Oracle America, Inc. v. Oregon Health Insurance Exchange Corp.

145 F. Supp. 3d 1018, 2015 U.S. Dist. LEXIS 155789, 2015 WL 7296233
District Court, D. Oregon·Decided November 18, 2015·No. 3:14-CV-01279-BR·Published·Cited by 2 cases

Opinion

OPINION AND ORDER

BROWN, District Judge

This matter comes before the Court on Defendant State of Oregon’s Motion (#92) for Summary Judgment, Plaintiff Oracle’s Cross-Motion (#104) for Summary Judgment, and the Motion (#142) of Defendant Department of Consumer and Business Services (DCBS) for Judgment on the Pleadings. For the reasons that follow, *the Court DENIES the State of Oregon’s Motion for Summary Judgment, GRANTS Oracle’s Cross-Motion for Summary Judgment, and GRANTS DCBS’s Motion for Judgment on the Pleadings.

BACKGROUND

The parties are familiar with the facts underlying this, action. The Court, therefore, sets forth only the facts relevant to the pending Motions.

At some point in 2009 the Oregon Legislature created the Oregon Health Authority (OHA) as a division of the Oregon Department of Human Services (DHS).

On March 23, 2010, Congress enacted the Patient Protection and Affordable Care Act (ACA), Public Law No. 111-148, 124 Stat. 119 (2010), and thereby established legal foundations for- States either to create health-insurance exchanges (HIX) or to use an HIX developed by the federal government.

The State of Oregon, through DHS/ OHA, ultimately decided to use Oracle to complete a Modernization Project and the HIX (the Oracle Solution). Initially, howev[1021] er, DHS/OHA entered into an agreement on June 30, 2011, only with Mythies, Ine., a corporation that works with Oracle to distribute and to sell Oracle products and to provide consulting on the implementation and integration of Oracle’s products. That agreement, the Mythies License and Services Agreement (MLSA),1 provided in pertinent part:

This agreement is governed by the substantive and procedural laws of Oregon, without giving, effect to such state’s principles of conflicts of laws, and you and Mythies agree to submit to the exclusive jurisdiction of, and venue in, the federal courts in Oregon, or the state courts in Salem, 0$ in any dispute arising out of or relating to this agreement.

Agreed Facts (#88), Ex. 7 at § 0.1.

In June 2011 ■ the Oregon Legislature passed legislation creating the Oregon Health Insurance Exchange Corporation (Cover Oregon)2 as a public corporation. Specifically, Oregon Revised Statute § 741.002(l)(a) provided Cover - Oregon shall “[ajdminister a health insurance exchange in accordance with federal law to make qualified health plans available to individuals and groups throughout this state.”

In November '2011 DHS/OHA entered into an Oracle License Service Agreement (OHA OLSA) with Oracle that provided in pertinent part:

This agreement is governed by the substantive and procedural laws of Oregon and you and Oracle agree to submit to the exclusive jurisdiction of, and venue in, if in state Courts, in the Circuit Court of the State of Oregon for Marion County or, if in federal courts, the United States District Court for the District of Oregon, in any dispute arising out of or relating to this agreement.

Agreed Facts (#88), Ex. 13 at § 0.1. The OHA OLSA was signed by the State of Oregon Chief Information Officer Carolyn Lawson, Oregon Assistant Attorney General Jack McDonald, DHS/OHA Office of Contracts and Procurement Officer Stella Transue, and Oracle Contracts Manager Elizabeth Hwang. Agreed Facts (#88), Ex. 13 at 25.

As noted, Cover Oregon was not a party to the MLSA or the OHA OLSA. On March 14, 2013, therefore, Cover Oregon and Oracle executed an Oracle License and Services Agreement (Cover Oregon OLSA) that provided in pertinent part:

This agreement is governed by the substantive and procedural laws of Oregon and [Cover Oregon] and Oracle agree to' submit to the exclusive jurisdiction of, and venue in, if in state Courts, in the Circuit Court of the State of Oregon for Marion County or, if in federal courts, the United States' District Court for the District of Oregon, in any dispute arising out of or relating to this agreement.

Second Am. Compl., Ex. B at ¶ 0.1. The Cover Oregon' OLSA was signed by Cover Oregon Executive Director Howard King and Oracle License Contracts Manager William Simpson. Second Am. Compl., Ex. B at 26. ’

In order for Oregonians to obtain insurance for 2014 as required by the ACA, Cover Oregon established the goal of launching the HIX by October 1, 2013. Although the HIX was not ready to launch at that time, Oracle and Cover Oregon worked to make the Oregon HIX useable and effective throughout 2013 and into 2014.

[1022] . On August 8, 2014, however, Oracle filed a Complaint against Cover Oregon in this Court basing federal jurisdiction on the parties’ diversity of citizenship and asserting claims for breach of contract and quantum meruit. Oracle alleged Cover Oregon has not paid for all of the services that Oracle rendered, “continued] to use Oracle’s work product[,] and ... has transferred some or all of that work product to others in violation of the parties’ written agreements.”

On August 22, 2014, Cover Oregon filed a Motion to Dismiss for Failure to State a Claim and Failure to Join Necessary and Indispensable Party. Specifically, Cover Oregon sought dismissal of the Federal Action because Oracle failed to sue the State of Oregon, who, according to Cover Oregon, was a necessary and indispensable party to the action.

On September 8, 2014, Oracle filed an Amended Complaint in which Oracle added Oregon as a defendant and asserted claims for copyright infringement against Cover Oregon and Oregon, breach of contract against Cover Oregon, breach of the implied covenant of good faith and fair dealing against Cover Oregon, and quantum meruit against Cover Oregon and Oregon.

On September 18, 2014, in light of Oracle’s allegations in its Corrected First Amended Complaint,3 the Court denied as moot Cover Oregon’s Motion to Dismiss for Failure to State a Claim and Failure to Join Necessary and Indispensable Party and directed Cover Oregon and/or Oregon to file any motions against the Corrected First Amended Complaint no later than October 2, 2014.

On October 2, 2014, Oregon and Cover Oregon each filed separate Motions to Dismiss Oracle’s Corrected First Amended Complaint as well as a Joint Motion to Dismiss or, in the Alternative, to Stay.

On December 19, 2014, the Court heard oral argument on Oregon’s Motion to Dismiss; the Joint Motion to Dismiss or, in the Alternative, to Stay filed by Oregon and Cover Oregon; and Cover Oregon’s Motion to Dismiss. The Court orally granted Oregon’s Motion to Dismiss, denied Cover Oregon’s Motion to Dismiss, and took the Joint Motion tó Dismiss under advisement.

Free access — add to your briefcase to read the full text and ask questions with AI

Oracle America, Inc. v. Oregon Health Insurance Exchange Corp., 145 F. Supp. 3d 1018, 2015 U.S. Dist. LEXIS 155789, 2015 WL 7296233 (D. Or. 2015).

145 F. Supp. 3d 1018 (Oracle America, Inc. v. Oregon Health Insurance Exchange Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related