CA Controller Gets $59M for Failed Payroll System Implementation

SAP to Pay Calif. $59M Over Botched Payroll System Contract
– Law360

Law360 covered Manatt’s successful resolution of California’s dispute with its statewide payroll modernization project vendor over a failed payroll system implementation. The case, State Controller's Office v. SAP Public Services Inc., was settled on the eve of trial on June 6 on terms favorable to the state of California.

A multidisciplinary Manatt team led by Tom McMorrow, chair of the California State Government practice, led an assessment of the implementation in late 2012 that preceded the filing of the litigation in 2013. The litigation was led by litigation partners Phillip Kaplan and Craig Bloomgarden, who, along with McMorrow, negotiated the settlement for the state.

The $59 million settlement will enable the state to recover all contract payments made to SAP as well as costs associated with the litigation, and included agreement by SAP to drop its own claims against the state for approximately $23 million.

In addition to McMorrow, Kaplan and Bloomgarden, the full team included: partners Nancy Whang, Dave Moran, Marilyn Martin-Culver, Randy Keen and Brian Kelly; Government and Regulatory Policy managing director Steve Coony; and associates Justin Rodriguez, Cary Finkelstein and Brandon Young.

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