McCain and Wyden to Offer Amended Version of the Y2K Act

(April 26, 1999) Sen. John McCain and Sen. Ron Wyden announced on April 19 that they will offer a substitute amendment to S 96 when the Senate takes up consideration of the bill. S 96, the "Y2K Act," reforms litigation procedure and remedies in lawsuits arising out of Year 2000 technology problems.

The McCain-Wyden version of S 96 would replace joint and several liability with proportionate liability in most situations; require a 30 day notice of intent to sue, and then allow another 60 days to remediate; limit punitive damages for small businesses, eliminate them for large businesses, and disallow them against government defendants; eliminate personal liability caps for officers and directors; and preserve state evidentiary standards for claims such as fraud. The bill would not affect personal injury or wrongful death claims.

	Sen. John McCain

Sen. John McCain (R-AZ) is the sponsor and floor manager of S 96. He described the purpose of the bill in an April 26 statement as follows:

"It is my hope that S.96 will be the catalyst for technology producers to work with technology users to ensure a seamless transition from 1999 to the year 2000. My goal is to make January 1, a non-event. The purpose of this legislation is to ensure that we solve the Y2K technology glitch, rather than clog our courts with years of costly litigation. The purpose is to ensure a continued stable economy, which is beneficial to everyone in our country."

Previously, support for S 96 came from Republican ranks. "The substitute amendment we will offer today is truly a bipartisan effort," said Sen. McCain. "We have worked diligently with our colleagues on both sides of the aisle to address concerns, narrow some provisions and assure that this bill will sunset when it is no longer pertinent and necessary. Senator Wyden, who said at our committee mark-up that he wanted to get to 'yes,' has worked tirelessly with me to get there."

Sen. Ron Wyden

Sen. Ron Wyden (D-OR) stated that "Congress needs to act to make sure that the Y2K problem doesn't prove as overwhelming for employees, pension funds, and shareholders as it may be for some computer systems. We should do that by creating incentives for remediation, not litigation. I believe Chairman McCain has taken significant steps to protect both consumers and businesses, and I look forward to working with him to pass this into law." (See, April 19 press release.)

The Senate Commerce Committee, which Sen. McCain chairs, adopted S 96 RS on March 3, 1999, on a straight party line vote.

The following is a summary of the McCain-Wyden version, which Sen. McCain and Sen. Wyden intend to introduce as a substitute amendment to S 96 RS during consideration by the Senate this week.

The bill applies to any "Y2K failure occurring before January 1, 2003". However, it does "not apply to a claim for personal injury or for wrongful death." Nor does it interfere with any contractual terms regarding Y2K liability.

It limits punitive damages in certain circumstances, and provides that they are not available against government defendants.

It replaces joint and several liability with proportionate liability, but provides several exceptions.

It provides for a 90 day cooling off period before litigation. That is, it requires a prospective plaintiff to give a 30 day notice to a prospective defendant of the plaintiff's intent to sue, along with a description of the Y2K problem. If the defendant responds with a plan to remediate, then the defendant is allowed an additional 60 days to resolve the problem.

It provides that in most Y2K class actions where the amount in controversy exceeds $1,000,000 the suit may be brought in, or removed to, federal district court. Also, it "supersedes State law to the extent that it establishes a rule of law applicable to a Y2K action that is inconsistent with State law".