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Supreme Court Urging State And IBM To Settle Dispute

By Brandon Smith

Posted November 7, 2014

The Indiana Supreme Court is urging the state and computer giant IBM to settle their dispute over a cancelled welfare modernization contract out of court before the justices reach a ruling.

Indiana signed a ten-year contract worth more than $1 billion with IBM in 2006 for the firm to modernize and manage the state's welfare system.

But, three years in, Governor Mitch Daniels canceled the deal, saying the system was plagued with problems.

Both sides filed lawsuits, seeking lost costs and damages.  A trial court sided with IBM, while an appeals court found both parties were entitled to some money.

A week after both sides argued their cases in front of the state Supreme Court, Chief Justice Loretta Rush signed an order urging the parties to work out their differences.

Indiana University law professor David Orentlicher said it's unusual for the Supreme Court to suggest mediation, but not unheard of.  And, he said there are several reasons the state's highest court would make the suggestion.

"Something like that the case raises questions that they're uncomfortable addressing at this time and so let's see if we can get this resolved so we don't have to decide a question would be difficult and we might not get a good result for future parties," Orentlicher said.

The order gives the sides 30 days to decide whether they'll to go to mediation; if not, the Supreme Court will resolve the appeal.

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