Home > 106th Congressional Bills > H.R. 775 (eh) To establish certain procedures for civil actions brought for damages relating to the failure of any device or system to process or otherwise deal with the transition from the year 1999 to the year 2000, and for other purposes. [Engrossed in...H.R. 775 (eh) To establish certain procedures for civil actions brought for damages relating to the failure of any device or system to process or otherwise deal with the transition from the year 1999 to the year 2000, and for other purposes. [Engrossed in...
In the Senate of the United States,
June 15, 1999.
Resolved, That the bill from the House of Representatives (H.R.
775) entitled ``An Act to establish certain procedures for civil
actions brought for damages relating to the failure of any device or
system to process or otherwise deal with the transition from the year
1999 to the year 2000, and for other purposes.'', do pass with the
following
AMENDMENT:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE; TABLE OF SECTIONS.
(a) Short Title.--This Act may be cited as the ``Y2K Act''.
(b) Table of Sections.--The table of sections for this Act is as
follows:
Sec. 1. Short title; table of sections.
Sec. 2. Findings and purposes.
Sec. 3. Definitions.
Sec. 4. Application of Act.
Sec. 5. Punitive damages limitations.
Sec. 6. Proportionate liability.
Sec. 7. Prelitigation notice.
Sec. 8. Pleading requirements.
Sec. 9. Duty to mitigate.
Sec. 10. Application of existing impossibility or commercial
impracticability doctrines.
Sec. 11. Damages limitation by contract.
Sec. 12. Damages in tort claims.
Sec. 13. State of mind; bystander liability; control.
Sec. 14. Appointment of special masters or magistrate judges for Y2K
actions.
Sec. 15. Y2K actions as class actions.
Sec. 16. Applicability of State law.
Sec. 17. Admissible evidence ultimate issue in State courts.
Sec. 18. Suspension of penalties for certain year 2000 failures by
small business concerns.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that:
(1)(A) Many information technology systems, devices, and
programs are not capable of recognizing certain dates in 1999
and after December 31, 1999, and will read dates in the year
2000 and thereafter as if those dates represent the year 1900
or thereafter or will fail to process dates after December 31,
1999.
(B) If not corrected, the problem described in
subparagraph (A) and resulting failures could incapacitate
systems that are essential to the functioning of markets,
commerce, consumer products, utilities, Government, and safety
and defense systems, in the United States and throughout the
world.
(2) It is in the national interest that producers and users
of technology products concentrate their attention and
resources in the time remaining before January 1, 2000, on
assessing, fixing, testing, and developing contingency plans to
address any and all outstanding year 2000 computer date-change
problems, so as to minimize possible disruptions associated
with computer failures.
(3)(A) Because year 2000 computer date-change problems may
affect virtually all businesses and other users of technology
products to some degree, there is a substantial likelihood that
actual or potential year 2000 failures will prompt a
significant volume of litigation, much of it insubstantial.
(B) The litigation described in subparagraph (A) would have
a range of undesirable effects, including the following:
(i) It would threaten to waste technical and
financial resources that are better devoted to curing
year 2000 computer date-change problems and ensuring
that systems remain or become operational.
(ii) It could threaten the network of valued and
trusted business and customer relationships that are
important to the effective functioning of the national
economy.
(iii) It would strain the Nation's legal system,
causing particular problems for the small businesses
and individuals who already find that system
inaccessible because of its complexity and expense.
(iv) The delays, expense, uncertainties, loss of
control, adverse publicity, and animosities that
frequently accompany litigation of business disputes
could exacerbate the difficulties associated with the
date change and work against the successful resolution
of those difficulties.
(4) It is appropriate for the Congress to enact legislation
to assure that Y2K problems do not unnecessarily disrupt
interstate commerce or create unnecessary caseloads in Federal
courts and to provide initiatives to help businesses prepare
and be in a position to withstand the potentially devastating
economic impact of Y2K.
(5) Resorting to the legal system for resolution of Y2K
problems is not feasible for many businesses and individuals
who already find the legal system inaccessible, particularly
small businesses and individuals who already find the legal
system inaccessible, because of its complexity and expense.
(6) The delays, expense, uncertainties, loss of control,
adverse publicity, and animosities that frequently accompany
litigation of business disputes can only exacerbate the
difficulties associated with the Y2K date change, and work
against the successful resolution of those difficulties.
(7) Concern about the potential for liability--in
particular, concern about the substantial litigation expense
associated with defending against even the most insubstantial
lawsuits--is prompting many persons and businesses with
technical expertise to avoid projects aimed at curing year 2000
computer date-change problems.
(8) A proliferation of frivolous Y2K lawsuits by
opportunistic parties may further limit access to courts by
straining the resources of the legal system and depriving
deserving parties of their legitimate rights to relief.
(9) Congress encourages businesses to approach their Y2K
disputes responsibly, and to avoid unnecessary, time-consuming
and costly litigation about Y2K failures, particularly those
that are not material. Congress supports good faith
negotiations between parties when there is a dispute over a Y2K
problem, and, if necessary, urges the parties to enter into
voluntary, nonbinding mediation rather than litigation.
(b) Purposes.--Based upon the power of the Congress under Article
I, Section 8, Clause 3 of the Constitution of the United States, the
purposes of this Act are--
(1) to establish uniform legal standards that give all
businesses and users of technology products reasonable
incentives to solve Y2K computer date-change problems before
they develop;
(2) to encourage continued Y2K remediation and testing
efforts by providers, suppliers, customers, and other
contracting partners;
(3) to encourage private and public parties alike to
resolve Y2K disputes by alternative dispute mechanisms in order
to avoid costly and time-consuming litigation, to initiate
those mechanisms as early as possible, and to encourage the
prompt identification and correction of Y2K problems; and
(4) to lessen the burdens on interstate commerce by
discouraging insubstantial lawsuits while preserving the
ability of individuals and businesses that have suffered real
injury to obtain complete relief.
SEC. 3. DEFINITIONS.
In this Act:
(1) Y2K action.--The term ``Y2K action''--
(A) means a civil action commenced in any Federal
or State court, or an agency board of contract appeal
proceeding, in which the plaintiff's alleged harm or
injury resulted from a Y2K failure;
(B) includes a civil action commenced in any
Federal or State court by a governmental entity when
acting in a commercial or contracting capacity; but
(C) does not include an action brought by a
governmental entity acting in a regulatory,
supervisory, or enforcement capacity.
(2) Y2K failure.--The term ``Y2K failure'' means failure by
any device or system (including any computer system and any
microchip or integrated circuit embedded in another device or
product), or any software, firmware, or other set or collection
of processing instructions to process, to calculate, to
compare, to sequence, to display, to store, to transmit, or to
receive year-2000 date-related data, including failures--
(A) to deal with or account for transitions or
comparisons from, into, and between the years 1999 and
2000 accurately;
(B) to recognize or accurately to process any
specific date in 1999, 2000, or 2001; or
(C) accurately to account for the year 2000's
status as a leap year, including recognition and
processing of the correct date on February 29, 2000.
(3) Government entity.--The term ``government entity''
means an agency, instrumentality, or other entity of Federal,
State, or local government (including multijurisdictional
agencies, instrumentalities, and entities).
(4) Material defect.--The term ``material defect'' means a
defect in any item, whether tangible or intangible, or in the
provision of a service, that substantially prevents the item or
service from operating or functioning as designed or according
to its specifications. The term ``material defect'' does not
include a defect that--
(A) has an insignificant or de minimis effect on
the operation or functioning of an item or computer
program;
(B) affects only a component of an item or program
that, as a whole, substantially operates or functions
as designed; or
(C) has an insignificant or de minimis effect on
the efficacy of the service provided.
(5) Personal injury.--The term ``personal injury'' means
physical injury to a natural person, including--
(A) death as a result of a physical injury; and
(B) mental suffering, emotional distress, or
similar injuries suffered by that person in connection
with a physical injury.
(6) State.--The term ``State'' means any State of the
United States, the District of Columbia, the Commonwealth of
Puerto Rico, the Northern Mariana Islands, the United States
Virgin Islands, Guam, American Samoa, and any other territory
or possession of the United States, and any political
subdivision thereof.
(7) Contract.--The term ``contract'' means a contract,
tariff, license, or warranty.
(8) Alternative dispute resolution.--The term ``alternative
dispute resolution'' means any process or proceeding, other
than adjudication by a court or in an administrative
proceeding, to assist in the resolution of issues in
controversy, through processes such as early neutral
evaluation, mediation, minitrial, and arbitration.
SEC. 4. APPLICATION OF ACT.
(a) General Rule.--This Act applies to any Y2K action brought in a
State or Federal court after January 1, 1999, for a Y2K failure
occurring before January 1, 2003, including any appeal, remand, stay,
or other judicial, administrative, or alternative dispute resolution
proceeding in such an action.
(b) No New Cause of Action Created.--Nothing in this Act creates a
new cause of action, and, except as otherwise explicitly provided in
this Act, nothing in this Act expands any liability otherwise imposed
or limits any defense otherwise available under Federal or State law.
(c) Claims for Personal Injury or Wrongful Death Excluded.--This
Act does not apply to a claim for personal injury or for wrongful
death.
(d) Contract Preservation.--
(1) In general.--Subject to paragraph (2), in any Y2K
action any written contractual term, including a limitation or
an exclusion of liability, or a disclaimer of warranty, shall
be strictly enforced unless the enforcement of that term would
manifestly and directly contravene applicable State law
embodied in any statute in effect on January 1, 1999,
specifically addressing that term.
(2) Interpretation of contract.--In any Y2K action in which
a contract to which paragraph (1) applies is silent as to a
particular issue, the interpretation of the contract as to that
issue shall be determined by applicable law in effect at the
time the contract was executed.
(e) Preemption of State Law.--This Act supersedes State law to the
extent that it establishes a rule of law applicable to a Y2K action
that is inconsistent with State law, but nothing in this Act
implicates, alters, or diminishes the ability of a State to defend
itself against any claim on the basis of sovereign immunity.
(f) Application with Year 2000 Information and Readiness Disclosure
Act.--Nothing in this Act supersedes any provision of the Year 2000
Information and Readiness Disclosure Act.
(g) Application to Actions Brought by a Governmental Entity.--
(1) In general.--To the extent provided in this subsection,
this Act shall apply to an action brought by a governmental
entity described in section 3(1)(C).
(2) Definitions.--In this subsection:
(A) Defendant.--
(i) In general.--The term ``defendant''
includes a State or local government.
(ii) State.--The term ``State'' means each
of the several States of the United States, the
District of Columbia, the Commonwealth of
Puerto Rico, the Virgin Islands, Guam, American
Samoa, and the Commonwealth of the Northern
Mariana Islands.
(iii) Local government.--The term ``local
government'' means--
(I) any county, city, town,
township, parish, village, or other
general purpose political subdivision
of a State; and
(II) any combination of political
subdivisions described in subclause (I)
recognized by the Secretary of Housing
and Urban Development.
(B) Y2K upset.--The term ``Y2K upset''--
(i) means an exceptional incident involving
temporary noncompliance with applicable
federally enforceable measurement or reporting
requirements because of factors related to a
Y2K failure that are beyond the reasonable
control of the defendant charged with
compliance; and
(ii) does not include--
(I) noncompliance with applicable
federally enforceable requirements that
constitutes or would create an imminent
threat to public health, safety, or the
environment;
(II) noncompliance with applicable
federally enforceable requirements that
provide for the safety and soundness of
the banking or monetary system,
including the protection of depositors;
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