On May 9, 2022, Judge Freeman of the Northern District of
California granted the lead Plaintiff's Union Asset Management
Holdings AG's Motion for Class Certification in the Sunrise
Firefighter's Class Action against Oracle and several members
of its senior management. This is certainly bad news
for Oracle.
Readers of our blog will remember that the class action lawsuit
alleges that Oracle and its management committed securities fraud
when they omitted to inform the investing public that Oracle's
increase in sales of Oracle's cloud software products was
fueled in part by predatory audits of Oracle customers, rather than
the quality of the Oracle cloud software. Judge Freeman ruled
previously that such a theory states a claim for securities fraud
by omission.
Rather than get into the weeds of the Court's ruling which was
a huge win for the Plaintiffs, readers of our blog may be wondering
what happens next in the litigation? Often once a class is
certified, Defendants will settle the lawsuit rather than proceed
to discovery and later trial. It will be very
interesting to see whether Oracle settles here or will still
continue to litigate the lawsuit. Should the parties continue
to litigate, we predict some very interesting discovery disputes as
Plaintiffs potentially seek additional discovery on Oracle's
predatory audit practices, and Oracle seeks to limit such discovery
as much as possible.
Should the case not settle, and after taking discovery, class
action defendants sometimes move to de-certify the class if
Plaintiffs have been unable to support their damages model or other
theories through evidence obtained in discovery. So it is
possible that Oracle may decide to attack Plaintiffs' case
again later after the close of discovery.
Oracle customers who under audit by Oracle made cloud purchases to
get out from under the audit and alleged large non-compliance
findings, may have remedies against Oracle. Our lawyers at
Tactical Law advise Oracle customers regarding potential claims
they may have against Oracle to recoup some of those losses due to
past Oracle audit overreaches.
The case is Sunrise Firefighters v. Oracle in
the Northern District of California. We will continue to
monitor the case. Check back for updates.
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