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-- Linkmeister (link@librarian.edu), July 02, 1999

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U.S. Congress Approves Y2K Compromise

12:55 a.m. Jul 02, 1999 Eastern

By Adam Entous

WASHINGTON (Reuters) - In a victory for the high-tech industry, the U.S. Congress Thursday approved protections for companies against lawsuits stemming from year 2000 computer breakdowns.

The White House, which had threatened to veto earlier versions of the bill, said President Clinton would sign the measure into law.

Supporters said the legislation was needed to rein in lawyers plotting a millennium bug offensive that could bankrupt Silicon Valley companies and slow the nation's economic growth. According to some experts, Y2K-related litigation costs could add up to $1 trillion.

Consumer advocates who opposed the bill accused Clinton and Vice President Al Gore, the Democratic front-runner in the 2000 presidential election, of giving in to big business at the expense of American consumers.

The House approved the legislation 404-to-24. The Senate followed suit, approving the bill by a vote of 81-to-18.

The legislation, hammered out behind closed doors by congressional negotiators and the White House, will delay the filing of Y2K lawsuits for up to 90 days, giving companies time to fix any problems.

It will also make it harder for consumers to win lawsuits stemming from the glitch, and cap punitive damages.

Though many Democrats said it hurt consumers, White House Chief of Staff John Podesta said he would ``recommend to the president that he sign the bill when it comes to his desk.''

``In the normal course of business, the administration would oppose many of the extraordinary steps taken in this legislation to alter liability and procedural rules,'' Podesta said in a letter to lawmakers. But ``the Y2K problem is unique and unprecedented.''

[snip]

Fearing a flood of lawsuits, politically powerful business groups representing IBM, Microsoft Corp., AT&T Corp. and other high-tech firms asked Congress to step in. Republicans voted to limit the legal exposure that companies would face.

The action drew fire from trial lawyers and consumer groups who said Republicans were offering too much protection to big business. Under pressure, the White House threatened to veto the legislation, unless Republicans agreed to give ground.

A compromise was announced Tuesday.

``This is a huge victory that comes in the face of fierce opposition from trial lawyers,'' said Chamber of Commerce President Thomas Donohue.

Public Citizen, founded by consumer activist Ralph Nader, derided the compromise as ``cosmetic.'' They said the final bill still granted immunity to companies that manufacture Y2K-defective products, while rolling back consumer rights.

Under the compromise, the filing of Y2K lawsuits would be delayed during a 30- to 90-day cooling-off period. It will cap punitive damages at $250,000 for many small businesses, and ensure defendants pay for the damages they are responsible for by setting ``proportional liability'' guidelines.

The bill encourages companies to negotiate a settlement out of court, and clears the way for class action cases to be tried in federal court if they involve $10 million in claims or 100 or more plaintiffs.

The legislation will only apply to Y2K failures that occur before Jan. 1, 2003. It will not apply to personal injury and wrongful death claims.

Copyright 1999 Reuters Limited. All rights reserved.

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-- Linkmeister (link@librarian.edu), July 02, 1999.

Thanks, Link.

This development finally woke up my local radio station (WRKO, Boston). A morning talk show host, very cynical, very libertarian. The 60 Minutes piece sort of registered with him (gee, DC's gonna be toast?). The brownouts we have had this summer have also caused him pause (gee, if the utilities can't function when things are normal, what will it be like next year?)

But what *really* got his attention was Congress' need to protect all of these high-priced lobbying companies. Almost overnight, he went from no more than a 2 to maybe an 8, and this morning he was ranting that everyone needs to start preparing. Also encouraging, almost everyone who called in admitted to either being a long-time preparer, or finally getting started.

Wouldn't it be ironic if this legislation is what finally starts to turn JQP around!

-- Brooks (brooksbie@hotmail.com), July 02, 1999.

Yes Brooks, it would be 'refreshing' to find out JQP is actually paying attention to anything the government is doing, much less be able to interpret some of their actions! lol

-- Will continue (farming@home.com), July 02, 1999.