Law shielding companies from Y2K suits invoked in only 18 cases
By D. IAN HOPPER, Associated Press
WASHINGTON (September 24, 2000 4:42 p.m. EDT http://www.nandotimes.com) - Worried that a flood of Y2K lawsuits would threaten the economy, Congress last year passed legislation to limit
lawsuits related to the computer problem and save American businesses billions of dollars in legal costs.
Government investigators now report that companies invoked it in
court just 18 times, which a congressional critic saw as a
"fitting postscript" to Y2K alarms that never materialized.
Sen. Patrick Leahy, D-Vt., who voted against the legislation
last year and commissioned the General Accounting Office report,
said the study "confirms that in the courts, the Y2K bill was
mostly used by big companies to delay or sidetrack relief to
consumers."
He added, "This is a lesson for the next time special interests
ask Congress for special legal protections."
A colleague who worked to pass the measure countered that it
helped businesses concentrate on solving the Y2K problem.
"The Y2K Act encouraged businesses to be proactive in
addressing and remedying their Y2K challenges, rather than
defensive and fearful of a predicted flood of lawsuits," Sen. Christopher Dodd, D-Conn., said.
"The success with which our nation's businesses met the Y2K
issue was in significant part facilitated by this legislation."
The report by the investigative arm of Congress showed that
defendants used the Y2K Act 12 times in federal court and 6 times
in state courts. The suits involved class actions by customers,
disputes between businesses and disputes against insurers.
Compilers said they had no way to tell how many times the law was
invoked to keep cases out of court.
In many cases, defendants invoking the Y2K Act eventually
settled the cases or had them dismissed. Ten cases were pending
when the report was finished last month.
The law allowed defendants to move some state cases to federal
court, challenge class action lawsuits and force plaintiffs to use
mediation.
The Y2K problem occurred because of the fear that some computer
programs, especially older ones, might fail when the date changed
to 2000. Because the programs were written to recognize only the
last two digits of a year to save space, such programs could have
read the digits "00" as 1900 instead of 2000.
The United States spent about $100 billion to fix the problem.
The problems after the rollover were sporadic and very few, but
some computers left unrepaired did fail.
The bill passed overwhelmingly in both the House and Senate.
President Clinton repeatedly threatened to veto early versions,
which he said went too far in restricting Americans' rights to sue
for full compensation for wrongs.
Senate Democrats negotiated with the White House to give the
bill added protections for consumers.
"I hope that we find that the Y2K Act succeeds in helping to
screen out frivolous claims without blocking or unduly burdening
legitimate suits," Clinton said in a statement when he signed the
bill in July 1999.
"We will be watching to see whether the bill's provisions are
misused by parties who did little or nothing to remediate in order
to defeat claims brought by those harmed by irresponsible
conduct."
Sen. John McCain, R-Ariz., chief Senate sponsor, argued during
negotiations with the White House that an avalanche of lawsuits
could have a "crippling effect on our economy." Some experts
estimated $1 trillion in civil actions.
Among examples cited in the as-yet-unreleased GAO report, which
was obtained by The Associated Press:
-- FactFinder (FactFinder@bzn.com), September 24, 2000