Lance Bellers - Fotolia

State entitled to sue Oracle execs in Cover Oregon case

The Oregon Supreme Court rejected Oracle's request to overturn a lower court decision, ruling that Oracle executives in the Cover Oregon case can be tried in their personal capacities.

The Oregon Supreme Court decided that Oregon can pursue its suit over the collapse of the Cover Oregon healthcare exchange against not only Oracle, but also six of the company's current and past executives in their personal capacities, including co-CEO Safra Catz.

The Supreme Court's denial of this plea could cause trouble for both sides. Oracle is faced with the problem of defending not only itself, but also making sure its employees' names are cleared to keep Oregon's allegations from sticking. Meanwhile, Oregon is attracting some ire from independent business and technology interests who worry that the state's decision could scare away investors.

In August, Oregon Attorney General Ellen Rosenblum announced that the state was suing Oracle and the executives involved in the Cover Oregon project -- Ravi Puri, Stephen Bartolo, Thomas Budnar, Kevin Curry, Brian Kim and Catz. The state alleges these executives were personally involved in fraud and racketeering related to the controversial Cover Oregon project. A trial judge in Marion County, Ore., where the lawsuit is taking place, ruled that the state could, in fact, sue individual Oracle executives for actions they took on behalf of the company. In September, Oracle petitioned the Oregon Supreme Court to overturn this ruling and exempt Catz and her co-defendants from the case. Industry groups also pushed for keeping the execs out.

The Supreme Court's denial of this plea could cause trouble for both sides.

In September, the U.S. Chamber of Commerce, TechNet, IT Acquisition Advisory Council and IT Alliance for Public Sector together filed a "friend of the court" brief, asking the judges to overturn the Marion County court's decision. Catz serves as a member of the executive council at TechNet, a lobbyist for the high-tech industry.

In the brief, the organizations argued that if individual executives are allowed to be named in corporate-related lawsuits, the result may be one in which companies are less likely to do business in the state, according to a prior article in the Portland Business Journal.

Currently, the Oregon Supreme Court has issued no statement regarding the reasoning behind its Oct. 8 decision. Oracle is suing the state of Oregon in the federal court, while the attorney general's case in the Oregon state court continues.

Next Steps

The state of Oregon cut all ties to Cover Oregon after the project failed

An Oregon judge threw out Oracle's lawsuit against the governor's advisers

Oracle took its copyright lawsuit with Google to the U.S. Supreme Court

Dig Deeper on Oracle governance, risk and compliance