
9-
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
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
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 -
B.
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 -
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
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
16
It should go without saying that the legal affairs of the State include negotiating a
17
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 -
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
C.
Oracle is charged with knowing the limits of state officials authority. Oregon law is
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 -
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
19
II.
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
14 -
(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
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
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 -
(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
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
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 -
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
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
12
13
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
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
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 -
alleges that the State agreed to dismiss without fees or costs all claims against any party
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 -
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
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
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 -
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
13
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 -
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.
7
ELLEN ROSENBLUM
ATTORNEY GENERAL
FOR THE STATE OF OREGON
8
9
10
By:
11
12
13
14
15
16
17
507868
18
19
20
21
22
23
24
25
26
Page
21 -
U.S. Mail
Facsimile
Hand Delivery
Overnight Courier
Email: PetranovichM@lanepowell.com
FrenchP@lanepowell.com
docketing-pdx@lanepowell.com
Via Odyssey eFile & Serve
U.S. Mail
Facsimile
Hand Delivery
Overnight Courier
Email: rshwarts@orrick.com
kjohnson-mckewan@orrick.com
econnell@orrick.com
Via Odyssey eFile & Serve
U.S. Mail
Facsimile
Hand Delivery
Overnight Courier
Email: mweed@orrick.com
Via Odyssey eFile & Serve
CERTIFICATE OF SERVICE