Following private mediation, accusations of fraud and unethical business practices were dropped.

NetSuite customer lawsuit, claim that Netsuite, a company owned by Oracle, oversold and underdelivered on software was recently resolved out-of-court through private mediation.

A California judge rejected River Supply Inc.'s (RSI) lawsuit against Oracle & NetSuite in an administrative document [PDF] that was made public last week. Also, Oracle's defense was rejected at the same moment. According to court filings, Oracle and RSI, a Pennsylvania-based supplier of architectural building materials, scheduled a confidential mediation session for August.

Filing its initial complaint last year, RSI alleged Oracle had conducted a "widespread fraudulent scheme and unfair business practice" in sales of NetSuite software while failing to "provide all the functionality at the price promised" in a project that began in 2021 to replace financial, commerce, and payroll software. In the court documents, Oracle was accused of breaching its agreement with RSI by "failing to implement a workable ERP solution and failing to perform the services in a professional manner consistent with industry standards, and as was represented by Oracle."

In November 2023, Oracle succeeded in having most of the allegations dismissed, including those of fraud. However, the judge did not dismiss RSI's claim that Oracle breached its contract by failing to deliver workable software on time.

This year in February, the judge allowed RSI to submit an amended fraud claim. Laurel Beeler, United States Magistrate Judge in the District Court, Northern District of California, dismissed RSI's claims of a breach of the implied covenant of good faith and fair dealing as well as its claim under California's Unfair Competition Law (UCL). However, the NetSuite court case denied Oracle's motion to dismiss the fraud claim. The plaintiff alleged that, as well as suffering delays to the project, Oracle failed to deliver the required functionality. RSI claimed it lost $170,000 in implementation and subscription fees, $700,000 in additional resources it dedicated to the failed project, and also suffered additional damages in the form of lost revenue and efficiencies.