Legal News

On the IBM-Indiana Lawsuit: Will Mitch Daniels Be Deposed?

By Ashby Jones

Mitch Daniels, the Republican governor of Indiana, could prove to be a viable challenger to President Obama in 2012. (At least the NYT’s David Brooks thinks so.)

But if he does run, he might have to spend at least a little time explaining to the American people two lawsuits in which he is currently embroiled. As the Indianapolis Star reported recently, the disputes involve the cancellation of IBM's $1.37 billion contract to modernize the state's welfare system.

The latest in the case: whether Daniels should give a deposition. The state recently requested a protective order that would bar Daniels and his chief of staff from being deposed. But IBM's lead attorney argues that Daniels was a key player in the project and that he has a duty to share information.

The backstory: the state sued IBM last May to reclaim the $437 million it paid the company before canceling the contract in 2009. Daniels canceled the 10-year contract after only three years because of complaints about the automated system.

IBM countersued, saying the state still owes the company about $100 million.

Though IBM contends Daniels was heavily involved in the project and could provide details that others couldn't, the state's attorneys say it's common practice for high-ranking government officials to stay out of civil suits unless they pertain to personal misconduct.

"The basic concept in all these types of protections is … the state's chief executive has other things to do, and if you start opening the door (for depositions) then everybody will want to take his deposition, and courts have just uniformly resisted this," said Peter Rusthoven, a Barnes & Thornburg attorney representing the state.

Full post as published by Law Blog - WSJ.com on March 23, 2011 (boomark / email).