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State And IBM Going Before Indiana Supreme Court Thursday

Phil Jern

The ongoing legal battle between the state and computer giant IBM will have its day in front of the Indiana Supreme Court Thursday. 

The state hired IBM in 2006 to modernize its welfare system, signing a ten-year contract worth $1.3 billion. 

But the shift from human case workers to greater automation was beset by reported problems, and three years later Governor Mitch Daniels canceled the contract. 

The state and IBM each filed lawsuits, seeking lost costs and damages.  The computer firm scored the first victory when a trial court ruled that IBM did not breach its contract and ordered the state to pay more than $62 million. 

But an Appeals Court ruling earlier this year found IBM’s performance was “substandard” and “had problems from the very beginning,” awarding some damages to the state while upholding some of the money awarded to IBM.  Both the computer company and Indiana appealed the case to the state Supreme Court

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