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State will appeal IBM ruling

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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.

 

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  1. CCHP's real accomplishment is the 2015 law signed by Gov Pence that basically outlaws any annexation that is forced where a 65% majority of landowners in the affected area disagree. Regardless of whether HP wins or loses, the citizens of Indiana will not have another fiasco like this. The law Gov Pence signed is a direct result of this malgovernance.

  2. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  3. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

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  5. Here's an idea...how about we MORE heavily regulate the law schools to reduce the surplus of graduates, driving starting salaries up for those new grads, so that we can all pay our insane amount of student loans off in a reasonable amount of time and then be able to afford to do pro bono & low-fee work? I've got friends in other industries, radiology for example, and their schools accept a very limited number of students so there will never be a glut of new grads and everyone's pay stays high. For example, my radiologist friend's school accepted just six new students per year.

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