State of Indiana v. International Business Machines Corporation - 11/25/13

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Monday  November 25, 2013 
1:30 PM  EST

1:30 p.m. 49A02-1211-PL-875. Indiana Supreme Court courtroom. In December 2006, the State of Indiana, on behalf of its agency the Indiana Family and Social Services Administration, entered into a ten-year, $1.3 billion contract with International Business Machines Corporation.  The contract sought to modernize and improve the State’s failing welfare system in part by reducing the need for face-to-face meetings with caseworkers.  However, less than three years into the ten-year contract, the State terminated the contract citing IBM performance issues and transitioned to a hybrid system.  The parties then sued each other for breach of contract in Marion Superior Court.

The trial court granted IBM summary judgment for $40,000,000 in Assignment Fees.  And after a six-week bench trial in 2012 involving 96 witnesses and 7500 exhibits, the court found that the State did not terminate the contract for cause and awarded IBM an additional $9,510,795 for equipment costs, $2,570,621 in other contract claims, and $10,632,333 in prejudgment interest, bringing the total to $62,713,749.  The State now appeals raising four issues, including 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 cross-appeals arguing that it is entitled to an additional $43,416,738 in Deferred Fees and $931,928 in Change Order fees. 

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  1. Lori, you must really love wedding cake stories like this one ... happy enuf ending for you?

  2. This new language about a warning has not been discussed at previous meetings. It's not available online. Since it must be made public knowledge before the vote, does anyone know exactly what it says? Further, this proposal was held up for 5 weeks because members Carol and Lucy insisted that all terms used be defined. So now, definitions are unnecessary and have not been inserted? Beyond these requirements, what is the logic behind giving one free pass to discriminators? Is that how laws work - break it once and that's ok? Just don't do it again? Three members of Carmel's council have done just about everything they can think of to prohibit an anti-discrimination ordinance in Carmel, much to Brainard's consternation, I'm told. These three 'want to be so careful' that they have failed to do what at least 13 other communities, including Martinsville, have already done. It's not being careful. It's standing in the way of what 60% of Carmel residents want. It's hurting CArmel in thT businesses have refused to locate because the council has not gotten with the program. And now they want to give discriminatory one free shot to do so. Unacceptable. Once three members leave the council because they lost their races, the Carmel council will have unanimous approval of the ordinance as originally drafted, not with a one free shot to discriminate freebie. That happens in January 2016. Why give a freebie when all we have to do is wait 3 months and get an ordinance with teeth from Day 1? If nothing else, can you please get s copy from Carmel and post it so we can see what else has changed in the proposal?

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  5. I hope you dont mind but to answer my question. What amendment does this case pretain to?