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Oracle's claim of $25 million settlement by Gov. Kate Brown has legs, judge rules.

A long-shot effort by Oracle to kill Oregon’s big-money racketeering lawsuit over the Cover Oregon debacle has survived an initial court challenge, and that may not be great news for Gov. Kate Brown.

WIKIPEDIA/ORACLE - Oracle cofounder Larry Ellison would have a nagging p.r. problem go away if the company's claim that Oregon settled the case is upheld in court.

In January, Oracle filed a lawsuit claiming that aides to Brown last fall reached an oral agreement with the company to settle the state’s billion-dollar racketeering and fraud case over the Cover Oregon technology debacle for $25 million in Oracle products and services.

In response, Brown denied reaching a settlement, and Attorney General Ellen Rosenblum argued in court that only she, not Brown, had the authority to settle the lawsuit that Rosenblum, the state’s independently elected top lawyer, had filed.

Rosenblum filed a motion to dismiss, trying to knock Oracle’s lawsuit out of court.

In an April 28 ruling, however, Marion County Circuit Judge Sean Armstrong rejected the argument that only Rosenblum could settle the case, as well as several related objections raised by the state’s lawyers. He wrote that he “cannot conclude that the Governor did not have authority to settle” the case.

The ruling means that the case will continue as Brown’s election battle heats up. Two Republican candidates, Bud Pierce and Allen Alley, are vying for the chance to oppose her in the general election.

"It's going to be a battle for who to believe," said David Friedman, a law professor at Willamette University who has tracked the case. "It's way too early to tell what's going to happen. All we know is that we're going to learn more... and this didn't go away."

"If I take what the governor's office has said at face value, this was not something they expected."

The Oracle case — and the notion that Brown settled it for just pennies on the dollar — could give Brown’s opponent something to chew on in the months leading up to the general election. Oracle's case suggests the settlement was reached by Brown without the knowledge or consent of Attorney General Ellen Rosenblum, whose lawyers knew the most about the case and the evidence they had on Oracle.

A $25 million settlement would also amount to a public relations victory for the California software giant. The comparatively paltry sum would have been portrayed as renouncing all that Rosenblum had said about the case’s gravity, and Oracle’s actions.

Rosenblum appears to think the case is worth signficantly more, as she rejected the notion of a $25-million settlement. She has already spent more than $7 milion on in outside legal fees pursuing the litigation.

Internal Oracle documents released thus far suggest that Oracle’s own employees were shocked at how poorly the project was designed and executed. One commented in an email that an “army” of Oracle programmers was “rapoing the state” — an apparent typo for the word “raping” – on a system “that will never work well.”

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

Oracle issued the following statement, attributed to spokesperson Deborah Hellinger.

"Oracle negotiated in good faith with the Governor to settle the lawsuits related to the Cover Oregon project, believing, as now confirmed by the court, that the Governor had the authority,"

"Far from the settlement being a "complete fabrication," as alleged by the Attorney General, we agreed on settlement terms and now will be able to prove it through prompt discovery of the Governor's and the Attorney General's offices.”

By Nick Budnick
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