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  • Empathy for the Inanimate: Emotions Guide Contract Language Interpretation in Hewlett-Packard v Oracle
    Hewlett Packard v. Oracle

    “This case appears to be the end of a marriage,” said Santa Clara Superior Court Judge James Kleinberg, before the start of the Hewlett Packard v. Oracle bench trial.  With that statement, we can see the narrative context within which he will interpret some relatively vague contract language to decide whether there is a viable contract that binds the two parties.  Given the acrimony and emotional furor throughout the case, it seems apt.

    Judges may be fine legal scholars, but they are humans first and foremost.  In our years of research with mock jurors, mock arbitrators and retired judges, we have found that there are more similarities than differences in how people of all levels of legal training respond to cases.  People respond to legal issues within the context of interpersonal relationships between parties.

    The HP-Oracle case is full of human drama, spite and vitriol.  In 2010, Mark Hurd abruptly stopped being the CEO of HP when he was alleged to have been in an improper sexual relationship.  Hurd was quickly snapped up by his friend and tennis pal Oracle CEO Larry Ellison who made him President at Oracle which led to acrimonious litigation between the two companies.  This was seemingly resolved in a settlement agreement in which Oracle agreed to “continue to offer its product suite on Hewlett-Packard platforms.”  Not long afterward, funnily enough while on jury duty, Ellison wrote a press release, seemingly out of the blue, stating that Oracle would no longer support software for Intel’s Itanium microchips that were used in HP servers, a significant financial blow to HP.  In his deposition, Ellison explained “I … had nothing to do for 15 minutes, so I drafted a press release.”  Oracle co-president Safra Catz sent the final press release to others in the company with the message “Buckle up.”

    This was apparently the turn of events that HP had feared when Hurd left on bad terms and brought his knowledge of HP’s strengths and weaknesses to Oracle.  They also feared Ellison’s legendarily capricious and often spiteful behavior.  HP thought that it had precluded this type of move when it signed the settlement agreement, and they sued.   But first, as Ann Livermore, an HP executive vice president at the time testified at trial, she was “furious and appalled” and called Catz to yell at her.

    Contract language is often difficult to interpret, and in our research, we routinely see jurors, judges and arbitrators use the interpersonal interactions as a guide to the intent of each party at the point of signing and at the points leading up to the litigation.  In this case, there is an abundance of interpretable behavior that can be used to read vindictiveness, betrayal, animosity and deceit.

    We can say that we are better than this or wiser than this, but it is natural and easy for us to imbue inanimate objects with emotions and motivations.  In light of this, pity the poor naked contract language that must be subjected to this scrutiny.

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