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Tri Valley Growers Sue Oracle for $20 Million; Lawsuit Says Software Vendor's Products 'Never Worked'

SAN RAMON, Calif., Feb 10, 2000 (BUSINESS WIRE) -- Grower-owned Tri Valley Growers (TVG), a San Francisco Bay Area agricultural cooperative that processes and markets its members' fruits and vegetables, today announced the commencement of a lawsuit against Oracle Corporation alleging fraud, negligent misrepresentation, malpractice and breach of contract because the Redwood City, Calif.-based software developer failed to fulfill its contract and promises to modernize the food company's production and management systems.

TVG is asking for more than $20 million in damages. The lawsuit follows Oracle's refusal to accept responsibility for its failed venture into enterprise resource planning (ERP) software by refusing to return to TVG what the company spent on Oracle software programs and related systems that have never worked.

"I have never sued anyone in my life, and we certainly wanted to avoid litigation," said TVG President and CEO Jeffrey Shaw, "but Oracle's refusal to be reasonable with our request after all of its promises and commitments left us no choice."

TVG retained Oracle in November 1996 to install its ERP software package known as "CPG" that would enable the $800 million (annual sales) food processor and marketer to integrate and computerize its operations from raw product delivery to finished goods distribution. Oracle represented to TVG that it had earlier developed and bundled similar software for other consumer packaged goods companies.

Oracle was to license, install and support a complete suite of software that would provide TVG with the systems to modernize its production and management. For TVG, this meant computer systems for operations at its nine factories employing more than 9,500 workers, processing more than one million tons of fruit and vegetables annually, and distributing and marketing 15,000 Stock Keeping Units (sku's), 24 brands and thousands of private label food products domestically and internationally. In addition, Oracle promised to "protect" and fully "stand behind" its systems for TVG.

Instead, according to the lawsuit, the Oracle product never worked. In fact, it could not even be installed on TVG's computers. Rather than correct the problem, admit failure, or provide the promised level of support to make the system work, Oracle blamed TVG's computers and its lack of technical expertise. To date, Oracle's ERP solution has never worked, forcing the company to abandon the investment and retain another vendor to address its overall and Y2K systems needs.

When TVG asked Oracle to refund its investment, Oracle refused. In a recent article in Computerworld, Oracle CEO Larry Ellison stated the bundling concept "sounded great, but the trouble is, we can't control our partners. We're going to be very careful going forward not to take responsibility for something someone else has to do. That was a huge mistake, and we will never do it again."

Shaw noted, "I agree with Mr. Ellison. Oracle did make a huge mistake. I'm sorry Oracle had problems with their strategic entrance into ERP software, however, I fail to see why grower-owned TVG, let alone any company, should pay for Oracle's mistakes." Shaw added, "When you buy something, it should work. If it doesn't work, you should get your money back. We trusted Oracle was selling a commercial product that worked. As we found out, not only did the product not work for us, but a working ERP package did not even exist at the time the sold the product to us. I am completely baffled that Oracle thinks they can get away with this."

TVG has filed the lawsuit in California Superior Court in San Francisco.

Founded in 1932, Tri Valley Growers is responsible for nearly half of the canned peaches, pears and apricots and close to ten percent of the canned tomato products in the United States.

Copyright (C) 2000 Business Wire. All rights reserved.

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-- Dee (T1Colt556@aol.com), February 10, 2000

Answers

Oracle is going down the tubes. SAP international recently announced that it's preferred database for development is now IBM DB/2. Oracle financials supposedly have never worked very well.

-- computer guy (sittin@home.com), February 10, 2000.

I doubt that Oracle will go down the tubes, no matter what SAP does. Oracle has a lot more going for it than ERP software.

It's funny you'd mention their financials. Do you mean, specifically, their financial apps, as in OLAP finapps? I thought they were a little thin on QA a few years ago for finapps. They were selling well, though. I just know that the finapps QA staff was mighty thin while the marketing apps got more warm bodies. Always thought that was odd.

-- paul leblanc (bronyaur@gis.net), February 10, 2000.

Tri Valley was going to go down in a blaze, but trusting untested (incomplete!)Oracle software.

-- Dan (no@no.com), October 17, 2004.