knowledge & insights

River Supply v. Oracle: The Campsite is Left in Ruins

If you were a Girl Scout or Boy Scout back in the day, you were probably told by the Scoutmaster to leave the campsite better than you found it. What that meant, of course, was that you should not only clean up after yourself but be mindful of picking up debris left by others. Indeed, folklore has it that the last words of Sir Robert Baden-Powell, the founder of the Boy Scouts, were:

“Try and leave this world a little better than you found it and when your turn comes to die, you can die happy in feeling that at any rate you have not wasted your time but have done your best.”

We at Beeman & Muchmore believe that the same aphorism should apply to the world of commercial litigation, where private litigants slug it out to gain advantage over their adversaries. To be clear, fierce advocacy and zealous representation are our bread and butter. But we stand by the credo that, unavoidable uncertainties aside, the bare minimum goal for any litigant or advocate – especially for a plaintiff – should be to not leave things worse off for similarly situated parties in future lawsuits.

Unfortunately, the credo of Girl and Boy Scouts alike has been left in shambles by River Supply v. Oracle, whereas the court has handed down rulings and comments which will plague future licensees who elect to litigate against Oracle. Last November, we reported on the U.S. Magistrate Judge Laurel Beeler’s order in the River Supply case upholding the contractual viability of the Oracle clickwrap agreement, declining River Supply’s request to find the hyperlinked Subscription Services Agreement to be unconscionable and, instead, applying the agreement’s integration clause and limitation of liability provisions. In that order, Judge Beeler pointedly remarked:

“The pages are not confusing, they are not hidden, and the Agreement is easily available. River Supply’s agent may not have read the contract terms, but River Supply is bound by them.”

(Docket  61, 17:9-10.) As a result of this ruling, any future licensees contemplating litigation against Oracle that may require challenging the legally binding effect of Oracle’s byzantine clickwrap agreement, will, at minimum, now need to wrestle with the adverse precedential impact of Judge Beeler’s ruling.

When River Supply v. Oracle was filed a year ago, we expressed great concern on the complaint’s clarion call for war and the trumpeting that Oracle is systemically guilty of fraud, unfair business practices, and even criminal intent in the marketing and sale of ERP systems. Pouring gasoline on the campfire, the River Supply complaint alleged (and continues to allege):

“Because the scheme is so ubiquitous and widespread, it likely emanates from and has the approval of the highest echelons of Oracle’s management in California, Texas and elsewhere.”

(FAC, Paragraph 87; SAC, Paragraph 89.)

River Supply’s stoking the fire with claims of what is “likely” did nothing to prevent Judge Beeler from dismissing the claims for breaches of implied covenants, the UCL, and declaratory relief. While the fraud claim did survive Oracle’s motion to dismiss, which merely challenged the claim as alleged, the court provided the following withering observation:

“(T)he fraud allegations are weak: the timeline is confusing, and there were back-and-forth negotiations that suggest that representations about the products may have evolved.”

(Docket 77; 2:5-7.) The Court left River Supply’s claims of Oracle and NetSuite’s “massive fraudulent scheme” for a future summary judgment ruling. (Docket 77 and 89.) If those claims are ultimately dismissed by Judge Beeler on a motion for summary judgment (which, based on the Judge’s statements, seems likely), future litigants looking to prove their own allegations of fraud against Oracle will, because of the River Supply litigation, now have even stronger precedential currents to swim against.

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We are no strangers to the frustrations caused by Oracle installations, and we routinely counsel licensees to take a tough stance to enforce their rights. That said, though we have litigated a multitude of commercial litigation matters, including against Oracle, Beeman & Muchmore strongly leans towards being litigation adverse when interfacing with Oracle. Indeed, the lack of meaningful traction gained by the broad-brush claims made by River Supply only serve to reinforce our long-standing point of view. And, unfortunately, the campsite left by the River Supply lawsuit will likely require diligent and intelligent cleanup by future litigants who feel the need to square off against Oracle.

Published on June 26, 2024

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