II

106TH CONGRESS

1ST SESSION S. 96

To regulate commerce between and among the several States by providing

for the orderly resolution of disputes arising out of computer-based

problems related to processing data that includes a 2-digit expression

of the year’s date.

IN THE SENATE OF THE UNITED STATES

JANUARY 19, 1999

Mr. MCCAIN introduced the following bill; which was read twice and referred

to the Committee on Commerce, Science, and Transportation

A BILL

To regulate commerce between and among the several States

by providing for the orderly resolution of disputes arising

out of computer-based problems related to processing

data that includes a 2-digit expression of the year’s

date.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Y2K Act’’.

5 SEC. 2. DEFINITIONS.

6 In this Act:
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1 (1) Y2K ACTION.—The term ‘‘Y2K action’’

2 means a civil action commenced in any Federal or

3 State court for a cause of action arising out of a

4 Y2K failure but does include an action to recover

5 damages for personal injury (excluding emotional

6 harm) or wrongful death.

7 (2) Y2K FAILURE.—The term ‘‘Y2K failure’’

8 means a systems product failure caused by the in9 ability of a computer system, program, or software’s

10 failure to accurately store, process, provide, or re11 ceive data containing the year-2000 date.

12 (3) Y2K-COMPLIANT.—The term ‘‘Y2K-compli13 ant’’ means—

14 (A) with respect to an information tech15 nology product, that the product does not have

16 a Y2K failure; and

17 (B) with respect to a business, that none

18 of that business’s information technology prod19 ucts that materially affects the business’s ca20 pacity to deliver goods and services has a Y2K

21 failure.

22 (4) INFORMATION TECHNOLOGY PRODUCT.—

23 The term ‘‘information technology product’’ means a

24 computer, a computer program, or computer soft-
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1 ware, or product using a computer program, chip, or

2 computer software.

3 SEC. 3. APPLICABILITY; PREEMPTION.

4 (a) APPLICABILITY TO Y2K ACTIONS.—This Act ap5 plies to any Y2K action, commenced after the date of en6 actment of this Act, brought in a Federal or State court.

7 (b) SCOPE OF PREEMPTION.—This Act supersedes

8 any State law regarding recovery for harm caused by a

9 Y2K failure only to the extent that this Act establishes

10 a rule of law applicable to any such recovery which is in11 consistent with State law. Any issue arising under this Act

12 that is not governed by any such rule of law shall be gov13 erned by applicable State or Federal law.

14 (c) ACTIONS FOR PERSONAL INJURY.—This Act does

15 not apply to a civil action brought for personal injury to

16 the extent that the action is based on physical injury.

17 SEC. 4. EXCLUSIVE REMEDIES.

18 (a) IN GENERAL.—The remedies provided by this Act

19 are the exclusive remedies available to a plaintiff in a Y2K

20 action, except as may be otherwise provided in a contract

21 to which the plaintiff and the defendant are parties.

22 (b) DEFENDANT’S OPPORTUNITY TO FIX PROB23 LEM.—A Y2K action may not proceed to trial until—
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1 (1) the plaintiff has notified the defendant in

2 writing, describing the Y2K failure with particular3 ity; and

4 (2) the plaintiff has afforded the defendant the

5 opportunity, including reasonable access to comput6 ers and computer software affected by the Y2K fail7 ure described in the notice, to fix the problem.

8 SEC. 5. DAMAGES.

9 (a) ECONOMIC LOSS.—Except as otherwise provided

10 in this section, damages awarded in a Y2K action are lim11 ited to economic loss.

12 (b) OTHER DAMAGES.—

13 (1) IN GENERAL.—Damages in a Y2K action

14 (including punitive damages) other than for eco15 nomic loss may not exceed the greater of—

16 (A) 3 times the amount awarded for eco17 nomic loss; or

18 (B) $250,000.

19 (2) SPECIAL RULE.—In the case of a

20 defendant—

21 (A) who—

22 (i) is sued in his or her capacity as a

23 individual; and

24 (ii) whose net worth does not exceed

25 $500,000; or
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1 (B) that is an unincorporated business, a

2 partnership, corporation, association, unit of

3 local government, or organization with fewer

4 than 25 full-time employees,

5 paragraph (1) shall be applied by substituting

6 ‘‘$50,000’’ for ‘‘$250,000’’ in subparagraph (B).

7 (c) PUNITIVE DAMAGES.—No amount shall be

8 awarded a plaintiff in a Y2K action for punitive

9 damages—

10 (1) except to the extent authorized by State

11 law; and

12 (2) unless the plaintiff proves that the economic

13 damages suffered resulted from conscious and fla14 grant disregard, rather than mere negligence, on the

15 part of the defendant.

16 (d) GOOD FAITH LIMITATION.—Damages in a Y2K

17 action may not be awarded, except for economic loss,

18 against any defendant who demonstrates that the defend19 ant exercised due diligence and reasonable care to prevent

20 or remedy the Y2K failure according to generally accepted

21 standards of care and effort in the business activity in

22 which the defendant was engaged.

23 SEC. 6. SEVERAL LIABILITY.

24 The liability of more than 1 defendant in a Y2K ac25 tion may be several but may not be joint.
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1 SEC. 7. APPOINTMENT OF SPECIAL MASTERS FOR Y2K AC2 TIONS.

3 Any District Court of the United States in which a

4 Y2K action is pending may appoint a special master to

5 hear the matter and to make findings of fact and conclu6 sions of law in accordance with Rule 53 of the Federal

7 Rules of Civil Procedure.

8 SEC. 8. LIABILITY RULES APPLICABLE TO PRODUCT SELL9 ERS, RENTERS, AND LESSORS.

10 (a) GENERAL RULE.—

11 (1) IN GENERAL.—In any Y2K action, an infor12 mation technology product seller other than a manu13 facturer shall be liable to a claimant only if the

14 claimant establishes—

15 (A) that—

16 (i) the information technology product

17 that allegedly caused the harm that is the

18 subject of the complaint was sold, rented,

19 or leased by the information technology

20 product seller;

21 (ii) the information technology prod22 uct seller failed to exercise reasonable care

23 with respect to the information technology

24 product; and
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1 (iii) the failure to exercise reasonable

2 care was a proximate cause of harm to the

3 claimant;

4 (B) that—

5 (i) the information technology product

6 seller made an express warranty applicable

7 to the information technology product that

8 allegedly caused the harm that is the sub9 ject of the complaint, independent of any

10 express warranty made by a manufacturer

11 as to the same information technology

12 product;

13 (ii) the information technology prod14 uct failed to conform to the warranty; and

15 (iii) the failure of the information

16 technology product to conform to the war17 ranty caused harm to the claimant; or

18 (C) that—

19 (i) the information technology product

20 seller engaged in intentional wrongdoing,

21 as determined under applicable State law;

22 and

23 (ii) such intentional wrongdoing was a

24 proximate cause of the harm that is the

25 subject of the complaint.
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1 (2) REASONABLE OPPORTUNITY FOR INSPEC2 TION.—For purposes of paragraph (1)(A)(ii), an in3 formation technology product seller shall not be con4 sidered to have failed to exercise reasonable care

5 with respect to an information technology product

6 based upon an alleged failure to inspect the informa7 tion technology product—

8 (A) if the failure occurred because there

9 was no reasonable opportunity to inspect the in10 formation technology product; or

11 (B) if the inspection, in the exercise of rea12 sonable care, would not have revealed the as13 pect of the information technology product

14 which allegedly caused the claimant’s harm.

15 (b) SPECIAL RULE.—

16 (1) IN GENERAL.—An information technology

17 product seller shall be liable as a manufacturer of an

18 information technology product for harm caused by

19 the information technology product if—

20 (A) the manufacturer is not subject to

21 service of process under the laws of any State

22 in which the action may be brought; or

23 (B) the court determines that the claimant

24 would be unable to enforce a judgment against

25 the manufacturer.
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1 (2) STATUTE OF LIMITATIONS.—For purposes

2 of this subsection only, the statute of limitations ap3 plicable to claims asserting liability of an informa4 tion technology product seller as a manufacturer

5 shall be tolled from the date of the filing of a com6 plaint against the manufacturer to the date that

7 judgment is entered against the manufacturer.

8 (c) RENTED OR LEASED PRODUCTS.—Any person

9 engaged in the business of renting or leasing an informa10 tion technology product (other than a person that is an

11 information technology product manufacturer or a seller

12 liable as a manufacturer under paragraph (1)) shall be

13 subject to liability in a Y2K action, but any person en14 gaged in the business of renting or leasing an information

15 technology product shall not be liable to a claimant for

16 the acts of another solely by reason of ownership of such

17 information technology product.

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