Disclosure: I am an old X-Oraclite (Pres/COO - Oracle Canada). One thing that I knew is that Oracle always had (and still has) good lawyers.
I suspect the contract that Oracle accepted was very specific regarding their obligations and deliverables. There was, as I understand it, multiple sub-contractors over which Oracle exercised little or no responsibility or control. That responsibility falls within the purview of the project lead, that is, the State of Oregon.
This project implosion was not simply, as Oregon would have us believe, due to a single point of failure (i.e. Oracle). It was a massive, systemic failure across the whole project that was the result of incredibly poor planning, system design, project management and delivery. The fact that Oracle would have allowed this project to degrade to such a dysfunctional state is mind-boggling and certainly does not look good on them and in that they bear a great deal of responsibility. Similarily, the State of Oregon certainly can't adopt the "We were mislead" defense. That just makes them look incompetent and totally inept.
I suspect the litigation and counter litigation will be tied up in nebulous change orders and poorly or un-documented and articulated project direction. The project, while large and complex, did not require any wildly advanced IT innovation.
No winners here (especiially Oregon taxpayers) except the lawyers and MBA case studies.