Oracle 2011 Annual Report Download - page 135

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ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2011
other relief. On September 20, 2010, Oracle removed the San Mateo action to the United States District Court for
the Northern District of California. On September 30, 2010, plaintiff in the former San Mateo action brought a
motion to remand that case to San Mateo Superior Court. On October 28, 2010, Oracle brought a motion to
dismiss the two actions, arguing that the Delaware Chancery Court is the proper venue for both actions. On
January 3, 2011, the court denied plaintiff’s motion to remand, and the court also denied Oracle’s motion to
dismiss the actions for improper venue. Thereafter, the two cases were consolidated, and on February 10, 2011,
plaintiffs filed a consolidated complaint. On March 31, 2011, Oracle filed a motion to dismiss the consolidated
complaint, and the individual defendants brought a separate motion to dismiss. Plaintiffs filed a consolidated
opposition to these motions on April 28, 2011, and defendants filed a consolidated reply on May 19, 2011. The
court heard oral arguments on these motions on June 2, 2011, but has not yet ruled on these motions. As
discussed in the paragraph below, Oracle believes that the claims in the qui tam action are meritless.
On June 16, 2009, the United States Department of Justice notified us that a qui tam action had been filed against
the Company in the United States District Court for the Eastern District of Virginia and that the government was
conducting an investigation of the allegations in the sealed complaint. On July 29, 2010, the United States
government filed a Complaint in Intervention in that action, alleging that Oracle made false and fraudulent
statements to the GSA in 1997-98 regarding Oracle’s commercial pricing practices, discounts provided to
Oracle’s commercial customers, and discounts provided to government purchasers. The government alleges that
Oracle also improperly manipulated commercial sales to avoid the discounting restrictions imposed by the GSA
contract, reiterated and confirmed in 2001 false statements allegedly made during the 1997-98 contract
negotiations, and breached a duty to inform the government about discounts offered to commercial customers.
The Complaint in Intervention alleges False Claims Act violations and claims for breach of contract, fraud in the
inducement, constructive fraud, fraud by omission, payment by mistake, and unjust enrichment. The Complaint
in Intervention seeks statutory penalties and damages, including treble damages. Oracle filed a motion to dismiss
the complaint and on November 3, 2010, the court granted the motion in part and denied it in part. The court
dismissed the government’s claims to the extent they arose before May 29, 2001, and ordered the government to
file a new complaint. This First Amended Complaint was filed on November 16, 2010, and makes allegations
similar to those in the original complaint. Oracle filed a motion to dismiss the First Amended Complaint, which
was denied. Oracle answered the First Amended Complaint on February 1, 2011. The parties are currently
engaged in discovery. Fact discovery is currently scheduled to close on August 9, 2011, and the final pretrial
conference is scheduled for August 18, 2011 unless extended by the court. We cannot currently estimate a
reasonably possible range of loss for this action. We believe that we have meritorious defenses against this
action, and we will continue to vigorously defend it.
Other Litigation
We are party to various other legal proceedings and claims, either asserted or unasserted, which arise in the
ordinary course of business, including proceedings and claims that relate to acquisitions we have completed or to
companies we have acquired or are attempting to acquire. While the outcome of these matters cannot be
predicted with certainty, we do not believe that the outcome of any of these claims or any of the above mentioned
legal matters will have a materially adverse effect on our consolidated financial position, results of operations or
cash flows.
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