California Court of Appeal Affirms Victory and $3 Billion Damages Award for Compass Lexecon Client Hewlett-Packard

On June 14, 2021, a California appellate court rejected arguments by Oracle Corporation (Oracle) and affirmed a trial court ruling and jury award of more than $3 billion in damages to Hewlett-Packard Company (HP) in a breach of contract dispute between the companies.

Compass Lexecon Senior Managing Director Jonathan Orszag testified on behalf of HP in the 2016 trial regarding the amount of damages suffered by HP as a result of Oracle’s breach and the jury awarded HP the exact amount of damages calculated by Mr. Orszag: $3.014 billion. Oracle appealed the jury award, arguing that Mr. Orszag’s testimony on damages should have been excluded because his damages model contained a fundamental flaw and was impermissibly speculative.

In its ruling, the Court of Appeal concluded in extensive detail that Mr. Orszag’s damages model was not subject to the flaw claimed by Oracle, dismissing completely each of Oracle’s arguments. It also rejected Oracle’s argument that the model was impermissibly speculative after “carefully consider[ing] Oracle’s arguments with respect to Orszag’s methodology and assumptions.” The Court of Appeal concluded that Mr. Orszag “appropriately relied” on a variety of different data and sources and rejected completely each of Oracle’s contentions.

Compass Lexecon was retained by Jeffrey T. Thomas and Samuel Liversidge of Gibson, Dunn & Crutcher LLP. Mr. Orszag was supported by a Compass Lexecon team that included Kevin Green, Michael Smith, and Stephen Stanis.