Jeff Shuttleworth

Concord swimming coach Tom Johnson is now a lap up on major retailers he thinks keep customers in the dark about potential Y2K problems in their merchandise.

A judge recently ruled that Johnson can plunge ahead with a lawsuit alleging that seven major retailers are violating California's Unfair Business Practices Act by failing to disclose to customers whether products they purchase are Year 2000 compliant.

The retailers, Circuit City, Fry's Electronics, The Good Guys, CompUSA, Office Depot, Staples and Office Max, sought to have Johnson's suit dismissed on a variety of grounds, including that it didn't mention any specific misrepresentations by salespeople. But Johnson's attorney, Kenneth G. Jones of the Walnut Creek firm Bowles and Verna, said Contra Costa County Superior Court Judge James Trembath ruled the suit could go forward because it's not alleging fraud and seeking damages, it's just a court order requiring the retailers to tell which goods are Y2K compliant.

Johnson believes that's the least retailers can do for customers who are about to spend a couple thousand dollars on a computer, Jones said.

"We're not saying retailers should radically change what they are doing, we just want them to say what they know," he said. "A salesperson should tell you one of three things: if a product is Y2K compliant, it's not compliant, or they just don't know."

The Y2K problem stems from many older computers and computer chips recording dates by using only the last two digits of the year. If their internally programmed clocks interpret 00 to mean the year 1900 instead of 2000, it's feared a variety of glitches or outright system failures will happen.

If Johnson wins his suit, there could be far-reaching effects on computer retailers and other merchants.

Most previous Year 2000 suits have been against manufacturers, who have been able to get them thrown out of court by arguing that free upgrades are now available or may be developed by the Year 2000 which could fix non-compliant products.

Rich Ergo, Jones' partner, said Johnson's suit is different because it focuses on retailers, who have the most contact with consumers and should inform consumers of a product's potential for failure. That way, the consumer knows before spending money on a product whether it will be necessary to look for upgrades in the future, Ergo said.

The suit, which was filed January 14, alleges that the retailers "have sold numerous computer software products in their California stores which are non-Year 2000 compliant." It mentions many specific products, including Quicken versions prior to 1999; Norton AntiVirus versions prior to 4.0.; Microsoft Works versions 4.0, 4.0(a) and 4.5; and Windows 98.

The retailers aren't saying much about the suit. A spokeswoman for The Good Guys said, "At this time we can't comment on the lawsuit because it is in progress." An attorney for Office Depot, Timothy Crudo, said, "We are reviewing our options" now that the suit is going forward.

In a brief filed before the recent pretrial hearing, the retailers' lawyers said Johnson is seeking to impose "an impossible burden" on the retailers by requiring them to research all of the Year 2000 implications regarding each of the hundreds of products they sell, then train all their employees to become experts on that issue. The burden of informing consumers about complex electronic products should be borne by the manufacturers who created them, the lawyers said.

Applying a different analysis "would have a dramatic effect on the computer industry," the lawyers said. Investigating products and educating employees "would dramatically slow, if not halt, sales of computer hardware and software in the State of California," they said, warning that computer goods would not be the only products affected by this process. Any product sold by a retailer would be subject to the disclosure standards sought by Johnson, they said.

Congress already has passed legislation shielding businesses from lawsuits over the Y2K problem and three more bills have been filed since January, the retailers' lawyers said. They urged the court leave the matter to Congress and the California Legislature.

But Judge Trembath rejected the retailers' arguments and set a May 7 hearing on pretrial discovery issues. Jones said he hopes the case will go to trial in August or September, arguing that time is of the essence. But Jones said he expects delay tactics from the retailers.

"It's a great game of cat and mouse and I anticipate roadblocks all along," he said.

Reach Shuttleworth at jshuttleworth@amcity.com or 925-598-1432.

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-- (trend@watcher.now), May 03, 1999