IBM case still pending as Indiana court awaits new justice

The upcoming retirement of one of Indiana's Supreme Court justices has legal observers speculating on when the court might rule in a long-running dispute over IBM Corp.'s failed attempt to privatize Indiana's welfare services.

The high court accepted that case in August 2014 after both sides appealed a state Court of Appeals ruling in the legal battle over IBM's $1.3 billion state contract to automate much of Indiana's welfare system.

The court heard oral arguments two months later, but attorneys for the two sides then agreed — at Chief Justice Loretta Rush's suggestion — to try mediation to resolve their dispute over tens of millions of dollars.

Attorneys for Indiana and IBM took part in several meetings and telephone conferences before informing the court last August that mediation had failed and the court would have to decide the case, said John Maley, a private attorney helping represent Indiana in the case.

The IBM contract dispute is now the longest pending case that remains before the state Supreme Court, said Joel Schumm, an Indiana University law professor who's an expert on Indiana's courts. People who have followed the case wonder whether the court will rule before retiring Justice Brent Dickson steps down April 29 or "if that's something that will still be around for the new justice," Schumm said.

Indiana Supreme Court spokeswoman Kathryn Dolan said there is no timeline for that ruling and she cannot comment on "whether a decision will be handed down before or after Justice Dickson leaves the bench."

Pence's predecessor, fellow Republican Gov. Mitch Daniels, canceled IBM's contract in 2009, less than three years into the 10-year deal, following complaints from welfare clients about long wait times, lost documents and improper rejections.

Indiana and IBM then countersued each other, setting off years of legal wrangling.

A Marion County judge ruled in 2012 that Indiana had failed to prove that IBM had breached its contract and awarded the company $52 million. Indiana appealed that ruling. The Indiana Court of Appeals found in February 2014 that IBM had committed a material breach of its contract but was still entitled to nearly $50 million in state fees. The state's top court accepted the case after both sides appealed.

Karl Mulvaney, an Indianapolis attorney who was the state Supreme Court's administrator from 1984 to 1991, said the IBM case is complicated and no one outside the court knows its status.

"Obviously this case is a pretty hotly debated case, so tougher cases take a little bit more time," he said.

Schumm said he expects the court will rule in the IBM case before Dickson retires, based on the length of time it has had the matter and its previous actions in "clearing out their backlog of cases" before retiring justices leave the bench.

When Justice Frank Sullivan retired in 2012, Schumm said the court issued 17 opinions in Sullivan's last 10 days on the bench.