Indiana Court: IBM Owes State More Than $70M in Automation Dispute

Indiana’s Supreme Court has decided IBM Corp. must pay the state more than $70 million over the company’s failed effort to automate much of the state’s welfare services.

The court ruling upholds lower court rulings in the case that began in 2010 when Indiana and Armonk, New York-based IBM sued each other after then-Gov. Mitch Daniels cancelled the company’s $1.3 billion contract to privatize and automate the processing of applications for food stamps, Medicaid and other benefits.

The state appeals court affirmed in September a Marion County judge’s decision awarding the state $128 million in damages while crediting IBM with nearly $50 million in fees owed by the state. The Supreme Court rejected IBM’s arguments that it was owed more interest payments from the state.