In October 2013, Oregon was just another state whose Obamacare exchange failed to achieve lift-off when its Democrat governor attempted to abet the President in the launch of his “signature domestic achievement.” Shortly thereafter, Governor Kitzhaber earned two additional distinctions not enjoyed by Obama’s other accomplices: He was the first to abandon his constituents to Healthcare.gov, and resigned pursuant to an ethics scandal. Before leaving office, however, Kitzhaber made what may be the most outrageous decision of his tawdry tenure—he sicced his Attorney General on the IT firm that built the exchange as well as some of its employees.
And the Oregon Attorney General, Ellen Rosenblum, pursued this latter directive with a vengeance. Her original complaint against Oracle violates constitutional due process by naming five individuals employed by the corporation as defendants. Even worse, when Oracle filed a motion with the Marion County Circuit Court to have these employees removed from the list of defendants, the judge stunned many observers by permitting this outrageous act of lawfare to go forward. Oracle has appealed this ruling to the Oregon Supreme Court, saying that the state has exceeded its authority and comparing the targeting of individual employees to the taking of hostages.
Because the precedent this sets is so ominous, the U.S. Chamber of Commerce and three technology groups, Technet, the IT Acquisition Advisory Council, and the IT Alliance for the Public Sector, have filed a “friend of the court” brief requesting the Oregon Supreme Court to review the lower court’s bizarre ruling. The main issue raised in this brief involves the lower court’s violation of the Oracle employees’ constitutional right to due process and its abuse of the law relating to personal jurisdiction. As they apply to the Oracle lawsuit, these protections forbid any state court from arbitrarily asserting jurisdiction over people who neither live nor work in that state.
The Chamber’s brief phrases it thus, “The trial court held that the Relators—five Oracle employees—could be haled into the courts of a state where none of them works or resides in order to face more than half a billion dollars’ worth of personal liability.… That Holding distorts the law of personal jurisdiction.… As a matter of constitutional due process, a non-resident defendant is not subject to specific personal jurisdiction…” The brief goes on to suggest that, if the lower court ruling stands, companies will become very cautious about doing business in the state of Oregon—and particularly with the state. Oregon would be seen as an unsafe environment for business.
This would obviously apply to Oracle, but the attitude of Oregon’s AG toward the company is so schizophrenic that she has filed a second lawsuit in an effort to prevent it from pulling out of another project. Yes, you read that correctly. Having accused the company and selected employees of incompetence, fraud, and racketeering in her original lawsuit, Rosenblum was apparently surprised when Oracle announced that it was no longer willing to work with the state on the Oregon Health Authority’s (OHA) Medicaid program. Thus, six months after filing her original lawsuit, she filed another to keep Oracle’s “incompetent racketeers” working on the OHA project.
It didn’t take long for Oracle to issue a statement suggesting that this second lawsuit involving OHA renders it all too obvious that the original litigation was motivated by election year politics. The Oregonian quotes Oracle’s general counsel thus:
“It is beyond comprehension that the state believes it can criticize and defame Oracle, and seek to enjoin it from doing further business with the state due to the alleged failure to deliver a working system, while at the same time threaten Oracle with legal proceedings to force it to continue to provide hosting service because those very same services and system are working so well they are in fact critical to the Medicaid enrollment.”
This also lends credibility to Oracle’s longstanding claim that the exchange they had built was fully functional well before the go-live date and that it was abandoned for reasons having little or nothing to do with the quality of the company’s work. Indeed, the Washington Times reported last May, “Former Oregon Governor John Kitzhaber was told in early 2014 that the Obamacare state health care exchange his administration spent $305 million building could be made operational. But his administration chose instead to scrap the project and seek a scapegoat to keep the fiasco from harming his re-election, according to evidence turned over to congressional investigators.”
This was no victimless crime. American taxpayers were robbed of $305 million by corrupt Oregon officials who are evidently still bent on covering it up by pursuing a lawsuit aimed at real people—Stephen Bartolo, Thomas Budnar, Kevin Curry, Safra Katz, and Brian Kim—who could be financially ruined and whose reputations could be destroyed. If the justices of Oregon’s Supreme Court allow Attorney General Rosenblum to get away with this, it will set an ominous precedent. Combined with the corrupt bargain being cooked up between CMS and the state of Maryland, it will let slip the dogs of lawfare in every state that set up its own Obamacare exchanges and the damage will be horrific.
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