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Context of 'June 23, 1986: Inslaw Files First Claim with Board of Appeals over PROMIS Dispute'

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Deputy Attorney General Lowell Jensen and other members of the Justice Department’s PROMIS Oversight Committee approve the termination of part of a contract with Inslaw, Inc., for the installation of PROMIS software (see March 1982). The termination, pushed through despite a report that there was progress with Inslaw’s attorney on the resolution of contract problems, only concerns the part of the contract for the installation of PROMIS on word processing hardware in 74 small US attorneys’ offices. Inslaw will still be contracted to install the application in 20 other US attorneys’ offices. The termination is to be for default, as Inslaw has allegedly failed to perform this portion of the contract, although a different reason will later be given (see February 1984). [US Congress, 9/10/1992]

Entity Tags: Lowell Jensen, US Department of Justice

Timeline Tags: Inslaw and PROMIS

Inslaw files a claim with the Department of Transportation Board of Contract Appeals in its dispute over the Justice Department’s use of enhanced PROMIS software. Further claims will be filed on September 19, 1986 and August 24, 1987. The claims are filed subsequent to notices of appeal submitted in February 1985, as well as May and November 1986. The monetary claims fall into six categories:
bullet Time-sharing charges for a computer center operated by Inslaw and used by several US attorneys’ offices;
bullet Contract target fees and other payments;
bullet Indirect costs, including overheads;
bullet Direct costs;
bullet Costs, including legal fees, incurred by Inslaw after a portion of the original contract was terminated by the government for its own convenience; and
bullet Costs incurred because the Department withheld payments.
However, as the issue is also the subject of a dispute before a bankruptcy court and subsequent appeal courts, the matter will be held in abeyance and the board will not take any significant steps for years. [US Congress, 9/10/1992]

Entity Tags: US Department of Justice, idateasiapi, Inslaw, Inc.

Timeline Tags: Inslaw and PROMIS

The US District Court for the District of Columbia upholds a bankruptcy court ruling in favor of Inslaw. The ruling concerned the dispute over the PROMIS software between Inslaw and the Justice Department, which was found to have violated bankruptcy protection provisions (see September 28, 1987 and February 2, 1988), but had appealed (see Between February 2, 1988 and November 22, 1989). Judge William Bryant finds that the department knew an enhanced version of PROMIS was Inslaw’s central asset, that ownership of the software was critical to the company’s reorganization in Chapter 11 bankruptcy, and that the department’s unilateral claim of ownership and its installation of the enhanced version in offices around the United States violated automatic stay bankruptcy provisions in multiple ways. In addition, Bryant agrees with the bankruptcy court’s conclusion that the department never had any rights to the enhanced version and that “the government acted willfully and fraudulently to obtain property that it was not entitled to under the contract.” In addition, when Inslaw suggested mechanisms to determine whether the private enhancements had been made, the government rejected them, and “when asked to provide an alternative methodology that would be acceptable, the government declined.” The department could have used established procedures to get relief from the automatic stay provisions, but simply chose not to do so. Bryant, who also finds that the department tried to convert Inslaw’s bankruptcy to Chapter 7 liquidation, adds, “What is strikingly apparent from the testimony and depositions of key witnesses and many documents is that Inslaw performed its contract in a hostile environment that extended from the higher echelons of the Justice Department to the officials who had the day-to-day responsibility for supervising its work.” Finally, Bryant finds that, as the case was grounded in bankruptcy law, the bankruptcy court was an appropriate forum to hear the dispute and it did not have to be submitted to the Department of Transportation Board of Contract Appeals, an arena for contract disputes. Although most of the damages awarded are upheld, as Bryant finds the bankruptcy court assessed damages based on the evidence it obtained, he reduces compensatory damages by $655,200.88. [US Congress, 9/10/1992]

Entity Tags: William Bryant, US Department of Justice, Inslaw, Inc., US District Court for the District of Columbia

Timeline Tags: Inslaw and PROMIS

Following an adverse ruling in an appeals court, Inslaw files an appeal for a writ of certiorari to the Supreme Court. If the writ were granted, it would mean the Supreme Court agreed to hear a further appeal in the case. The appeals court had reversed bankruptcy and district court rulings favorable to Inslaw in its dispute with the Justice Department over the enhanced PROMIS software (see September 28, 1987, November 22, 1989, and May 7, 1991). The application will be denied (see January 13, 1992). [US Congress, 9/10/1992]

Entity Tags: Inslaw, Inc., US Supreme Court, US Department of Justice

Timeline Tags: Inslaw and PROMIS

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