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Indiana Supreme Court will hear IBM case

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The Indiana Supreme Court will decide whether Gov. Mitch Daniels must appear for a deposition and testify in an ongoing lawsuit challenging the cancelled IBM contract to modernize the state’s welfare system.

An order issued by the state’s justices Monday grants the expedited briefing schedule and appeal of Judge David Dreyer’s ruling in State of Indiana v. IBM, No. 49S00-1201-PL–00015.

In December, the trial court judge ruled that nothing in state statute, court precedent or public policy allows Daniels to be excused from having to testify about his decisions and knowledge of the now-cancelled, 10-year contract worth $1.37 billion. The state sued in 2010 to recoup hundreds of millions of dollars it paid the company before cancelling the contract in 2009, and the computer giant countersued on breach of contract allegations and argued the state still owes about $100 million.

The state argued that Daniels delegates day-to-day management of the governor’s office and doesn’t have any “unique substantial knowledge” of that contract, while IBM argues that Daniels took this on as a pet project and his depositions are needed.

 Initially, Dreyer ruled Daniels didn’t have to testify about his involvement, based on evidence he had reviewed at the time, and that no exception in state statute warranted his testimony. But after further review and consideration, Dreyer found that Indiana Code 34-29-2-1 is open to multiple interpretations because it lists the governor as someone who doesn’t have to offer testimony, despite other provisions that list officials and individuals with specific conditions. Only one reported case, Government Supplies Consolidating Servs., Inc. v. Bayh, 753 F. Supp. 739 (S.D. Ind. 1993) addresses the issue, but it focuses on federal privilege law and not the state statute.

Bypassing the Indiana Court of Appeals by way of Indiana Appellate Rule 56(A), the Supreme Court has set an expedited briefing schedule. The briefing schedule will be completed by early February, according to the order, and the justices will set a date for oral argument in a separate order at a later time.

The five-week IBM trial in Marion Superior Civil 10 is scheduled to start Feb. 27, with the next hearing scheduled for Tuesday on the parties’ motions for summary judgment.







 

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