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COA rules against voting-systems company

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The Indiana Court of Appeals affirmed a lower court order denying an electronic voting systems company's petition for stay on an order prohibiting it from marketing, selling, or leasing voting systems in Indiana for 18 months.

MicroVote General Corp. provided election equipment and electronic voting systems to 47 counties in Indiana. Under revised Indiana Code Section 3-11-7.5-28(a), the company's systems would become decertified by Oct. 1, 2005, and the systems had to be recertified. MicroVote continued to execute contracts, market its equipment, and install uncertified equipment before becoming re-certified.

The Office of Indiana Secretary of State and the Indiana Election Division instituted separate administrative proceedings claiming MicroVote violated statute by servicing customers after its equipment was decertified. The OSS proceedings recommended a financial punishment. The Indiana Election Commission, which ruled on the IED claim, issued a final order after the OSS initiated proceedings. The IEC prohibited MicroVote from selling, leasing, or marketing its systems in Indiana for 18 months with additional reporting requirements for 3 ½ years thereafter.

In MicroVote General Corp. v. Indiana Election Commission, No. 49A02-0910-CV-975, MicroVote appealed the denial of its verified petition for judicial review. The company claimed IEC should have dismissed the proceedings before it based on res judicata and collateral estoppel grounds.

The trial court held the matter wasn't or couldn't have been determined in a prior action, but the Court of Appeals found MicroVote did satisfy this requirement of res judicata. There was identical evidence offered to support both claims and the only factual difference was the penalty imposed, wrote Judge Patricia Riley.

MicroVote didn't meet the last requirement for res judicata - that the controversy adjudicated in the former action must have been between the parties to the present suit or their privies. It is true that the IED is a division of the OSS, but the two entities have separate authorities.

"While the OSS and the IED both have duties related to Indiana's elections, their respective duties are significantly different," wrote the judge. "Statutorily, the OSS cannot order the sanctions provided for in I.C. § 3-11-7.5-28 and the IEC could not order the penalties provided for in I.C. § 3-11-17-3."

The appellate court also found no error in the application of the offensive collateral estoppel in the proceedings before the IEC. MicroVote had a full and fair opportunity to litigate the issue of its violations and allowing the company to now re-litigate the issue would be unfair under the circumstances.

In addition, the IEC's final order didn't impose penalties and conditions that exceed its statutory authority. The discretionary nature of Indiana's election law statute, combined with the Indiana Administrative Orders and Procedures Act, empowers the IEC to sanction a vendor for violating I.C. § 3-11-7.5-28 without de-certifying the vendor's voting equipment.

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