ILNews

State will appeal IBM ruling

Back to TopCommentsE-mailPrintBookmark and Share

The state is going to appeal Wednesday’s decision in Marion Superior Court that it pay IBM $52 million for ending early its billion-dollar contract with the company to update the state’s welfare system.

Marion Superior Judge David Dreyer ordered the state pay IBM $12 million in early termination closeout payments and for equipment it retained after canceling the contract in October 2009. The judge ruled in January that the state owed IBM $40 million in subcontractor assignment fees for terminating the contract.

IBM and the state filed lawsuits against the other over the cancellation of the 10-year contract the state entered into with IBM to update Indiana’s welfare system. The $1.3 billion contract was signed in December 2006, but the state terminated it in October 2009, dissatisfied with IBM’s results.

The state sought more than $437 million from IBM, but Dreyer ruled earlier this year the most the state could recover is $125 million in damages. IBM wanted the state to pay it $100 million for terminating the contract early.

“The largely undisputed evidence shows that the Governor, the Family and Social Services Administration and various State of Indiana officials set out to fix Indiana’s poorly-performing welfare system by inserting an untested theoretical experiment, and substitute personal caseworkers with computers and phone calls,” the order says. “This is now admitted to be an error, and there is nothing in this case, or the Court’s power, that can be done to correct it, or remedy the lost taxpayer money or personal suffering of needy Hoosiers. All that can be done in this case is to take the first step at setting the final numbers among so many millions already spent.”

In a statement released by the governor’s office, the state focused on the improvements to Indiana’s welfare system performed by another vendor, which Gov. Mitch Daniels described as being the state’s most timely, accurate, cost-effective and fraud-free system ever.

Adam Horst, director of the Office of Management and Budget, said even if the ruling stands, it will not impact the state surplus. The state sets aside money for lawsuits.

The state’s attorneys, John Maley and Peter Rusthoven of Barnes & Thornburg LLP, released a statement saying, “Fortunately, the court’s ruling, while mistaken on some issues, has now rejected the great majority of IBM’s claims for additional money. This was another step in the right direction; and we are confident Indiana’s appellate courts will now set aside most if not all of the IBM claims that still remain.”

Wednesday’s ruling awards IBM $52,081,416, plus prejudgment interest and costs. The company is not entitled to damages for deferred fees or mandatory changes. The state got nothing out of its complaint.

 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. You can put your photos anywhere you like... When someone steals it they know it doesn't belong to them. And, a man getting a divorce is automatically not a nice guy...? That's ridiculous. Since when is need of money a conflict of interest? That would mean that no one should have a job unless they are already financially solvent without a job... A photographer is also under no obligation to use a watermark (again, people know when a photo doesn't belong to them) or provide contact information. Hey, he didn't make it easy for me to pay him so I'll just take it! Well heck, might as well walk out of the grocery store with a cart full of food because the lines are too long and you don't find that convenient. "Only in Indiana." Oh, now you're passing judgement on an entire state... What state do you live in? I need to characterize everyone in your state as ignorant and opinionated. And the final bit of ignorance; assuming a photo anyone would want is lucky and then how much does your camera have to cost to make it a good photo, in your obviously relevant opinion?

  2. Seventh Circuit Court Judge Diane Wood has stated in “The Rule of Law in Times of Stress” (2003), “that neither laws nor the procedures used to create or implement them should be secret; and . . . the laws must not be arbitrary.” According to the American Bar Association, Wood’s quote drives home this point: The rule of law also requires that people can expect predictable results from the legal system; this is what Judge Wood implies when she says that “the laws must not be arbitrary.” Predictable results mean that people who act in the same way can expect the law to treat them in the same way. If similar actions do not produce similar legal outcomes, people cannot use the law to guide their actions, and a “rule of law” does not exist.

  3. Linda, I sure hope you are not seeking a law license, for such eighteenth century sentiments could result in your denial in some jurisdictions minting attorneys for our tolerant and inclusive profession.

  4. Mazel Tov to the newlyweds. And to those bakers, photographers, printers, clerks, judges and others who will lose careers and social standing for not saluting the New World (Dis)Order, we can all direct our Two Minutes of Hate as Big Brother asks of us. Progress! Onward!

  5. My daughter was taken from my home at the end of June/2014. I said I would sign the safety plan but my husband would not. My husband said he would leave the house so my daughter could stay with me but the case worker said no her mind is made up she is taking my daughter. My daughter went to a friends and then the friend filed a restraining order which she was told by dcs if she did not then they would take my daughter away from her. The restraining order was not in effect until we were to go to court. Eventually it was dropped but for 2 months DCS refused to allow me to have any contact and was using the restraining order as the reason but it was not in effect. This was Dcs violating my rights. Please help me I don't have the money for an attorney. Can anyone take this case Pro Bono?

ADVERTISEMENT