Lawsuit Number Two: Now Oregon’s Suing Oracle Over Obamacare Disaster

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Oregon is suing its lead Obamacare contractor over the spectacular failure of the state’s Obamacare exchange website, weeks after the company originally sued Oregon over the project.

Oregon attorney general Ellen Rosenblum filed a 126-page lawsuit against Oracle on Friday, seeking over $200 million in damages. The complaint claims that Oracle officials made false statements and broke their contract with the exchange. Democratic Gov. John Kitzhaber, who’s facing Republican challenger Dennis Richardson for reelection in November, has publicly urged the state to sue Oracle since May.

“Today’s lawsuit clearly explains how egregiously Oracle has disserved Oregonians and our state agencies,” Rosenblum wrote.

Oregon had hoped to launch one of the best Obamacare exchanges in the country and received millions in “early innovator” grants from the Obama administration. But the exchange website never enrolled a single customer — all of Oregon’s Obamacare sign-ups used paper applications, after the exchange hired hundreds of extra employees when they realized the site wouldn’t be fixed in time.

But Oracle beat Oregon to the lawsuit. The technology company filed suit against the state exchange several weeks ago. Oracle claims that the state had put forth “constant public slander” against the company, blaming it for the exchange’s failure. Meanwhile, officials continued to seek Oracle’s help privately. Oracle’s suit alleges that they’re still owed $23 million by Cover Oregon under its contract.

While it’s clear the website was bungled, it may take the battling lawsuits to see whose fault it is. While Oregon alleges that Oracle failed to produce the product it promised, Oracle claims –with the backing of two independent reviews — that state officials provided contradictory directions and repeatedly changed their minds about what they wanted Oracle to do. Oregon failed to hire a systems integrator to oversee the development of the project, a misstep also cited in the Obama administration’s problems with

“The lawsuit filed today against Oracle by the Attorney General of Oregon is a desperate attempt to deflect blame from Cover Oregon and the Governor for their failures to manage a complex IT project,” Oracle said in a statement to Business Insider. “The complaint is a fictional account of the Oregon Healthcare Project. Oracle is confident that the truth — and Oracle — will prevail in this action and the one filed by Oracle against Cover Oregon two weeks ago in federal court.”

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