Oracle and its NetSuite cloud-based ERP platform are again under legal fire. Veronica's Auto Insurance Services, Inc. ("VAI"), a California-based insurance company, has filed a lawsuit in San Francisco Superior Court alleging Oracle and NetSuite fraudulently induced it into purchasing a flawed ERP system that ultimately failed to function as promised. The complaint, filed on April 17, 2025, asserts claims for breach of contract, breach of the implied covenant of good faith and fair dealing, fraudulent and negligent misrepresentation, and violation of California's Unfair Competition Law (Bus. & Prof. Code § 17200).
Alleged Misrepresentations and Broken Promises
According to the complaint, NetSuite sales representatives made a series of specific promises before contract execution to win VAI's business. These included assurances that the system was tailored for the insurance industry, would require no third-party add-ons, and would be implemented with full Spanish-language support—essential for the client's predominantly Spanish-speaking workforce. Relying on these representations, VAI signed a Professional Services Agreement and Statement of Work with NetSuite in April 2021, committing to more than $111,000 in fees.
Once implementation began, however, it became clear the representations were untrue. Key functionalities were either missing or required costly third-party plugins. Data migration failed. Core features like vendor payment processing, financial reporting, and role-based user access didn't work as promised. Worse still, the promised Spanish-language training never materialized, leaving key staff unable to use the system. Ultimately, Veronica's abandoned the system entirely in 2024, absorbing substantial financial losses.
A Growing Pattern: Oracle ERP Litigation Landscape Expands
The lawsuit filed by VAI is just the latest in a mounting series of legal actions that paint a troubling picture of Oracle's conduct in selling and implementing its ERP software. In recent years, a variety of businesses across industries have come forward alleging that Oracle misrepresented the capabilities, readiness, or suitability of its ERP solution—often promising a turnkey system that ultimately required extensive customization, failed to deliver key functionality, or came with hidden costs such as required and expensive third party add-ons.
For example, in River Supply v. Oracle, filed by our law firm, Plaintiff alleged that Oracle made sweeping misrepresentations during the pre-contract sales cycle, touting NetSuite as a ready-to-go solution that could be quickly configured to go live within months at a fixed price. But like in VAI's case, implementation challenges emerged early and often.
In Realscape Group LLC v. Oracle, a class action lawsuit filed in the Northern District of Ohio, the plaintiff has accused Oracle of misrepresenting its ERP system as "off-the-shelf" while concealing the need for significant additional development and expensive third-party software purchases as add-on costs. Advance Lifts, Inc. similarly claimed Oracle sold it on functionality that did not yet exist.
Additional lawsuits by Morse Communications and Elkay Manufacturing underscore the recurring nature of the same type of complaints raised by the Plaintiff here. Janco Foods, Inc. v. Oracle America, Inc. provides another stark example. In Janco, a Texas-based food distributor alleged that Oracle failed to deliver on an ERP implementation. The project was never completed, forcing Janco to abandon the system altogether. The complaint alleged breach of contract and fraudulent inducement, claiming Oracle misrepresented both its capabilities and the system's readiness for the food distribution sector.
Another case, Barrett Business Services, Inc.v. Oracle America, Inc., filed in San Francisco Superior Court, further illustrate how NetSuite implementations often unravel. Barrett, a staffing company, alleged the software failed to meet basic payroll and compliance needs, as well as suffering from other defects.
And problems with Oracle's ERP product are not limited to this side of the pond. Recently, an auditor hired by the City of Birmingham in England issued a scathing report finding fault with the solution. According to one article, "Since it replaced aging SAP finance software with Oracle's cloud-based Fusion for HR, payroll, ERP, and finance in April 2022, Europe's largest local authority found the system "effectively crippled" its ability to manage and report on finances, auditors found. It was still not "safe and compliant" two-and-a-half years after the replacement went live."https://www.theregister.com/2025/03/11/birmingham_oracle_auditors/?td=keepreading The project to "replace an aging SAP system began in October 2019 with an expected budget of £19 million ($23.6 million) and go-live dates of December 2020 and February 2021. Auditors now say the costs may be as much as £130 million ($161 million), and although the new software went live in April 2022, the council is "unlikely to have a fully functioning finance system until at least 2026." https://www.theregister.com/2025/01/29/birmingham_oracle/
Together, these lawsuits and others, point to a systemic problem in how Oracle and NetSuite market, contract for, and deliver their ERP solutions. Businesses considering Oracle ERP software should proceed with caution, ensure detailed written documentation of all representations, and fully understand the binding legal terms—often buried in hard-to-access agreements like the Subscription Services Agreement, which is nothing more than a grayed out hyperlink on the Estimate Form.
Implications and Advice for NetSuite Customers
The Veronica Auto Insurance lawsuit adds to the growing body of litigation alleging that Oracle/NetSuite uses a bait-and-switch model to sell ERP systems that fail to perform as represented. For businesses considering a NetSuite or other Oracle ERP solution, or currently entangled in a troubled implementation, these cases highlight the importance of documenting all pre-contract representations and seeking legal counsel early. It also reinforces the need to scrutinize every referenced agreement—including "click-through" and incorporated terms not provided upfront.
Tactical Law continues to monitor Oracle litigation closely and represents businesses harmed by Oracle and NetSuite's practices.
Cases
- Realscape Group, LLC v. Oracle America, Inc., Case No. 1:24-cv-00558 (N.D. Ohio)
- River Supply, Inc. v. Oracle America, Inc. et al., Case No. 3:23-cv-02981 (N.D. Cal.)
- Advance Lifts, Inc. v. Oracle America, Inc. et al., Case No. 3:21-cv-04361 (N.D. Cal.)
- Morse Communications v. Oracle America, Inc. et al., Case No. 4:21-cv-05363 (N.D. Cal.)
- Elkay Plastics Co., Inc. v. NetSuite Inc. et al., Case No. CGC-20-583152 (San Francisco Sup. Ct.) Tactical Law Summary
- Barrett Business Services, Inc. v. Oracle America, Inc. et al., Case No. CGC-19-572474
- Janco Foods, Inc. v. Oracle America, Inc., Case No. 3:20-cv-05152 LB
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