A three-judge panel for the California Court of Appeal ruled yesterday that Oracle must abide by a $3 billion verdict for violating a settlement agreement with Hewlett-Packard Co by ending its development of software for use with HP’s Itanium server platform.
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The original 2010 settlement resolved a trade-secrets case brought by HP following Oracle’s hire of its former CEO, Mark Hurd. Oracle breached a provision of the deal that required it to continue to offer its software on HP owned platforms “consistent with that partnership as it existed prior to Oracle’s hiring of Hurd,” Justice Allison Danner wrote, affirming a 2016 jury verdict.
HP again sued Oracle in California state court in 2011 for allegedly refusing to continue offering its software months after the settlement of the breach and trade-secret claims based on its hiring of Hurd. Judge James Kleinberg ruled in favor of HP in 2012, finding the agreement required Oracle to continue to offer the products until HP halted selling Itanium-based servers.
A Santa Clara jury awarded HP over $3 billion in damages for breach in 2016.
Oracle’s argument on appeal was that the relevant part of the agreement “merely restates the historically voluntary, non-contractual relationship between Oracle and HP.”
But Danner, joined by Justices Mary Greenwood and Franklin Elia, stated the plain language of the agreement, the parties’ past dealings, and the circumstances surrounding the agreement required Oracle to continue its product offering on HP’s platform “as long as HP continued to sell the platform, as that practice existed before the Hurd dispute arose.”
The justices also rejected Oracle’s argument that the jury award wrongly included lost profits based on an expert’s “speculative and subjective” opinion of HP’s potential loss of market share.
The jury could consider Oracle’s arguments criticizing the expert’s methodology and calculations, but his evidence was still allowable, Danner said.
“Oracle’s conclusory reference to the right of petition, accompanied by neither argument nor application to the facts presented, is insufficient,” Danner said. “But even if we assume that Oracle’s statement of intent to appeal comes within the ambit of the Petition Clause of the First Amendment, Oracle offers no authority connecting the exercise of the right of petition in the context of a breach of contract claim.”
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Source: https://www.reuters.com/legal/transactional/oracle-loses-bid-upend-hps-3-billion-win-2021-06-14/
