Supreme Court Rules For State Over IBM

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INDIANAPOLIS -

The Indiana Supreme Court has ruled in favor of the state in a long-running dispute involving IBM. In a unanimous decision, the high court agreed with a previous Indiana Court of Appeals ruling that the company breached its welfare eligibility systems contract with the state.

The state terminated the $1.3 billion, 10-year deal in 2009. The parties were only three years in when the state, amid dozens of issues with the new system it complained about to IBM, ended the contract. IBM argued outside factors including the economic downturn and floods that rocked the state in 2008 played a role in its performance. The Court of Appeals also contended later that IBM did not take advantage of opportunities it had to adjust the contract.

The state's original suit at the end of 2009 sought $170 million in damages, while IBM's asked for more than $52 million. A trial court ruled in favor of IBM, saying the state didn't prove a breach. That decision was later reversed by the Indiana Court of Appeals and upheld Tuesday by the Supreme Court.

The case has been referred back to trial court to determine damages.

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