California contractor paid with IOU sues the state |

California contractor paid with IOU sues the state

SAN FRANCSICO and#8212; A vendor who provided 1,200 embroidered polo shirts and uniforms to a state-run youth camp and got paid with an IOU filed a lawsuit Wednesday against John Chiang and state Treasurer Bill Lockyer in U.S. District Court in San Francisco.

California started issuing thousands of IOUs instead of checks to contractors and vendors this month while lawmakers and Gov. Arnold Schwarzenegger negotiated a plan to close the stateand#8217;s $26 billion deficit.

Bairdand#8217;s lawsuit argues that the IOUs are unconstitutional and violate contract laws. She is seeking class-action status.

Baird received an IOU for nearly $28,000 on July 23 after providing shirts to a youth camp run by the California National Guard. She said she was unable to redeem the IOU at her bank because she had not been a cus tomer long enough.

and#8220;I sat in my car and I cried,and#8221; said the 58-year-old Templeton resident. and#8220; This is the money I need to keep me going for the next couple of months.and#8221;

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