Case Title: State v. Int'l Bus. Machines Corp.

Citation: 

Docket Number: 49S00-1201-PL-15

State: indiana

Court: Indiana Supreme Court

Date: 2012-03-21T00:00:00Z

Document:
ATTORNEYS FOR APPELLANT  
 
 
 
ATTORNEYS FOR APPELLEE 
Peter J. Rusthoven 
 
 
 
 
 
Andrew W. Hull 
John R. Maley 
 
 
 
 
 
 
Daniel K. Burke 
Barnes & Thornburg LLP  
 
 
 
 
Hoover Hull LLP 
Indianapolis, Indiana 
 
 
 
 
 
Indianapolis, Indiana 
 
ATTORNEYS FOR AMICUS CURIAE 
 
 
 
Jay P. Lefkowitz 
IN SUPPORT OF APPELLANT 
 
 
 
 
Kirkland & Ellis LLP 
Gregory F. Zoeller 
 
 
 
 
 
New York, New York 
Attorney General of Indiana 
 
 
 
 
 
 
 
 
Michael D. Shumsky 
Thomas M. Fisher 
 
 
 
 
 
Kirkland & Ellis LLP 
Solicitor General  
 
 
 
 
 
Washington, DC 
  
Heather Hagan McVeigh 
Deputy Attorney General 
 
Ashley Tatman Harwel 
Deputy Attorney General 
Indianapolis, Indiana 
______________________________________________________________________________ 
 
In the 
Indiana Supreme Court  
_________________________________ 
 
No. 49S00-1201-PL-15 
 
STATE OF INDIANA, 
 
 
 
 
 
 
 
 
 
 
 
Appellant, 
 
v. 
 
INTERNATIONAL BUSINESS 
MACHINES CORPORATION, 
 
 
 
 
 
 
 
 
 
 
 
Appellee. 
_________________________________ 
 
Appeal from the Marion Superior Court, No. 49D10-1005-PL-021451 
The Honorable David J. Dreyer, Judge 
_________________________________ 
 
Civil Transfer of Appeal of Interlocutory Order 
_________________________________ 
 
March 21, 2012 
 
Rucker, Justice. 
FILED
CLERK
of the supreme court,
court of appeals and
tax court
Mar 21 2012, 9:07 am
 
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In this case we consider whether Indiana Code section 34-29-2-1 – providing that the 
governor of the State of Indiana is “privileged from arrest on civil process, and from obeying any 
subpoena to testify” – operates to preclude a trial court from issuing an order to compel the 
Governor’s deposition in a contract dispute brought by the State of Indiana against a contractor.  
We hold that it does. 
 
Facts and Procedural History 
 
 
On December 27, 2006, the State of Indiana on behalf of its agency the Indiana Family 
and Social Services Administration entered into a contract with International Business Machines 
Corporation (“IBM”) to modernize and improve the State’s welfare system.  Appellant’s App. at 
933.  Mitchell E. Daniels, Jr. was Governor of Indiana at the time the State entered into the 
contract and continues in that office today.  The Governor, along with several other State 
officials, signed the document and made several public statements concerning the same.  
Appellant’s App. at 933, 586, 609, 612.  On October 15, 2009, the State notified IBM that it was 
terminating the contract.  Appellant’s App. at 729.  On May 13, 2010, the State filed suit against 
IBM in the Marion County Superior Court asserting breach of contract among other claims.  
IBM filed a separate suit against the State, and its claims were consolidated with the State’s 
originally-filed complaint.  See, e.g., Appellant’s App. at 3, 5, 6.   
 
Although the record is not clear concerning the precise date, at some point IBM served 
notice on the Governor to take his testimonial deposition.  See Ind. Trial Rule 30(A).  On March 
18, 2011, the State moved for a protective order pursuant to Indiana Trial Rule 26(C).  The State 
asserted that any deposition of the Governor was prohibited based on the Governor’s unqualified 
“privilege[ ] from arrest on civil process, and from obeying any subpoena to testify,” Ind. Code § 
34-29-2-1(6),1 and alternatively, that IBM could not overcome the high bar imposed under the 
common law prohibiting testimony of upper-level executive branch government officials.  See 
Appellant’s App. at 303, 306.  The trial court issued a “Protective Order Precluding Deposition 
of Governor at This Time,” reasoning: “On one hand, the statute above [Indiana Code section 
34-29-2-1] clearly precludes a deposition of a sitting governor.  On the other hand, an exception 
                                                 
1 This provision of the code was originally enacted in 1852 as Ind. Rev. Stat. ch. 5, section I.   
 
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might be established since it is reasonable to expect any chief executive to have unique personal 
first-hand knowledge or experience in the management of a project of such magnitude as this 
IBM contract.”  Appellant’s App. at 430.  The court held “[t]he current evidence does not allow 
the Court to determine whether the Governor may be deposed in this case under any purported 
exception to the statute.”  Appellant’s App. at 430.   
 
On September 6, 2011, after conducting over four months of additional discovery, IBM 
moved to compel the Governor’s deposition.  On December 15, 2011, the trial court issued an 
order granting IBM’s motion with certain limitations designed to “prevent any undue burden” 
upon the Governor.  Appellant’s App. at 1463, 1465.  In this order, the trial court found the 
language of Indiana Code section 34-29-2-1 ambiguous and interpreted the statute to ascertain 
the intent of the legislature.  While recognizing that “[t]he underlying policy and goals of the 
Statute clearly include the protection of various public officials and private individuals during 
official duties or significant public responsibilities,” the court concluded that its application in 
this “unprecedented case” would be “unfair to the public” – which could not have been the 
General Assembly’s intent.  Appellant’s App. at 1465.  On the State’s motion, the trial court 
certified its order for interlocutory appeal pursuant to Indiana Appellate Rule 14(B).  The State 
sought emergency transfer to this Court, which we granted.  See Ind. Appellate Rule 56(A).   
 
Standard of Review 
 
 
In general, we review a challenge to a trial court’s discovery order for abuse of 
discretion.  See Terre Haute Reg’l Hosp., Inc. v. Trueblood, 600 N.E.2d 1358, 1362 (Ind. 1992).  
However, we review questions of law de novo, Porter Dev., LLC v. First Nat’l Bank of 
Valparaiso, 866 N.E.2d 775, 778 (Ind. 2007), and the interpretation of a statute is a question of 
law.  Tyler v. State, 903 N.E.2d 463, 467-68 n.4 (Ind. 2009).  “[A]ppellate courts need not defer 
to a trial court’s interpretation of [a] statute’s meaning.”  Elmer Buchta Trucking, Inc. v. Stanley, 
744 N.E.2d 939, 942 (Ind. 2001).  We therefore “independently review the statute’s meaning and 
apply it to the facts of the case under review.”  Id.  In sum, because a question of statutory 
interpretation constitutes a question of law, we review it de novo.   
 
 
 
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Discussion 
 
 
In interpreting a statute, our goal is to determine and give effect to the intent of the 
legislature.  Porter Dev., 866 N.E.2d at 778.  In determining legislative intent, we “consider the 
objects and purposes of the statute as well as the effects and repercussions of” our interpretation.  
Bushong v. Williamson, 790 N.E.2d 467, 471 (Ind. 2003).  “The legislative intent as ascertained 
from the provision as a whole prevails over the strict literal meaning of any word or term.”  Id.  
These precepts have guided us in statutory interpretation for over a century.  See, e.g., Parvin v. 
Wimberg, 30 N.E. 790, 793 (Ind. 1892) (noting that when legislative intent is ascertained, “it 
will prevail over the literal import and the strict letter of the statute”).  And where meaning is 
uncertain, “the courts will look also to the situation and circumstances under which [the statute] 
was enacted, to other statutes, if there are any upon the same subject, whether passed before or 
after the statute under consideration, whether in force or not, as well as to the history of the 
country, and will carefully consider in this connection the purpose sought to be accomplished.”  
Id.  Cf. D & M Healthcare, Inc. v. Kernan, 800 N.E.2d 898, 911 (Ind. 2003) (rejecting literal 
construction of Indiana Constitutional provision in light of history of the provision and 
subsequent practice).   
 
 
At the outset, we note that in Indiana “privileges are statutory in nature and it is within 
the General Assembly’s power to create them.”  In re Subpoena to Crisis Connection, Inc., 949 
N.E.2d 789, 793 (Ind. 2011).  A grant of privilege and the scope of that privilege are policy 
choices of the Legislature.  And provided the result is constitutional, choices of policy are solely 
within the purview of the Legislature.  See Shook Heavy & Envtl. Constr. Grp. v. City of 
Kokomo, 632 N.E.2d 355, 359 (Ind. 1994).2  By creating a statutory privilege, the Legislature 
has determined that a particular interest is important enough to justify the privilege in the 
prescribed scope.  See Crisis Connection, 949 N.E.2d at 793.    
 
 
In this case, the statute provides a governor an absolute privilege to be free from “arrest 
on civil process, and from obeying any subpoena to testify.”  I.C. § 34-29-2-1(6).  In contrast to 
other subsections of the statute, which place clear limits on the privilege given to other persons, 
subsection (6) includes no such limitations.  Compare, e.g., I.C. § 34-29-2-1(1) (privileging 
                                                 
2 IBM asserts no claim that the statute at issue here is unconstitutional. 
 
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legislators “from arrest on civil process, and from obeying any subpoena to testify” “during their 
attendance[] at” and while “going to[] and returning from” a meeting of the General Assembly); 
I.C. § 34-29-2-1(2) (granting the same privilege to voters “during attendance at, going to, and 
returning from elections”); I.C. § 34-29-2-1(7) (similarly privileging “[a]ll persons while actually 
engaged in the discharge of military duty”), with I.C. § 34-29-2-1(6) (granting the same privilege 
to “[t]he governor, treasurer of state, secretary of state, auditor of state, and superintendent of 
public instruction” with no qualifying language whatsoever).  In other words, the Governor’s 
privilege under this statute, like the victim advocate privilege in Crisis Connection, admits of no 
exceptions.  See 949 N.E.2d at 795. 
 
Ultimately, the question in this case boils down to whether a trial court’s order to compel 
the Governor’s deposition amounts to a “subpoena” from which the Governor is privileged under 
Indiana Code section 34-29-2-1.  The parties engage in a spirited and enlightening debate about 
the meaning of “subpoena” at the time of the statute’s original enactment in 1852, as well as the 
interplay between the privilege statute and the Indiana Trial Rules.  In essence, the State argues 
that at the time the statute was enacted, a subpoena was the only mechanism available to compel 
the attendance of witnesses, and therefore the Legislature intended to grant the governor a 
privilege against all possible mechanisms of compulsion, which would today include a trial 
court’s order to compel a deposition.  IBM responds that in 1852, Indiana statutes also provided 
that a witness could be compelled to testify upon “notice” of a party.  See 2 Ind. Rev. Stat. pt. 2, 
ch. 1, art. 14, § 266; art. 15, § 296.  And here notice was served on the Governor to appear for a 
testimonial deposition.  According to IBM because the privilege statute contains no privilege 
against “notice,” the Legislature did not intend to grant the governor a privilege against 
compulsion through means other than subpoena.  IBM also argues that even if the 1852 
Legislature did intend to immunize a governor against non-subpoena means of compulsion, the 
subsequent re-adoption of this statute after the promulgation of the Indiana Trial Rules evinces 
the Legislature’s intent to modify the meaning of the statute in light of the Trial Rules.    
 
 
We have a slightly different view.  The 1852 Act provided that “[t]he attendance of all 
witnesses when duly summoned . . . may be enforced by attachment.”  2 Ind. Rev. Stat. pt. 2, ch. 
1, art. 13, § 234.  Both party and non-party witnesses could be compelled to testify “in the same 
manner.”  2 Ind. Rev. Stat. pt. 2, ch. 1, art. 15, § 295.  Although the statutory scheme provided 
 
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that “notice” was to be given to a party when the adverse party deposed both party and non-party 
witnesses, see 2 Ind. Rev. Stat. pt. 2, ch. 1, art. 14, § 266; art. 15, § 296, “notice” was not the 
means of compelling testimony in 1852, nor is it today.  Then, as now, compulsion was 
accomplished by a court order – whether called a subpoena, an “order to compel,” or something 
else.  That the trial court’s order to compel the Governor’s deposition in this case arose from the 
Governor’s failure to respond to IBM’s “notice” of deposition is therefore of no moment.  The 
reference to “subpoena” in Indiana Code section 34-29-2-1 encompasses the order at issue here.  
We thus agree with the trial court’s original declaration that the statute “clearly precludes a 
deposition of a sitting governor.”  Appellant’s App. at 430. 
 
 
To hold otherwise would be to elevate a strict literal meaning of the word “subpoena” 
over clear Legislative intent to provide a gubernatorial privilege against compelled testimony.  
Surely the Legislature did not mean that any court command, provided it was not denominated 
“subpoena,” would suffice to evade the statutory privilege.  IBM argues that a subpoena is 
unique in that it may be enforced by a contempt order – that is, by physical detention of the 
person subject to the subpoena – whereas an order of the kind at issue here cannot be enforced by 
a contempt finding.  And IBM contends that the Legislature intended only to protect a governor 
from physical detention.  We disagree with this reasoning.  First, the policy behind executive 
privilege extends beyond protection from detention to encompass protection from all manner of 
interference with one’s official duties – ranging from interferences with one’s time to 
interferences with the deliberative process.  See, e.g., Stagman v. Ryan, 176 F.3d 986, 994-95 
(7th Cir. 1999) (recognizing that the deposition of a high ranking state official would disrupt his 
schedule); 1 McCormick on Evidence § 108, at 483 (Kenneth S. Brown, ed., 6th ed. 2006) 
(recognizing that protecting officials’ deliberative processes enhances the quality of 
governmental decision-making).  Second, under our Trial Rules, “notice” of a deposition is all 
that is necessary for a court clerk to issue a subpoena to a witness.  See Ind. Trial Rule 45(D).  
“Notice” of a deposition under the Trial Rules therefore provides all that is necessary for a 
subpoena to issue.  For purposes of the privilege statute, “notice” and “subpoena” accomplish 
essentially the same goals – and thus would be privileged in essentially the same manner.  A 
literal reading of “subpoena” in the statute would, under IBM’s reasoning, force the Governor 
(and others protected under the statute) to give a deposition upon “notice” of a party or upon 
 
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some other court instruction – provided no subpoena was issued as is clearly permitted by Trial 
Rule 45(D).  Such a literal understanding of the statute would produce an absurd result.  
 
    
 
The existence of the Governor’s privilege does not, however, preclude the trial court 
from ensuring that the interests of justice are served in this litigation.  Indeed, “[t]rial courts have 
the right and duty to manage proceedings before them to insure both expedition and fairness, and 
must be granted a wide discretion in carrying out that duty.”  Glaros v. H.H. Robertson Co., 757 
F.2d 1564, 1573 (Fed. Cir. 1986).  This could include, among other things, limitations on the 
introduction of certain evidence.  In fact, even where privileges as important as the Fifth 
Amendment privilege against self-incrimination are implicated, courts in civil proceedings have 
taken steps to ensure that the litigation proceeds in a manner consistent with the interests of 
justice.  See, e.g., Baxter v. Palmigiano, 425 U.S. 308, 318 (1976) (recognizing that “the Fifth 
Amendment does not forbid adverse inferences against parties to civil actions when they refuse 
to testify in response to probative evidence against them”); Wansong v. Wansong, 478 N.E.2d 
1270, 1272 (Mass. 1985) (affirming restriction of plaintiff’s use of certain evidence in divorce 
case where he invoked his privilege against self-incrimination).  
 
 
Citing the Governor’s extensive involvement in the formation, implementation, and 
ultimately the termination of the contract, IBM makes an intricate argument explaining why the 
Governor’s deposition is necessary.  However, the privilege afforded by Indiana Code section 
34-29-2-1(6) is absolute.  And although it may be expressly waived, once invoked any party 
protected by the privilege simply may not be compelled to give testimony.  The Governor’s 
involvement may or may not be relevant to the questions raised in this litigation.  If relevant, the 
trial court will determine the appropriate remedial measures to ensure that the interests of justice 
are served. 
 
Conclusion 
 
We reverse the order of the trial court.  
 
Shepard, C.J., and Dickson and David, JJ., concur. 
Sullivan, J., concurs in result with separate opinion. 
 
Sullivan, Justice, concurring in result. 
 
I would refrain from holding that any privilege is “absolute.”  All privileges are subject to 
waiver by voluntary disclosure, see Ind. Evidence Rule 501(b), and when used offensively rather 
than defensively – as a “sword rather than a shield,” Harney v. Owen, 4 Blackf. 337, 338 (Ind. 
1837) (quoting Badger v. Phinney, 15 Mass. 359, 363 (1819)).  And, of course, privileges are 
subject to constitutional limitations.  See State v. Fromme (In re Subpoena to Crisis Connection, 
Inc.), 949 N.E.2d 789, 795 (Ind. 2011). 
 
In this case, I do not think it is necessary to rule on the privilege issue at all because the 
information IBM seeks is not relevant or material to any issue in the case.  See Ind. Trial Rule 
26(B) (discovery limited to matters “relevant to the subject-matter involved in the pending ac-
tion”).  Here the State seeks damages from IBM alleging breach of contract and that IBM pro-
vided false information to procure the contract; IBM seeks fees it claims the State owes under the 
contract and reimbursement for equipment it claims that the State improperly has retained.  IBM 
says that “the Governor’s statements regarding his assessment of IBM’s performance bear direct-
ly on the merits of the State’s claim of breach and demand for damages, and the State’s other 
claims directly put the Governor’s state of mind at issue.”  Appellee’s Resp. Br. 9.  This is not 
correct.  Neither the Governor’s “assessment of IBM’s performance” nor his “state of mind” bear 
in any way on whether or not IBM breached the contract or the State owes IBM fees or reim-
bursement.  See Vernon Fire & Cas. Ins. Co. v. Sharp, 264 Ind. 599, 607-08, 349 N.E.2d 173, 
180 (1976) (“[A] promisor’s motive for breaching his contract is generally regarded as irrelevant 
because the promissee will be compensated for all damages proximately resulting from the 
promisor’s breach.” (citations omitted)).  To the extent that the Governor has information that 
might be relevant to whether or not IBM provided false information to the State, he is certainly 
not a unique witness in that regard – there was a competitive procurement for this contract where 
all of the information IBM provided would have been in the bid documents.  See State v. Cline (In 
re WTHR-TV), 693 N.E.2d 1, 7 (Ind. 1998) (materiality of evidence “embraces also an evaluation 
of not only theoretical relevance, but also the availability of the information from other 
sources”). 
2 
 
Because Governor Daniels’s testimony is not relevant or material to any issue in this 
case, I concur in the result of the Court’s opinion.