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Appellate arguments in cancelled IBM contract set for Nov. 25

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A panel on the Indiana Court of Appeals will hear arguments later this month on whether the state should have to pay more than $62 million to IBM after cancelling its billion-dollar contract with the company to modernize Indiana’s welfare system.

The state entered into the contract with IBM in 2006, but less than three years into the agreement – which included reducing the need for face-to-face meetings with caseworkers – the state terminated the contract, citing performance issues. IBM and the state each sued the other in Marion Superior Court.

IBM won a $40 million summary judgment in assignment fees, plus nearly $12 million for equipment costs and other contract claims after a six-week bench trial last year. With prejudgment interest, the total the state owes IBM is now more than $62.7 million.

The state is raising four issues on appeal: whether the trial court erred in concluding that it did not terminate the contract for cause, whether the assignment fees are an unenforceable penalty, whether it is liable to IBM for the equipment that it kept after termination of the contract, and whether IBM is entitled to prejudgment interest against the state, a sovereign entity.  

IBM is cross-appealing, arguing that it is entitled to an additional $43.4 million in deferred fees and $931,928 in change order fees.

Arguments will be before Judges John Baker, Ezra Friedlander and Nancy Vaidik in the Indiana Supreme Court courtroom. The arguments are scheduled for 1:30 to 3 p.m.
 

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  1. Hail to our Constitutional Law Expert in the Executive Office! “What you’re not paying attention to is the fact that I just took an action to change the law,” Obama said.

  2. What is this, the Ind Supreme Court thinking that there is a separation of powers and limited enumerated powers as delegated by a dusty old document? Such eighteen century thinking, so rare and unwanted by the elites in this modern age. Dictate to us, dictate over us, the massess are chanting! George Soros agrees. Time to change with times Ind Supreme Court, says all President Snows. Rule by executive decree is the new black.

  3. I made the same argument before a commission of the Indiana Supreme Court and then to the fedeal district and federal appellate courts. Fell flat. So very glad to read that some judges still beleive that evidentiary foundations matter.

  4. KUDOS to the Indiana Supreme Court for realizing that some bureacracies need to go to the stake. Recall what RWR said: "No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!" NOW ... what next to this rare and inspiring chopping block? Well, the Commission on Gender and Race (but not religion!?!) is way overdue. And some other Board's could be cut with a positive for State and the reputation of the Indiana judiciary.

  5. During a visit where an informant with police wears audio and video, does the video necessary have to show hand to hand transaction of money and narcotics?

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