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. File under the Sociology of Hoosier Discipline ... “We will be answering the complaint in due course and defending against the commission’s allegations,” said Indianapolis attorney Don Lundberg, who’s representing Hudson in her disciplinary case. FOR THOSE WHO DO NOT KNOW ... Lundberg ran the statist attorney disciplinary machinery in Indy for decades, and is now the "go to guy" for those who can afford him .... the ultimate insider for the well-to-do and/or connected who find themselves in the crosshairs. It would appear that this former prosecutor knows how the game is played in Circle City ... and is sacrificing accordingly. See more on that here ... http://www.theindianalawyer.com/supreme-court-reprimands-attorney-for-falsifying-hours-worked/PARAMS/article/43757 Legal sociologists could have a field day here ... I wonder why such things are never studied? Is a sacrifice to the well connected former regulators a de facto bribe? Such questions, if probed, could bring about a more just world, a more equal playing field, less Stalinist governance. All of the things that our preambles tell us to value could be advanced if only sunshine reached into such dark worlds. As a great jurist once wrote: "Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman." Other People's Money—and How Bankers Use It (1914). Ah, but I am certifiable, according to the Indiana authorities, according to the ISC it can be read, for believing such trite things and for advancing such unwanted thoughts. As a great albeit fictional and broken resistance leaders once wrote: "I am the dead." Winston Smith Let us all be dead to the idea of maintaining a patently unjust legal order.

  2. The Department of Education still has over $100 million of ITT Education Services money in the form of $100+ million Letters of Credit. That money was supposed to be used by The DOE to help students. The DOE did nothing to help students. The DOE essentially stole the money from ITT Tech and still has the money. The trustee should be going after the DOE to get the money back for people who are owed that money, including shareholders.

  3. Do you know who the sponsor of the last-minute amendment was?

  4. Law firms of over 50 don't deliver good value, thats what this survey really tells you. Anybody that has seen what they bill for compared to what they deliver knows that already, however.

  5. As one of the many consumers affected by this breach, I found my bank data had been lifted and used to buy over $200 of various merchandise in New York. I did a pretty good job of tracing the purchases to stores around a college campus just from the info on my bank statement. Hm. Mr. Hill, I would like my $200 back! It doesn't belong to the state, in my opinion. Give it back to the consumers affected. I had to freeze my credit and take out data protection, order a new debit card and wait until it arrived. I deserve something for my trouble!

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