2/13/2015 4:12:29 PM
15CV03287
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IN THE CIRCUIT COURT OF THE STATE OF OREGON
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FOR THE COUNTY OF MARION
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STATE OF OREGON, by and through the
Oregon Health Authority, and the Oregon
Department of Human Services,
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Plaintiff,
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10
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No._______________
COMPLAINT
(Promissory Estoppel and
Breach of Contract)
vs.
ORACLE AMERICA, INC., a Delaware
corporation, and
MYTHICS, INC., a Virginia corporation,
CLAIM NOT SUBJECT TO
MANDATORY ARBITRATION
(Prayer for Injunctive Relief)
12
Defendants.
Fee Authority: ORS 21.160(1)(d)
& 21.160(3)
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Plaintiff for its complaint against defendants alleges as follows:
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INTRODUCTION
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1.
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Oracle America, Inc. (“Oracle”) hosts the Oregon Health Authority’s (“OHA”)
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system for Medicaid-eligible citizens to enroll in Medicaid. In September 2014, Oracle
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promised that it would renew its contract to host that system while Oregon completed a
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project to transition to a long-term Medicaid enrollment solution. Relying on Oracle’s
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promise, OHA continues to use Oracle’s hosting services to enroll and re-enroll over 26,000
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Oregonians in Medicaid every week.
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2.
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Without warning, Oracle sent an email at the close of business February 5, 2015,
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announcing, without explanation, that contrary to its promise, it would not renew OHA’s
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contract and would terminate the hosting services at the end of February.
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COMPLAINT
ATTORNEY GENERAL ELLEN ROSENBLUM
MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085
1
3.
2
Oracle’s last-minute announcement has left OHA with no alternatives. There is not
3
sufficient time to find alternative hosting services for Oregon’s Medicaid enrollment system.
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If Oracle breaks its promise to renew its contract with OHA, the State will be unable to enroll
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its citizens in Medicaid. Oracle’s breach of its promise will effectively deny access to health
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care to hundreds of thousands of Oregon’s most vulnerable citizens. Without a court order
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restraining Oracle from shutting off OHA’s access to the Medicaid enrollment system the
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State and Oregonians will be irreparably harmed.
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JURISDICTIONAL ALLEGATIONS
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4.
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The Oregon Department of Human Services (“DHS”) is the State agency responsible
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for most of the State’s social service programs. Pursuant to ORS 179.040(2)(a), DHS has the
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authority to sue.
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5.
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The Oregon Health Authority (“OHA”) is the State agency responsible for managing
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most of the State’s health care programs, including the Oregon Health Plan, the State’s
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Medicaid program. Pursuant to ORS 179.040(2)(a), OHA has the authority to sue.
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6.
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Defendant Oracle America, Inc. (“Oracle”) is a Delaware corporation with its
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principal place of business in California. Oracle conducts business in offices in Portland,
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Oregon. This court has jurisdiction over Oracle pursuant to ORCP 4 (A)(4)-(5) and 4 (L)
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because Oracle is engaged in substantial activities within the state and has consented to the
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exercise of personal jurisdiction.
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7.
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Defendant Mythics, Inc. (“Mythics”) is a Virginia corporation with its principal place
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of business in Virginia. This court has jurisdiction over Mythics pursuant to ORCP 4 (A)(4)-
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COMPLAINT
ATTORNEY GENERAL ELLEN ROSENBLUM
MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085
1
(5), 4(C), 4(D), and 4 (L) because Mythics committed acts within and without Oregon giving
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rise to injuries to plaintiffs within Oregon and at the time of the injuries, service activities
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were carried on within Oregon on Mythics’ behalf, and because Mythics is engaged in
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substantial activities within the state and has consented to the exercise of personal
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jurisdiction.
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8.
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Subject matter jurisdiction is conferred on this Court by ORS 14.030 and 14.050(1).
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9.
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Venue in Marion County is proper pursuant to ORS 14.080(1) and (2) and
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ORS 14.050(1) because the cause of action arose in Marion County and because the address
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for Oracle’s registered agent is in Marion County. Venue is also proper in Marion County
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because Section O.1 of the Mythics License and Services Agreement signed by Mythics and
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the State provides for venue in the Circuit Court for the State of Oregon for Marion County.
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COMMON ALLEGATIONS
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10.
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Beginning in 2009, the State began a project to modernize its delivery of social
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services, such as Medicaid, Temporary Assistance for Needy Families (“TANF”),
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Employment Related Day Care (“ERDC”), and the Supplemental Nutrition Assistance
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Program (“SNAP”) (this project was known as the “Modernization Project”). After passage
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of the Patient Protection and Affordable Care Act in March 2010, the State decided to
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integrate the Modernization Project with a project to create an online health insurance
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exchange (the “HIX-IT Project”). One of the central goals of both Projects was to create an
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online, one-stop-shop for Oregonians to determine their eligibility for health insurance
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subsidies and State social services, to shop for and purchase health insurance plans, and to
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manage their access to and participation in State social service programs.
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Page
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COMPLAINT
ATTORNEY GENERAL ELLEN ROSENBLUM
MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085
1
11.
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As part of this integrated platform and online web portal, the State planned to include
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a single automated system for online Medicaid applications, including both eligibility
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determination and enrollment.
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12.
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The State determined that the best way to implement the Projects was to purchase a
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Commercial-off-the-Shelf software and technology package. Starting in 2009, the State
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began reviewing potential third-party vendors. Among those vendors was Oracle.
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13.
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In meetings, presentations, and written submissions, Oracle proposed that it could
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implement the Modernization and HIX-IT Projects with the so-called “Oracle Solution.” The
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“Oracle Solution” was a combination of allegedly integrated Oracle software and hardware
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products that could be snapped together to create an online, automated system that
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determined eligibility for and enrolled Oregonians in State social service programs, state and
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federal health insurance subsidies, and Medicaid. Oracle also represented that its “Oracle
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Solution” included a health insurance exchange in which Oregonians could shop for and
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purchase health insurance plans and apply for and enroll in Medicaid. Oracle represented
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that the entire “Oracle Solution” could be integrated into a single, online, one-stop-shop, just
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as the State envisioned.
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14.
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After careful consideration, including a review by an outside, independent consultant,
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the State decided to purchase the “Oracle Solution” in May 2011. The State initially
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contracted with Oracle through a third-party Oracle distributor, Mythics, Inc. In June 2011,
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DHS, OHA, and Mythics executed a license and services agreement called the Mythics
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License and Services Agreement (“MLSA”). Oracle did not sign the MLSA, but it was
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named as a third-party beneficiary of the contract. DHS and OHA executed the MLSA with
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COMPLAINT
ATTORNEY GENERAL ELLEN ROSENBLUM
MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085
1
Mythics through a Dell Price Agreement. Under the Price Agreement, Dell Marketing LP
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facilitates ordering and invoicing Oracle products and services through an LSA. The MLSA
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does not itself provide for the purchase of Oracle products and services. Instead, it provides
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a contractual framework governing the purchase of Oracle products and services. Actual
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purchases were made through a series of purchase orders submitted pursuant to the MLSA
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and the Dell Price Agreement.
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15.
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From June 2011 to present, the State has executed numerous purchase orders through
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the MLSA and the Dell Price Agreement for the purchase of Oracle software products,
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Oracle consulting services to set-up, integrate, and implement that software, and hosting
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services on which to run the software. The State made these purchases to implement the
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“Oracle Solution.”
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16.
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On February 28, 2012, the State, Mythics, and Dell executed a purchase order
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pursuant to the MLSA for the purchase of Oracle “On Demand” services (the “OHA On
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Demand Contract”). Oracle’s On Demand services provide for the leasing and hosting of
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Oracle servers on which the State can run Oracle software, including software for Medicaid
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enrollment. The OHA On Demand Contract provided for one year of On Demand services,
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with an option to renew for two additional years.
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17.
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Cover Oregon also entered a contract for Oracle On Demand Services (“Cover
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Oregon On Demand Contract”).
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18.
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From 2011 to present, the State and Cover Oregon have paid more than $250,000,000
for Oracle products and services for the Modernization and HIX-IT Projects.
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COMPLAINT
ATTORNEY GENERAL ELLEN ROSENBLUM
MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085
1
19.
2
Federal law required that state health insurance exchanges be operational by
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October 1, 2013. During the summer of 2013, the State and Cover Oregon learned for the
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first time that Oracle was failing to deliver its promised “Oracle Solution.” Even after the
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State and Cover Oregon agreed to reduce the scope of the Projects Oracle had promised it
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could deliver, Oracle fell far behind schedule. By late September 2013, it was evident that
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Oracle would not deliver a functioning health insurance exchange on time. Its software
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programs failed to seamlessly integrate as promised and its programmers’ work was riddled
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with bugs. On October 1, 2013, the system was not ready to launch and even a sharply
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scaled-back “soft launch” failed to function correctly.
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20.
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Despite missing the October 1, 2013 launch date, Oracle continued to promise that
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the exchange would be ready to launch, first by mid-October 2013, then by the end of
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October, then in December, then January 2014, then February. Again and again, Oracle
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broke its promises, missing every promised date.
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21.
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Federal law requires states to make timely Medicaid eligibility determinations and
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enroll eligible citizens in Medicaid. When Cover Oregon was formed, the responsibility to
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determine eligibility and enroll Oregonians into the State’s Medicaid program was delegated
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from OHA to Cover Oregon. When the Oracle-created health insurance exchange failed to
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launch in October 2013, OHA stepped in to help Cover Oregon create a mitigation plan to
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ensure that the State could continue to provide Medicaid eligibility determinations and
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enrollment, as required by federal law.
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22.
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As part of the mitigation efforts, Cover Oregon salvaged a component of the broken
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health insurance exchange used to determine whether Oregonians are eligible for Medicaid
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COMPLAINT
ATTORNEY GENERAL ELLEN ROSENBLUM
MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085
1
(the “Eligibility Component”). OHA engaged Oracle to create a work-around system that
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could be used to enroll eligible Oregonians in Medicaid (the “Enrollment Component”).
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OHA fully paid Oracle for the Enrollment Component work-around.
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23.
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The Eligibility Component is operated on Oracle hardware purchased by Cover
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Oregon and physically hosted at an Oracle datacenter for Cover Oregon. Oracle hosts this
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hardware pursuant to the Cover Oregon On Demand Contract. The Enrollment Component
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is operated on Oracle hardware leased by OHA and physically hosted at an Oracle datacenter
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for OHA. Oracle hosts and leases this hardware pursuant to the OHA On Demand Contract
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through Mythics. Both the Eligibility and Enrollment Components are required to process
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and enroll Oregonians in Medicaid.
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24.
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Once an Oregonian is determined to be eligible for Medicaid through the Eligibility
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Component on the Cover Oregon system, the files must be manually transferred to OHA to
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input into the Enrollment Component so that people can enroll in Medicaid coverage to access
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health care. That extra step renders the system terribly inefficient and causes significant delays.
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Medicaid is a government insurance program for persons of all ages whose income and
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resources are insufficient to pay for health care. States are not required to participate in
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Medicaid, but every state in the nation does. States and the federal government jointly fund
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state Medicaid programs and the states manage their Medicaid programs. Oregon’s Medicaid
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program is known as the Oregon Health Plan. It provides low income Oregonians with access
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to coordinated health care, including emergency treatment, prescriptions, immunizations,
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medical equipment, ambulance services, mental health care, and addiction treatment.
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25.
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On average each week, approximately 26,000 Oregon citizens become eligible or must
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have their eligibility re-determined for continued enrollment in the State’s Medicaid program.
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COMPLAINT
ATTORNEY GENERAL ELLEN ROSENBLUM
MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085
1
26.
2
Under the OHA On Demand Contract, OHA paid Oracle, Mythics and Dell
3
$1.76 million per quarter in 2014. OHA is current on its payments for the OHA On Demand
4
Contract.
5
27.
6
In the spring of 2014, the State formed a Transition Team to manage the State’s
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transition of qualified health plan enrollment from Cover Oregon to the federal health
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exchange and to ensure the continued functioning of the State’s Medicaid eligibility
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determination and enrollment.
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28.
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The Transition Team considered a number of alternatives for a long-term solution to
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provide Medicaid eligibility determination and enrollment for Oregonians during the summer
13
of 2014. One of the alternatives the Transition Team considered was trying to fix the Oracle
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system.
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29.
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Beginning in August 2014 and continuing through February 6, 2015, the Transition
17
Team had weekly Friday phone calls with Oracle to discuss Oracle’s role in the transition.
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30.
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In August, the Transition Team made several proposals, including a plan to fix the
20
Oracle system. To fix the Oracle system, the State needed access to an Oracle production
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environment. However, Oracle refused to provide one.
22
31.
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Thereafter, the Transition Team engaged Oracle in negotiations to relocate Cover
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Oregon’s backup equipment from an Oracle datacenter to a non-Oracle datacenter. The
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Transition Team planned to use this backup equipment to run both the Eligibility and
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Enrollment Components on equipment in a non-Oracle datacenter. Oracle, however, refused
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COMPLAINT
ATTORNEY GENERAL ELLEN ROSENBLUM
MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085
1
to provide the backup equipment to the State unless Cover Oregon shut down its main
2
servers running the Eligibility Component. Because shutting down its main servers would
3
interrupt its ability to make Medicaid eligibility determinations for its citizens, as required by
4
federal law, Cover Oregon could not agree to shut down its servers. So, the backup
5
equipment could not be relocated to a non-Oracle data center. Moreover, even if Cover
6
Oregon could have shut down its main servers, Oracle stated that it would completely wipe
7
clean the backup hardware before returning it to the State, making it unusable.
8
32.
9
On September 22, 2014, in order to provide sufficient time to engage in a transition
10
plan, and because litigation was pending between the parties, Oregon’s Transition Team
11
Senior Project Manager specifically asked Oracle’s Vice President whether Oracle would
12
renew the OHA On Demand Contract and the Cover Oregon On Demand Contract. Oracle’s
13
Vice President promised that Oracle would renew both the OHA On Demand Contract and
14
the Cover Oregon On Demand Contract. Oracle’s Vice President said that even though the
15
OHA On Demand Contract did not have any further right to renew, Oracle would renew that
16
contract, which was set to expire on February 28, 2015, for a 12-month minimum period.
17
Oracle’s Vice President noted that contract would have a right to early termination.
18
33.
19
In reliance on Oracle’s promise to renew the On Demand Contracts, OHA and Cover
20
Oregon agreed to continue to use the Oracle-hosted systems for ongoing Medicaid eligibility
21
determinations and enrollment to ensure uninterrupted service, while the Transition Team
22
concurrently sought a long-term solution.
23
34.
24
After completing a technical review of the underlying architecture of the Oracle
25
system, the Transition Team recommended abandoning the Oracle Eligibility and Enrollment
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COMPLAINT
ATTORNEY GENERAL ELLEN ROSENBLUM
MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085
1
Components and adopting a completely new system to handle Medicaid eligibility
2
determination and enrollment, independent of Oracle software and hardware.
3
35.
4
In late fall 2014, the Transition Team determined that the Kentucky Medicaid system
5
(“Transfer System”) could be modified to meet Oregon’s Medicaid needs. The Transfer
6
System project is currently underway and is scheduled for completion on December 31,
7
2015. When completed, it will provide a single automated system for online applications,
8
Medicaid eligibility determinations, and enrollment into Medicaid, independent of any
9
Oracle products or services.
10
36.
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12
Until the Transfer System project is complete and operational in Oregon, OHA must
continue to use its Oracle-hosted system to enroll Medicaid eligible citizens each day.
13
37.
14
OHA relied on Oracle’s promise to renew the OHA On Demand Contract by
15
abandoning its efforts to relocate the Cover Oregon backup equipment to a non-Oracle
16
datacenter, and executing the year-long Transfer System project. If in September 2014
17
Oracle had not agreed to renew the OHA On Demand Contract, the Transition Team would
18
have ordered appropriate hardware and located a new hosting provider to transition the
19
Enrollment Component away from the Oracle datacenter to meet the February 28, 2015
20
termination date.
21
38.
22
From October 2014 through February 2015, members of the Transition Team
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continued to have weekly phone conferences with Oracle leadership and exchanged email
24
with Oracle to prepare the documentation for the contract extension.
25
26
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COMPLAINT
ATTORNEY GENERAL ELLEN ROSENBLUM
MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085
1
39.
2
On December 15, 2014, Oracle through Dell and Mythics provided OHA with a quote
3
of $1.3 million per quarter for the renewal of Oracle services. The quote was “valid through
4
February 28, 2015.”
5
40.
6
On January 23, 2015, Oracle through Dell and Mythics provided a corrected quote of
7
$1.7 million per quarter to maintain and renew the same On Demand Contract as provided in
8
2014. The quote was “valid through February 28, 2015.”
9
41.
10
11
On January 28, 2015, OHA accepted Oracle’s offer by providing Oracle with a list of
services to renew.
12
42.
13
On January 30, 2015, Oracle acknowledged that OHA was proceeding with the
14
renewal.
15
43.
16
On February 4, 2015, OHA requested that Dell process the renewal for Oracle
17
services by February 28, 2015.
18
44.
19
20
On February 5, 2015, OHA provided Dell a spreadsheet to document and further
confirm the renewal order.
21
45.
22
Without warning, and after OHA had accepted the offer to renew the On Demand
23
Contract, Oracle suddenly announced that it would refuse to follow through on its promise.
24
At the close of business on February 5, 2015, Oracle e-mailed the State’s Transition Team
25
that it would not extend the OHA On Demand Contract and would terminate OHA’s On
26
Demand services at the end of the month, on February 28, 2015. Additionally and similarly,
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COMPLAINT
ATTORNEY GENERAL ELLEN ROSENBLUM
MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085
1
Mythics will not commit to extend the OHA On Demand Contract without Oracle’s
2
agreement even though Mythics had earlier offered to do so by forwarding and facilitating
3
Oracle’s offer to the State.
4
46.
5
OHA is ready, willing, and able to perform the On Demand Contract renewal.
6
47.
7
8
The 2014 OHA On Demand Contract requires that Oracle provide a decommissioning
plan 30 days prior to terminating service. Oracle has not provided such a plan.
9
48.
10
11
OHA has fully paid Oracle, Mythics, and Dell for all services rendered under the
OHA On Demand Contract and is fully compliant with all terms.
12
49.
13
If Oracle is permitted to break its promise to renew the OHA On Demand Contract,
14
OHA will be unable to enroll Oregonians in Medicaid. Medicaid-eligible Oregonians, are by
15
definition, among the neediest of all citizens. Without access to Medicaid, these Oregonians
16
will not have access to health care in Oregon.
17
50.
18
Oracle’s last minute announcement that it would not extend the OHA On Demand
19
Contract after months of working on the extension documents has left OHA with no
20
alternatives. There is not sufficient time to find any alternative to Oracle’s On Demand
21
services for Medicaid enrollment before February 28, 2015.
22
51.
23
If Oracle is allowed to shut-down its hosting services as it has threatened to do,
24
Oregon will be in violation of federal mandates to provide Medicaid coverage for its citizens
25
and risks losing its federal funding for Medicaid services as well as funding for other
26
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COMPLAINT
ATTORNEY GENERAL ELLEN ROSENBLUM
MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085
1
Medicaid technology projects, including the project to transfer from an Oracle-based system
2
to the Transfer System.
3
FIRST CLAIM FOR RELIEF
4
(Promissory Estoppel – All Defendants)
5
52.
6
Plaintiff realleges and incorporates by reference the allegations set forth in the
7
preceding paragraphs.
8
53.
9
Defendants promised that they would renew the OHA On Demand Contract, as
10
described in paragraphs 32 through 42.
11
54.
12
In reliance on Oracle’s promise that it would renew, OHA agreed to continue to use
13
the Oracle-hosted system for ongoing Medicaid enrollment for another year, refrained from
14
looking for alternative sources for hardware and a hosting provider and continued to invest
15
time and resources in the renewal process, and took other acts of reliance as described above.
16
55.
17
18
Defendants could foresee that OHA would rely on their promise to renew the OHA
On Demand Contract, and actually knew that OHA was relying on its promise.
19
56.
20
21
Defendants have purported to withdraw their promise to renew, and have refused to
perform, as described in paragraph 45.
22
57.
23
Defendants’ actions constitute a breach of the parties’ agreement.
24
58.
25
As a result of defendants’ threat not to perform its promise, plaintiff will be
26
irreparably harmed. Ten of thousands of Oregonians will be unable to enroll in Medicaid,
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COMPLAINT
ATTORNEY GENERAL ELLEN ROSENBLUM
MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085
1
leaving them without access to affordable health care. In addition, if the State is unable to
2
provide timely Medicaid enrollment to its citizens, it may lose federal funding for Medicaid
3
services as well as funding for other Medicaid technology projects, including the project to
4
transfer from an Oracle-based system to the Transfer System.
5
59.
6
Plaintiff has no adequate remedy at law. Plaintiff is entitled to specific performance
7
of the agreement to renew the OHA On Demand Contract for $1.7 million per quarter for one
8
year under the same terms as the prior year.
9
60.
10
11
Plaintiff and the people of Oregon will suffer irreparable harm as a result of
defendants’ wrongful conduct.
12
61.
13
Plaintiff is entitled to temporary, preliminary, and permanent injunctive relief
14
restraining and enjoining defendants from (i) cancelling their promise to renew the OHA On
15
Demand Contract and (ii) terminating, changing or otherwise restricting Oregon’s access to
16
and use of the servers, applications and environments necessary for operation of Oregon’s
17
Medicaid enrollment system.
18
SECOND CLAIM FOR RELIEF
19
(Breach of Contract – All Defendants)
20
Count 1 – Breach of Express Agreement to Renew
21
62.
22
Plaintiff realleges and incorporates by reference the allegations set forth in the
23
preceding paragraphs.
24
63.
25
This count is in the alternative to the First Claim for Relief.
26
Page
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COMPLAINT
ATTORNEY GENERAL ELLEN ROSENBLUM
MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085
1
64.
2
Defendants offered to renew OHA On Demand Contract on the same terms as
3
provided in the current contract at a price of $1.7 million per quarter, as described in
4
paragraphs 32 and 40.
5
65.
6
Plaintiff accepted defendants’ offer, as described in paragraph 41.
7
66.
8
9
Plaintiff is ready, willing, and able to comply with all the terms of the agreement, as
described in paragraph 46.
10
67.
11
12
Defendants have purported to withdraw their agreement, and have refused to perform,
as described in paragraph 45.
13
68.
14
Defendants’ actions constitute a breach of the parties’ agreement.
15
69.
16
As a result of defendants’ threat not to perform, plaintiff will be irreparably harmed.
17
Ten of thousands of Oregonians will be unable to enroll in Medicaid, leaving them without
18
access to affordable health care. In addition, if the State is unable to provide timely Medicaid
19
enrollment to its citizens, it may lose federal funding for Medicaid services as well as
20
funding for other Medicaid technology projects, including the project to transfer from an
21
Oracle-based system to the Transfer System.
22
70.
23
Plaintiff has no adequate remedy at law. Plaintiff is entitled to specific performance
24
of the renewal of the OHA On Demand Contract on the same terms as provided in the current
25
contract for $1.7 million per quarter for one year.
26
Page
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COMPLAINT
ATTORNEY GENERAL ELLEN ROSENBLUM
MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085
1
71.
2
3
Plaintiff and the people of Oregon will suffer irreparable harm as a result of
defendants’ wrongful conduct.
4
72.
5
Plaintiff is entitled to temporary, preliminary, and permanent injunctive relief
6
restraining and enjoining defendants from (i) cancelling the renewal of the OHA On Demand
7
Contract; and (ii) terminating, changing or otherwise restricting Oregon’s access to and use
8
of the servers, applications and environments necessary for operation of Oregon’s Medicaid
9
enrollment system.
10
Count 2 – Breach of Express Agreement to Transition
11
73.
12
Plaintiff realleges and incorporates by reference the allegations set forth in the
13
preceding paragraphs.
14
74.
15
In the OHA On Demand Contract, Oracle agreed that it would perform certain tasks
16
upon request for decommission of services, 30 days prior to the departure date, including the
17
following:
18
A.
19
Provide OHA with copies of written and electronic information that was
developed for it; and
20
B.
21
Publish a transition plan to OHA that details the transition schedule, transition
activities and applicable deliverables.
22
75.
23
24
Oracle has failed and to perform any decommissioning tasks, as described in
paragraph 47.
25
76.
26
Page
Defendants’ inaction constitutes a breach of the parties’ agreement.
16 -
COMPLAINT
ATTORNEY GENERAL ELLEN ROSENBLUM
MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085
1
77.
2
As a result of defendants’ failure to perform, plaintiff is unable to transition without
3
interruption of the State’s Medicaid enrollment system, and thereby will be irreparably
4
harmed. Ten of thousands of Oregonians will be unable to enroll in Medicaid, leaving them
5
without access to affordable health care. In addition, if the State is unable to provide timely
6
Medicaid enrollment to its citizens, it may lose federal funding for Medicaid services as well
7
as funding for other Medicaid technology projects, including the project to transfer from an
8
Oracle-based system to the Transfer System.
9
78.
10
11
Plaintiff has no adequate remedy at law. Plaintiff is entitled to specific performance
of defendants’ contractual obligation to perform the decommissioning tasks.
12
79.
13
14
Plaintiff and the people of Oregon will suffer irreparable harm as a result of
defendants’ wrongful conduct.
15
80.
16
Plaintiff is entitled to temporary, preliminary, and permanent injunctive relief
17
enjoining defendants from terminating the On Demand Contract prior to performance of their
18
contractual obligation of decommissioning tasks and providing adequate time for plaintiff to
19
transition without interruption of the State’s Medicaid enrollment system.
20
Count 3 – Breach of Implied Covenant of Good Faith and Fair Dealing
21
81.
22
Plaintiff realleges and incorporates by reference the allegations set forth in the
23
preceding paragraphs.
24
82.
25
26
Page
Implied within the parties’ agreements was defendants’ duty to act in good faith and
deal fairly with plaintiff with respect to the rights and obligations of the parties.
17 -
COMPLAINT
ATTORNEY GENERAL ELLEN ROSENBLUM
MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085
1
83.
2
Defendants breached this duty in at least the following ways:
3
A.
By making misrepresentations about their willingness to renew the OHA On
4
Demand Contract until it was too late for plaintiff to find alternatives, as
5
described in paragraph 29 through 45;
6
B.
By failing and refusing to prepare a decommissioning schedule and transition
7
plan prior to the termination of the current agreements, as described in
8
paragraph 47;
9
C.
By refusing to permit plaintiff to decommission and take possession of and
10
relocate Oracle hardware purchased by Cover Oregon to a non-Oracle
11
datacenter in August and September, 2014, as described in paragraph 31; and
12
D.
13
By unreasonably refusing to renew the OHA On Demand Contract at the
terms defendants had proposed as described in paragraph 45.
14
84.
15
As a result of defendants’ failure to perform, plaintiff will be irreparably harmed.
16
Ten of thousands of Oregonians will be unable to enroll in Medicaid, leaving them without
17
access to affordable health care. In addition, if the State is unable to provide timely Medicaid
18
enrollment to its citizens, it may lose federal funding for Medicaid services as well as
19
funding for other Medicaid technology projects, including the project to transfer from an
20
Oracle-based system to the Transfer System.
21
85.
22
Plaintiff has no adequate remedy at law. Plaintiff is entitled to specific performance
23
of the agreement to renew the OHA On Demand Contract for $1.7 million per quarter for one
24
year.
25
26
Page
18 -
COMPLAINT
ATTORNEY GENERAL ELLEN ROSENBLUM
MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085
1
86.
2
3
Plaintiff and the people of Oregon will suffer irreparable harm as a result of
defendants’ wrongful conduct.
4
87.
5
Plaintiff is entitled to temporary, preliminary, and permanent injunctive relief
6
restraining and enjoining defendants from (i) cancelling their promise to renew of the OHA
7
On Demand Contract and (ii) terminating, changing or otherwise restricting Oregon’s access
8
to and use of the servers, applications and environments necessary for operation of Oregon’s
9
Medicaid enrollment system.
10
PRAYER
11
12
WHEREFORE, plaintiff the State of Oregon, by and through OHA and DHS, prays
for relief against defendants as follows:
13
A.
On the first claim for relief, for a judgment in favor of the State and against
14
Oracle and Mythics:
15
1.
Providing for specific performance of defendants’ promise to renew
16
the OHA On Demand Contract, including the State’s requirement to
17
make quarterly payments;
18
2.
Providing for temporary, preliminary, and permanent injunctive relief
19
restraining and enjoining defendants from (i) cancelling their promise
20
to renew of the OHA On Demand Contract; and (ii) terminating,
21
changing or otherwise restricting Oregon’s access to and use of the
22
servers, applications and environments necessary for operation of
23
Oregon’s Medicaid enrollment system.
24
B.
25
1.
26
Page
On the second claim for relief:
On count 1, for a judgment in favor of the State and against Oracle and
Mythics:
19 -
COMPLAINT
ATTORNEY GENERAL ELLEN ROSENBLUM
MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085
1
a.
Providing for specific performance of the renewal of the OHA
2
On Demand Contract, including the State’s requirement to
3
make quarterly payments;
4
b.
Providing for temporary, preliminary, and permanent
5
injunctive relief restraining and enjoining defendants from
6
(i) cancelling the renewal of the OHA On Demand Contract;
7
and (ii) terminating, changing or otherwise restricting Oregon’s
8
access to and use of the servers, applications and environments
9
necessary for operation of Oregon’s Medicaid enrollment
10
system.
11
2.
On count 2, for a judgment in favor of the State and against Oracle and
12
Mythics:
13
a.
14
Providing for specific performance of defendants’
decommissioning tasks ;
15
b.
Providing for temporary, preliminary, and permanent
16
injunctive relief enjoining defendants from terminating the
17
current contract before performing the decommissioning tasks
18
and providing plaintiff with adequate time to transition without
19
interruption of the State’s Medicaid enrollment system.
20
3.
On count 3, for a judgment in favor of the State and against Oracle and
21
Mythics:
22
a.
23
Providing for specific performance of the OHA On Demand
Contract;
24
b.
Providing for temporary, preliminary, and permanent
25
injunctive relief restraining and enjoining defendants from
26
(i) cancelling the renewal of the OHA On Demand Contract;
Page
20 -
COMPLAINT
ATTORNEY GENERAL ELLEN ROSENBLUM
MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085
1
and (ii) terminating or changing or otherwise restricting
2
Oregon’s access to and use of the servers, applications and
3
environments necessary for operation of Oregon’s Medicaid
4
enrollment system.
5
C.
6
DATED this 13th day of February, 2015.
Such other relief as the Court deems appropriate.
7
ELLEN ROSENBLUM
ATTORNEY GENERAL
FOR THE STATE OF OREGON
8
9
By:
10
11
12
13
14
Special Assistant Attorneys General for
Plaintiff
15
16
/s/ Lisa A. Kaner
David B. Markowitz, OSB #742046
[email protected]
Lisa A. Kaner, OSB #881373
[email protected]
Dallas DeLuca, OSB #072992
[email protected]
Harry B. Wilson, OSB #077214
[email protected]
newlak\433045_4
17
18
19
20
21
22
23
24
25
26
Page
21 -
COMPLAINT
ATTORNEY GENERAL ELLEN ROSENBLUM
MARKOWITZ HERBOLD PC
SPECIAL ASSISTANT ATTORNEYS GENERAL
1211 SW Fifth Avenue, Suite 3000
Portland, OR 97204
(503) 295-3085