(2) CONTENTS OF SPECIAL INTERROGATORIES
OR FINDINGS.—The responses to interrogatories, or
findings, as appropriate, under paragraph (1) shall
specify the total amount of damages that the plain-
tiff is entitled to recover and the percentage of re-
sponsibility of each person found to have caused or
contributed to the loss incurred by the plaintiff or
plaintiffs.
(3) FACTORS FOR CONSIDERATION.—In deter-
mining the percentage of responsibility under this
subsection, the trier of fact shall consider—
(A) the nature of the conduct of each per-
son alleged to have caused or contributed to the
loss incurred by the plaintiff; and
(B) the nature and extent of the causal re-
lationship between the conduct of each such
person and the damages incurred by the plain-
tiff or plaintiffs.
(4) NONDISCLOSURE TO JURY.—The standard
for allocation of damages under paragraph (1) shall
not be disclosed to members of the jury.
SEC. 302. LIMITATION ON BYSTANDER LIABILITY FOR YEAR
2000 FAILURES.
(a) IN GENERAL.—With respect to any year 2000
claim for money damages in which—
(1) the defendant is not the manufacturer, sell-
er, or distributor of a product, or the provider of a
service, that suffers or causes the year 2000 failure
at issue;
(2) the plaintiff is not in substantial privity
with the defendant; and
(3) the defendant’s actual or constructive
awareness of an actual or potential year 2000 failure
is an element of the claim under applicable law,
the defendant shall not be liable unless the plaintiff, in
addition to establishing all other requisite elements of the
claim, proves by clear and convincing evidence that the
defendant actually knew, or recklessly disregarded a
known and substantial risk, that such failure would occur.
(b) SUBSTANTIAL PRIVITY.—For purposes of sub-
section (a)(2), a plaintiff and a defendant are in substan-
tial privity when, in a year 2000 claim arising out of the
performance of professional services, the plaintiff and the
defendant either have contractual relations with one an-
other or the plaintiff is a person who, prior to the defend-
ant’s performance of such services, was specifically identi-
fied to and acknowledged by the defendant as a person
for whose special benefit the services were being per-
formed.
(c) CERTAIN CLAIMS EXCLUDED.—For purposes of
subsection (a)(3), claims in which the defendant’s actual
or constructive awareness of an actual or potential year
2000 failure is an element of the claim under applicable
law do not include claims for negligence but do include
claims such as fraud, constructive fraud, breach of fidu-
ciary duty, negligent misrepresentation, and interference
with contract or economic advantage.
SEC. 303. REASONABLE EFFORTS DEFENSE.
With respect to any year 2000 claim seeking money
damages, except with respect to claims asserting breach
or repudiation of contract—
(1) the fact that a year 2000 failure occurred
in an entity, facility, system, product, or component
that was sold by, leased by, rented by, or otherwise
within the control of the party against whom the
claim is asserted shall not constitute the sole basis
for recovery; and
(2) the party against whom the claim is as-
serted shall be entitled to establish, as a complete
defense to the claim, that it took measures that were
reasonable under the circumstances to prevent the
year 2000 failure from occurring or from causing
the damages upon which the claim is based.
SEC. 304. DAMAGES LIMITATION.
(a) STANDARD FOR AWARDS.—With respect to any
year 2000 claim for which punitive damages may be
awarded under applicable law, the defendant shall not be
liable for punitive damages unless the plaintiff proves by
clear and convincing evidence that conduct carried out by
the defendant showed a conscious, flagrant indifference to
the rights or safety of others and was the proximate cause
of the harm or loss that is the subject of the year 2000
claim. This requirement is in addition to any other re-
quirement in applicable law for the award of such dam-
ages.
(b) CAPS ON PUNITIVE DAMAGES.—
(1) IN
GENERAL.—With respect to any year
2000 claim, if a defendant is found liable for puni-
tive damages, the amount of punitive damages that
may be awarded to a plaintiff shall not exceed the
greater of—
(A) three times the amount awarded to the
plaintiff for compensatory damages; or
(B) $250,000.
(2) SPECIAL RULE.—
(A) IN GENERAL.—Notwithstanding para-
graph (1), with respect to any year 2000 claim,
if the defendant is found liable for punitive
damages and the defendant—
(i) is an individual whose net worth
does not exceed $500,000;
(ii) is an owner of an unincorporated
business that has fewer than 25 full-time
employees; or
(iii) is—
(I) a partnership;
(II) corporation;
(III) association;
(IV) unit of local government; or
(V) organization,
that has fewer than 25 full-time employees,
the amount of punitive damages shall not ex-
ceed the lesser of three times the amount
awarded to the plaintiff for compensatory dam-
ages, or $250,000.
(B) APPLICABILITY.—For purposes of de-
termining the applicability of this paragraph to
a corporation, the number of employees of a
subsidiary of a wholly owned corporation shall
include all employees of a parent corporation or
any subsidiary of that parent corporation.
(3) APPLICATION
OF
LIMITATIONS
BY
THE
COURT.—The limitations contained in paragraphs
(1) and (2) shall be applied by the court and shall
not be disclosed to the jury.
SEC. 305. RECOVERY OF ECONOMIC DAMAGES FOR YEAR
2000 CLAIMS.
(a) LIMITATION
ON
RECOVERY
OF
ECONOMIC
LOSSES.—Subject to subsection (b), a plaintiff making a
year 2000 claim alleging a nonintentional tort may recover
economic losses only upon establishing, in addition to all
other elements of the claim under applicable law, that any
one of the following circumstances exists:
(1) The recovery of such losses is provided for
in a contract to which the plaintiff is a party.
(2) Such losses are incidental to a year 2000
claim based on damage to tangible personal or real
property caused by a year 2000 failure (other than
damage to property that is the subject of a contract
between the parties involved in the year 2000 claim).
(b) RECOVERY MUST BE PERMITTED UNDER APPLI-
CABLE LAW.—Economic losses shall be recoverable under
this section only if applicable Federal law, or applicable
State law embodied in statute or controlling judicial prece-
dent as of January 1, 1999, permits the recovery of such
losses.
SEC. 306. LIABILITY OF OFFICERS AND DIRECTORS.
(a) IN GENERAL.—A director, officer, or trustee of
a business or other organization (including a corporation,
unincorporated association, partnership, or nonprofit or-
ganization) shall not be personally liable with respect to
any year 2000 claim in his or her capacity as a director
or officer of the business or organization for an aggregate
amount that exceeds the greater of—
(1) $100,000; or
(2) the amount of cash compensation received
by the director or officer from the business or orga-
nization during the 12-month period immediately
preceding the act or omission for which liability was
imposed.
(b) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be deemed to impose, or to permit the imposition
of, personal liability on any director, officer, or trustee in
excess of the aggregate amount of liability to which such
director, officer, or trustee would be subject under applica-
ble State law in existence on January 1, 1999 (including
any charter or bylaw authorized by such State law).
TITLE IV—YEAR 2000 CLASS
ACTIONS
SEC. 401. MINIMUM INJURY REQUIREMENT.
(a) IN GENERAL.—In any year 2000 action involving
a year 2000 claim that a product or service is defective,
the action may be maintained as a class action in Federal
or State court as to that claim only if it satisfies all other
prerequisites established by applicable Federal or State
law and the court also finds that the alleged defect in the
product or service was a material defect as to a majority
of the members of the class.
(b) DETERMINATION BY COURT.—As soon as prac-
ticable after the commencement of a year 2000 action in-
volving a year 2000 claim that a product or service is de-
fective and that is brought as a class action, the court
shall determine by order whether the requirement set forth
in subsection (a) is satisfied. An order under this sub-
section may be conditional, and may be altered or amend-
ed before the decision on the merits.
SEC. 402. NOTIFICATION.
(a) NOTICE BY MAIL.—In any year 2000 action that
is maintained as a class action, the court, in addition to
any other notice required by applicable Federal or State
law, shall direct notice of the action to each member of
the class by United States mail, return receipt requested.
Persons whose actual receipt of the notice is not verified
by the court or by counsel for one of the parties shall be
excluded from the class unless those persons inform the
court in writing, on a date no later than the commence-
ment of trial or entry of judgment, that they wish to join
the class.
(b) CONTENTS OF NOTICE.—In addition to any infor-
mation required by applicable Federal or State law, the
notice described in this subsection shall—
(1) concisely and clearly describe the nature of
the action;
(2) identify the jurisdiction whose law will gov-
ern the action and where the action is pending;
(3) identify any potential claims that class
counsel chose not to pursue so that the action would
satisfy class certification requirements;
(4) describe the fee arrangements with class
counsel, including the hourly fee being charged, or,
if it is a contingency fee, the percentage of the final
award which will be paid, including an estimate of
the total amount that would be paid if the requested
damages were to be granted; and
(5) describe the procedure for opting out of the
class.
(c) SETTLEMENT.—The parties to a year 2000 action
that is brought as a class action may not enter into, nor
request court approval of, any settlement or compromise
before the class has been certified.
SEC. 403. DISMISSAL PRIOR TO CERTIFICATION.
Before determining whether to certify a class in a
year 2000 action, the court may decide a motion to dis-
miss or for summary judgment made by any party if the
court concludes that decision will promote the fair and ef-
ficient adjudication of the controversy and will not cause
undue delay.
SEC. 404. FEDERAL JURISDICTION IN YEAR 2000 CLASS AC-
TIONS.
(a) JURISDICTION.—Except as provided in subsection
(b), a year 2000 action may be brought as a class action
in the United States district court or removed to the ap-
propriate United States district court if the amount in
controversy is greater than the sum or value of $1,000,000
(exclusive of interest and costs), computed on the basis
of all claims to be determined in the action.
(b) EXCEPTION.—A year 2000 action shall not be
brought or removed as a class action under this section
if—
(1)(A) the substantial majority of the members
of the proposed plaintiff class are citizens of a single
State of which the primary defendants are also citi-
zens; and
(B) the claims asserted will be governed pri-
marily by the laws of that State; or
(2) the primary defendants are States, State of-
ficials, or other governmental entities against whom
the United States district court may be foreclosed
from ordering relief.
TITLE V—CLIENT PROTECTION
IN CONNECTION WITH YEAR
2000 ACTIONS
SEC. 501. SCOPE.
This title applies to any year 2000 action asserted
or brought in Federal or State court.
SEC. 502. DEFINITIONS.
In this title:
(1) ATTORNEY.—the term ‘‘attorney’’ means
any natural person, professional law association, cor-
poration, or partnership authorized under applicable
State law to practice law.
(2) ATTORNEY’S SERVICES.—The term ‘‘attor-
ney’s services’’ means the professional advice or
counseling of or representation by an attorney, but
such term shall not include other assistance in-
curred, directly or indirectly, in connection with an
attorney’s services, such as administrative or secre-
tarial assistance, overhead, travel expenses, witness
fees, or preparation by a person other than the at-
torney of any study, analysis, report, or test.
(3) CONTINGENT FEE.—The term ‘‘contingent
fee’’ means the cost or price of an attorney’s services
determined by applying a specified percentage, which
may be a firm fixed percentage, a graduated or slid-
ing percentage, or any combination thereof, to the
amount of the settlement or judgment obtained.
(4) HOURLY
FEE.—The term ‘‘hourly fee’’
means the cost or price per hour of an attorney’s
services.
(5) RETAIN.—The term ‘‘retain’’ means the act
of a client in engaging an attorney’s services, wheth-
er by express or implied agreement, by seeking and
obtaining the attorney’s services.
SEC. 503. CONSUMER’S RIGHT TO UP-FRONT DISCLOSURE
OF INFORMATION REGARDING FEES AND
SETTLEMENT PROPOSALS.
Before being retained by a client with respect to a
year 2000 claim or a year 2000 action, an attorney shall
disclose to the client the client’s rights under this title and
the client’s right to receive a written statement of the in-
formation described under sections 504 and 505.
SEC. 504. INFORMATION AFTER INITIAL MEETING.
(a) WRITTEN DISCLOSURE
OF FEES.—Within 30
days after the disclosure described under section 503, an
attorney retained by a client with respect to a year 2000
claim or a year 2000 action shall provide a written state-
ment to the client setting forth—
(1) in the case of an attorney retained on an
hourly basis, the attorney’s hourly fee for services in
pursuing the year 2000 claim or year 2000 action
and any conditions, limitations, restrictions, or other
qualifications on the fee, including likely expenses
and the client’s obligation for those expenses; and
(2) in the case of an attorney retained on a
contingent fee basis, the attorney’s contingent fee
for services in pursuing the year 2000 claim or year
2000 action and any conditions, limitations, restric-
tions, or other qualifications on the fee, including
likely expenses and the client’s obligation for those
expenses.
(b) CONSUMER’S RIGHT TO TIMELY UPDATED IN-
FORMATION ABOUT FEES.—In addition to the require-
ments contained in subsection (a), in the case of an attor-
ney retained on an hourly basis, the attorney shall also
render regular statements (at least once each 90 days) to
the client containing a description of hourly charges and
expenses incurred in the pursuit of the client’s year 2000
claim or year 2000 action by each attorney assigned to
the client’s matter.
SEC. 505. CONSUMER’S RIGHT TO TIMELY UPDATED INFOR-
MATION ABOUT SETTLEMENT PROPOSALS
AND DETAILED STATEMENT OF HOURS AND
FEES.
An attorney retained by a client with respect to a
year 2000 claim or a year 2000 action shall advise the
client of all written settlement offers to the client and of
the attorney’s estimate of the likelihood of achieving a
more or less favorable resolution to the year 2000 claim
or year 2000 action, the likely timing of such resolution,
and the likely attorney’s fees and expenses required to ob-
tain such a resolution. An attorney retained by a client
with respect to a year 2000 claim or a year 2000 action
shall, within a reasonable time not later than 60 days after
the date on which the year 2000 claim or year 2000 action
is finally settled or adjudicated, provide a written state-
ment to the client containing—
(1) in the case of an attorney retained on an
hourly basis, the actual number of hours expended
by each attorney on behalf of the client in connec-
tion with the year 2000 claim or year 2000 action,
the attorney’s hourly rate, and the total amount of
hourly fees; and
(2) in the case of an attorney retained on a
contingent fee basis, the total contingent fee for the
attorney’s services in connection with the year 2000
claim or year 2000 action.
SEC. 506. CLASS ACTIONS.
An attorney representing a class or a defendant in
a year 2000 action maintained as a class action shall make
the disclosures required under this title to the presiding
judge, in addition to making such disclosures to each
named representative of the class. The presiding judge
shall, at the outset of the year 2000 action, determine a
reasonable attorney’s fee by determining the appropriate
hourly rate and the maximum percentage of the recovery
to be paid in attorney’s fees. Notwithstanding any other
provision of law or agreement to the contrary, the pre-
siding judge shall award attorney’s fees only pursuant to
this title.
SEC. 507. AWARD OF REASONABLE COSTS AND ATTORNEY’S
FEES AFTER AN OFFER OF SETTLEMENT.
(a) OFFER OF SETTLEMENT.—With respect to any
year 2000 claim, any party may, at any time not less than
10 days before trial, serve upon any adverse party a writ-
ten offer to settle the year 2000 claim for money or prop-
erty, including a motion to dismiss the claim, and to enter
into a stipulation dismissing the claim or allowing judg-
ment to be entered according to the terms of the offer.
Any such offer, together with proof of service thereof, shall
be filed with the clerk of the court.
(b) ACCEPTANCE OF OFFER.—If the party receiving
an offer under subsection (a) serves written notice on the
offeror that the offer is accepted, either party may then
file with the clerk of the court the notice of acceptance,
together with proof of service thereof.
(c) FURTHER OFFERS NOT PRECLUDED.—The fact
that an offer under subsection (a) is made but not accept-
ed does not preclude a subsequent offer under subsection
(a). Evidence of an offer is not admissible for any purpose
except in proceedings to enforce a settlement, or to deter-
mine costs and expenses under this section.
(d) EXEMPTION OF CLAIMS.—At any time before
judgment is entered, the court, upon its own motion or
upon the motion of any party, may exempt from this sec-
tion any year 2000 claim that the court finds presents
a question of law or fact that is novel and important and
that substantially affects nonparties. If a claim is exempt-
ed from this section, all offers made by any party under
subsection (a) with respect to that claim shall be void and
have no effect.
(e) PETITION FOR PAYMENT OF COSTS, ETC.—If all
offers made by a party under subsection (a) with respect
to a year 2000 claim, including any motion to dismiss the
claim, are not accepted and the dollar amount of the judg-
ment, verdict, or order that is finally issued (exclusive of
costs, expenses, and attorneys’ fees incurred after judg-
ment or trial) with respect to the year 2000 claim is not
more favorable to the offeree with respect to the year 2000
claim than the last such offer, the offeror may file with
the court, within 10 days after the final judgment, verdict,
or order is issued, a petition for payment of costs and ex-
penses, including attorneys’ fees, incurred with respect to
the year 2000 claim from the date the last such offer was
made or, if the offeree made an offer under this section,
from the date the last such offer by the offeree was made.
(f) ORDER TO PAY COSTS, ETC.—If the court finds,
pursuant to a petition filed under subsection (e) with re-
spect to a year 2000 claim, that the dollar amount of the
judgment, verdict, or order that is finally issued is not
more favorable to the offeree with respect to the year 2000
claim than the last such offer, the court shall order the
offeree to pay the offeror’s costs and expenses, including
attorneys’ fees, incurred with respect to the year 2000
claim from the date the last offer was made or, if the
offeree made an offer under this section, from the date
the last such offer by the offeree was made, unless the
court finds that requiring the payment of such costs and
expenses would be manifestly unjust.
(g) AMOUNT OF ATTORNEY’S FEES.—Attorney’s fees
under subsection (f) shall be a reasonable attorney’s fee
attributable to the year 2000 claim involved, calculated on
the basis of an hourly rate which may not exceed that
which the court considers acceptable in the community in
which the attorney practices law, taking into account the
attorney’s qualifications and experience and the com-
plexity of the case, except that the attorney’s fees under
subsection (f) may not exceed—
(A) the actual cost incurred by the offeree for
an attorney’s fee payable to an attorney for services
in connection with the year 2000 claim; or
(B) if no such cost was incurred by the offeree
due to a contingency fee agreement, a reasonable
cost that would have been incurred by the offeree for
an attorney’s noncontingent fee payable to an attor-
ney for services in connection with the year 2000
claim.
(h) INAPPLICABILITY TO EQUITABLE REMEDIES.—
This section does not apply to any claim seeking an equi-
table remedy.
(i) INAPPLICABILITY TO CLASS ACTIONS.—This sec-
tion does not apply with respect to a year 2000 action
brought as a class action.
SEC. 508. ENFORCEMENT OF CONSUMER PROTECTION
RULES IN YEAR 2000 CLAIMS AND ACTIONS.
A client whose attorney fails to comply with this title
may file a civil action for damages in the court in which
the year 2000 claim or year 2000 action was filed or could
have been filed or other court of competent jurisdiction.
The remedy provided by this section is in addition to any
other available remedy or penalty.
Passed the House of Representatives May 12, 1999.
Attest:
Clerk.