Oracle Acquisition

Oracle on Monday lost a key battle in its legal war with the state of Oregon when a judge threw out Oracle's claim that state officials violated the state's public records act. Oracle, one of the world's largest software companies, was paid $240 million for the troubled Cover Oregon technology project. (AP Photo/Paul Sakuma, File)

(Paul Sakuma)

In a big win for Oregon Gov. Kate Brown, a Marion County judge on Wednesday indicated she was prepared to throw out Oracle's claims that the state violated the state's public records law when it withheld or delayed release of certain Cover Oregon-related emails from the software company.

"Oracle contends that the public records law permits it to litigate how a public agency searches for or maintains documents and that somehow the Governor's office's efforts fall short," Judge Mary Merten James wrote. "Oracle is wrong, both on the law and the facts."

Gov. Brown's office gushed over the victory. "It's a double win: Governor Brown is fully vindicated, and Oracle is foiled yet again in its repeated and desperate attempts to burden and harass the state and waste public resources," said Kristen Grainger, Brown's spokeswoman in an email.

Oregon sued Oracle in 2014 claiming the giant software operation defrauded the state when it billed Oregon $240 million for a Cover Oregon health insurance website that never worked. The state accused Oracle not only of fraud, but also of filing false claims and racketeering. It could collect $6 billion in damages.

Oracle has responded with a flurry of its own litigation, including the public records case. The dispute centered on whether Gov. Kate Brown Brown complied with state public records laws when her office and the Department of Justice delayed release and withheld some emails from her predecessor, John Kitzhaber.

Oracle had requested any and all Cover Oregon-related emails from the former Governor as part of the discovery process.

State officials said the Oracle litigation allows them to withhold some records.

Oracle claims it wasn't the only party pushing the state for broader disclosure.

In the main Cover Oregon lawsuit filed by the state against Oracle, the two sides have also scrapped over whether the state was improperly withholding some documents. Multnomah County Circuit Court Senior Judge Janice Wilson agreed to serve as a special master in the email dispute -- essentially acting as a referee to rule on which emails were private and which were legitimately subject to the public records law. Oracle claims the Governor's office and the justice department refused to hand over 42 different emails even after Wilson had ruled they should be disclosed.

In an Aug. 16 letter to Judge Courtland Geyer, Oracle lawyer Edward Siskel urged the judge to quickly force the state to hand over the emails. The company claimed six emails in particular were crucial as they involved Kitzhaber's top political consultants, Patricia McCaig, Tim Raphael and Kevin Looper. Oracle was scheduled to depose all three late this month.

Oracle maintains that it delivered a fully functional website but that Kitzhaber chose to abandon it for political reasons under the guidance of his political advisors.

"Unless expedited consideration is granted, the State will succeed in achieving its improper objective of delaying production of these critical documents until after Oracle has deposed the witnesses capable of providing testimony relevant to the documents," Siskel wrote.

How the battle plays out in the main case remains to be seen. But in the public records suit, Judge James enthusiastically sided with the state.

"The sheer mass of documents that required collection and review, the combination of personal and official emails, the need to conduct an individualized assessment of the content of each document all illustrate that the Office of the Governor and the Department of Justice responded as soon as practicable and without unreasonable delay," she wrote in her Wednesday ruling.

The main lawsuit pitting the state against Oracle is set for trial in January.

-- Jeff Manning

503-294-7606, jmanning@oregonian.com