State appeals panel to hear IBM lawsuit

Judges on the state Court of Appeals are deciding whether a lower court was right in awarding $52 million to IBM over a failed welfare privatization project.

Three members of the court plan to hear arguments today from the state and IBM in the continuing legal battle.

Former Gov. Mitch Daniels outsourced the intake of welfare clients to a team of private contractors led by IBM in 2006. He canceled the 10-year, $1.37 billion contract with Armonk, N.Y.-based IBM in 2009 amid widespread performance complaints from clients, their advocates and federal officials.

The state sued IBM for breach of contract and the company countersued. A Marion County judge ruled last year that neither side deserved to win but awarded IBM $52 million, far less than it was seeking.

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