September 3, 2008 / 10:27 PM / 11 years ago

Judge rules Oracle failed to produce CEO's e-mail

BOSTON (Reuters) - A federal judge has ruled that Oracle Corp ORCL.O destroyed or failed to preserve Chief Executive Larry Ellison’s e-mail files sought as evidence in a class-action lawsuit filed in 2001 against the software maker.

Larry Ellison, owner of America's Cup Challenger BMW Oracle Racing, attends a news conference one day before the Valencia Louis Vuitton Cup competition in Valencia April 15, 2007. REUTERS/Heino Kalis

The suit seeks damages on behalf of Oracle shareholders who held the stock when it fell after the company reported disappointing results in 2001.

The lawsuit claims Ellison and other executives made false statements about the company’s financial condition as well as the functionality of its Oracle 11i suite of business management software.

U.S. District Judge Susan Illston also ruled that Oracle improperly failed to produce tapes and transcripts from interviews that a journalist conducted with Ellison in 2001 and 2002 as he gathered material to write “Softwar,” a biography of the company’s founder.

She said the tapes and transcripts were held by the author, Matthew Symonds, who had them destroyed in late 2006 or early 2007.

Illston said Oracle should have figured out a way to comply with the order to produce the information, which was issued in late 2006, saying that Ellison knew of the litigation at the time most of the interviews were conducted. She said that he shared intellectual property rights to the materials with Symonds.

“It is appropriate to infer that the emails and software materials would demonstrate Ellison’s knowledge of, among other things, problems with Suite 11i, the effects of the economy on Oracle’s business and problems with defendants’ forecasting model,” Illston said in an order released on Tuesday.

Illston said she would instruct jurors to make such an inference when they consider the case during a trial scheduled to begin on March 30.

Oracle has asked the court to throw out the case prior to the start of the trial. The plaintiffs have asked Illston to rule on some key claims.

In her ruling Tuesday, Illston asked both sides to revise and submit their requests for summary judgment prior to the start of the trial, specifying how her ruling on the evidence spoilage should impact her decision on those matters.

Oracle spokeswoman Deborah Hellinger declined comment.

Reporting by Jim Finkle; editing by Jeffrey Benkoe

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