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Millennium bug going to court; Senate prepares for battle

Editor’s Note: Y2K and millennium issues are featured every Monday. This is the first of a two-part series on Y2K and the law.

Call it Mr. Glitch goes to Washington.

Around the world it is known as Y2K – the potential computer problem that could send date-sensitive systems into turmoil when the clock ticks over to Jan. 1, 2000.



But in the halls of the U.S. Senate, it’s known as S. 96. Yes, the millennium bug has made its way to Congress. And it seems to be stuck there.

Sponsored by Sen. John McCain, R-Ariz., S. 96 is a U.S. Senate bill that would protect companies against lawsuits stemming from year 2000 computer problems.




Example: Say that you are a business owner, and you hire a contractor to make your PC systems Y2K compliant. New Year’s Eve hits, and your computers crash. You lose business. Can you sue the contractor?

This is a notion that has the business community very nervous – and many law firms salivating. Technology law has been growing steadily over the past decade, and many attorneys – in fact, entire practices – have been readying to take on nothing but Y2K-related litigation in the year 2000.

Many in congress want to head off this potential rush to the courthouse; what some are calling the “Y2K Liability Bonanza.” Some states have already passed their own Y2K litigation laws, and many others – such as California – are debating the issue.

But McCain and others – such as California Sen. Dianne Feinstein, who co-authored the bill – think that it is important to work out a solution at the federal level.

To the surprise of almost no one, the bill stalled in the Senate on Tuesday – for the second time a victim of an unrelated political battle. A vote to proceed with the debate on S. 96 failed by seven votes (60 yes votes were needed, and the senate voted in favor 53-45).

A similar measure limiting lawsuits has already been approved by the House of Representatives.

Many Senate Democrats voted against the motion to proceed because they feel that a more important issue is at hand: namely, the pending juvenile justice bill. Democrats do not want the Millennium Bug to impede their push toward what has become a quest for harsher gun-control measures.

Democrats also defeated a similar motion to proceed in March, saying that Republican limits on the bill were unacceptable.

“I am committed to working with both sides on this compelling issue,” said McCain. “It’s important that we get something done.”

But some Democrats are reluctant to pass Y2K legislation.

“Why should we give companies a ‘get out of jail free’ card?” asked Sen. Fritz Hollings, D-NC. “They’re just preoccupied with their stock options.”

Democratic leader Tom Daschle of South Dakota said he wanted to get back to work on the Y2K bill, but only after the juvenile justice bill is completed.

On Saturday, Department of Housing and Urban Development chief Jack Kemp sent a letter to all 100 senators urging them to adopt McCain’s measure, which would “protect corporations from frivolous Y2K suits.

“White House loyalty to the trial lawyers is no excuse to play games with this bill,” Kemp said in his statement.

The bill places a mandatory 90-day waiting period on lawsuits related to year 2000 breakdowns, establishes proportionate liability in class action suits, and would send most of these suits to the federal court system.

Proponents of the bill say that Y2K lawsuits could clog the court system and result in more than $1 trillion in legal costs. But opponents claim that the bill could harm small businesses.

“(The bill) puts small businesses in a very difficult economic situation,” said Sen. John Kerry, D-Mass. “And it dismantles state tort laws.”

President Clinton, by the way, has vowed to veto S. 96 if it ever reaches his desk.

The Associated Press contributed to this report.


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