June 9, 1999 1:20 PM PDT

Senate brings Y2K bill debate to a close

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Political wrangling stalls Y2K bills

May 24, 1999
Despite a White House veto threat, the Senate today began debate on a bipartisan bill that looks to limit lawsuits arising from the Year 2000 computer problem.

Sen. John McCain (R-Arizona), chief sponsor of the bill, which is also dubbed the "Y2K Act," submitted the bipartisan compromise legislation to open debate on the floor today. A vote is expected sometime later today, Senate staffers said.

As reported earlier, the Back to Year 2000 Index Page compromise was hammered out mainly by Senators McCain, Chris Dodd (D-Connecticut), Orrin Hatch (R-Utah), Bob Bennett (R-Utah), Ron Wyden (D-Oregon), and Dianne Feinstein (D-California), and would retain some, but not all, punitive damage caps for businesses, protect municipalities and governmental entities from punitive damages, and preserve state court standards, thus watering down some of the controversial points in the Y2K Act that have tied up the bill in political wrangling for weeks.

Compromise was reached after McCain agreed to eliminate caps on punitive damages for big businesses and dropped a provision that would have protected individual corporate officers and directors.

"It represents spirited discussion, hard fought compromise, and agreement with a number of my colleagues on both sides of the aisle," McCain said today on the floor of the Senate.

The new version of the bill provides a 90-day "cooling-off" period for plaintiffs and defendants to resolve Y2K disputes out of court. The bill would also set some caps on punitive damages for small businesses, protect government entities including municipalities, school, fire, water and sanitation districts from punitive damages, and protect those not directly involved in a Y2K failure.

Sen. Dodd proposed most of the specific changes to the revised bill, McCain said. The bill now would eliminate liability protection for executive board members, remove the punitive damage caps for businesses with more than 50 employees, provide that state evidentiary standards will be used in specific situations, and preserve protections provided in the Year 2000 Information and Readiness Act of 1998. That act protects companies from antitrust litigation while sharing corporate information to address Y2K problems.

McCain said the revisions represent a "significant compromise," and differentiate the bill from the stronger bill passed by the House. "Even with these compromises, I believe that the bill will accomplish the goals for the legislation. However, I do not believe that any additional compromises are necessary or warranted."

Today's expected vote on the measure marks the fourth time the Senate has voted since the bill was submitted by Sen. John McCain back in January.

Experts warn that the ultimate outcome of the congressional debates--a single piece of legislation that will clearly define legal limits over Y2K settlements--is crucial to avoid clogging courts with years of costly litigation.

Yesterday, the National Retail Federation, a retail trade association, The Software & Information Industry Association (SIIA) and the Information Technology Association of America (ITAA) today voiced their support for the Y2K Act.

The push by the business groups represents a growing frustration among politicians, business leaders, and other observers who want to see the ongoing fight come to some sort of closure.

In a statement yesterday, ITAA president Harris Miller called upon Senate Democrats to "unshackle the new economy" by passing the McCain-Dodd Y2K Act, which he called the No. 1 priority of the high tech industry.

As reported earlier, the Senate bill is designed to limit what supporters call a potential flood of litigation arising from Y2K problems, which by some estimates could cost $1 trillion and cripple the economy. Opponents claim the bill would protect businesses at the expense of consumers' interests. Despite the bipartisan compromise, the Clinton administration has threatened to veto the measure if approved by the Senate.

The White House is sticking to a letter sent to Senate majority leader Trent Lott (R-Mississippi) that threatened to veto the measure, while giving support to an alternative to the Y2K Act submitted by a group of Democrats led by Sen. John Kerry (D-Massachusetts).

Like the Y2K Act, Kerry's measure would give defendants up to 90 days to fix Y2K problems before a lawsuit could be filed. It would make it harder to file certain class action lawsuits and would bar damages for economic losses, according to the senator's office.

The Kerry plan, backed by Senate minority leader Tom Daschle, would safeguard consumer rights. For example, Democrats said they would not cap any punitive damage awards.

Should the Senate approve a Y2K litigation bill, both the House and Senate bills will go to conference, where they will be hammered into one measure to be approved or denied by President Clinton. Though Clinton has clearly signaled his opposition, however, the White House would join in the conference process to try to ensure presidential approval for the final legislation, Senate staffers said.

The Year 2000 problem, also known as the millennium bug, stems from an old programming shortcut that used only the last two digits of the year. Many computers now must be modified, or they may mistake the year 2000 for the year 1900 and may not be able to function at all, observers warn.

 

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