I
106TH CONGRESS
1ST SESSION
H. R. 1319
To assure that innocent users and businesses gain access to solutions to
the year 2000 problem-related failures through fostering an incentive
to settle year 2000 lawsuits that may disrupt significant sectors of
the American economy.
IN THE HOUSE OF REPRESENTATIVES
MARCH 25, 1999
Ms. ESHOO introduced the following bill; which was referred to the Committee
on the Judiciary
A BILL
To assure that innocent users and businesses gain access
to solutions to the year 2000 problem-related failures
through fostering an incentive to settle year 2000 law-
suits that may disrupt significant sectors of the Amer-
ican economy.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Y2K Fairness in Litigation Act’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title and table of contents.
Sec. 2. Findings, purposes, and scope.
Sec. 3. Definitions.
TITLE I—PRELITIGATION PROCEDURES FOR YEAR 2000 CIVIL
ACTIONS
Sec. 101. Pre-trial notice.
Sec. 102. Alternative dispute resolution.
Sec. 103. Pleading requirements.
Sec. 104. Duty to mitigate damages.
TITLE II—YEAR 2000 CIVIL ACTIONS INVOLVING CONTRACTS
Sec. 201. Contract preservation.
Sec. 202. Evidence of reasonable efforts.
TITLE III—YEAR 2000 CIVIL ACTIONS INVOLVING TORT AND
OTHER NONCONTRACTUAL CLAIMS
Sec. 301. Proportionate liability.
Sec. 302. State of mind and foreseeability.
Sec. 303. Reasonable efforts defense.
Sec. 304. Economic losses.
TITLE IV—CLASS ACTIONS INVOLVING YEAR 2000 CLAIMS
Sec. 401. Minimum injury requirement.
TITLE V—EFFECTIVE DATE
Sec. 501. Effective date.
SEC. 2. FINDINGS, PURPOSES, AND SCOPE.
(a) FINDINGS.—Congress finds the following:
(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 there-
after or will fail to process those dates.
(B) If not corrected, the problem described in
subparagraph (A) and resulting failures could inca-
pacitate 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 prob-
lems, so as to minimize possible disruptions associ-
ated 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 de-
gree, 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 includ-
ing 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 sys-
tem, causing particular problems for the small
businesses and individuals who already find
that system inaccessible because of its com-
plexity 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 associ-
ated with the date change and work against the
successful resolution of those difficulties.
(v) Concern about the potential for liabil-
ity—in particular, concern about the substan-
tial 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 prob-
lems.
(A) IN GENERAL.—The term ‘‘material de-
fect’’ means a defect in any item, whether tan-
gible or intangible, or in the provision of a serv-
ice, that substantially prevents the item or serv-
ice from operating or functioning as designed or
intended.
(B) EXCLUSIONS.—The term does not in-
clude any defect that—
(i) has an insignificant or de minimis
effect on the operation or functioning of an
item;
(ii) affects only a component of an
item that, as a whole, substantially oper-
ates or functions as designed; or
(iii) has an insignificant or de minimis
effect on the efficacy of the service pro-
vided.
(6) PERSON.—The term ‘‘person’’ means any
natural person and any entity, organization, or en-
terprise, including any corporation, company (includ-
ing any joint stock company), association, partner-
ship, trust, or governmental entity.
(7) PLAINTIFF.—The term ‘‘plaintiff’’ means
any person who asserts a year 2000 claim.
(8) 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 U.S. Virgin Islands, Guam,
American Samoa, and any other territory or posses-
sion of the United States, and any political subdivi-
sion thereof.
(9) YEAR 2000 CIVIL ACTION.—The term ‘‘year
2000 civil action’’—
(A) means any civil action of any kind
brought in any court under Federal, State, or
foreign law, in which—
(i) a year 2000 claim is asserted; and
(ii) any claim or defense is related, di-
rectly or indirectly, to an actual or poten-
tial year 2000 failure; and
(B) does not include any action brought by
a Federal, State, or other public entity, agency,
or authority acting in a regulatory, supervisory,
or enforcement capacity.
(10) YEAR 2000 CLAIM.—The term ‘‘year 2000
claim’’ means any claim or cause of action of any
kind, whether asserted by way of claim, counter-
claim, cross-claim, third-party claim, or otherwise, in
which the plaintiff’s alleged loss or harm resulted,
directly or indirectly, from an actual or potential
year 2000 failure.
(11) YEAR
2000
FAILURE.—The term ‘‘year
2000 failure’’ means any 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,
however constructed, in processing, calculating, com-
paring, sequencing, displaying, storing, transmitting,
or receiving date-related data, including—
(A) the failure to accurately administer or
account for transitions or comparisons from,
into, and between the 20th and 21st centuries,
and between 1999 and 2000; or
(B) the failure to recognize or accurately
process any specific date, and the failure accu-
rately to account for the status of the year
2000 as a leap year.
TITLE I—PRELITIGATION PRO-
CEDURES 
FOR 
YEAR 
2000
CIVIL ACTIONS
SEC. 101. PRE-TRIAL NOTICE.
(a) NOTIFICATION PERIOD.—
(1) IN GENERAL.—Before filing a year 2000
claim, except an action for a claim that seeks only
injunctive relief, a prospective plaintiff shall be re-
quired to provide to each prospective defendant a
written notice that identifies and describes with
particularity—
(A) any manifestation of a material defect
alleged to have caused injury;
(B) the injury allegedly suffered or reason-
ably risked by the prospective plaintiff; and
(C) the relief or action sought by the pro-
spective plaintiff.
(2) COMMENCEMENT
OF
ACTION.—Except as
provided in subsections (c) and (e), a prospective
plaintiff shall not file a year 2000 claim in Federal
or State court until the expiration of the 90-day pe-
riod beginning on the date on which the prospective
plaintiff provides notice under paragraph (1).
(b) RESPONSE TO NOTICE.—Not later than 30 days
after receipt of the notice specified in subsection (a), each
prospective defendant shall provide each prospective plain-
tiff a written statement that—
(1) acknowledges receipt of the notice; and
(2) describes any actions that the defendant will
take, or has taken, to address the defect or injury
identified by the prospective plaintiff in the notice.
(c) FAILURE TO RESPOND.—If a prospective defend-
ant fails to respond to a notice provided under subsection
(a)(1) during the 30-day period prescribed in subsection
(b) or does not include in the response a description of
actions referred to in subsection (b)(2)—
(1) the 90-day waiting period identified in sub-
section (a) shall terminate at the expiration of the
30-day period specified in subsection (b) with re-
spect to that prospective defendant; and
(2) the prospective plaintiff may commence a
year 2000 civil action against such prospective de-
fendant immediately upon the termination of that
waiting period.
(d) FAILURE TO PROVIDE NOTICE.—
(1) IN GENERAL.—Subject to subsections (c)
and (e), a defendant may treat a complaint filed by
the plaintiff as a notice required under subsection
(a) by so informing the court and the plaintiff if the
defendant determines that a plaintiff has com-
menced a year 2000 civil action—
(A) without providing the notice specified
in subsection (a); or
(B) before the expiration of the waiting pe-
riod specified in subsection (a).
(2) STAY.—If a defendant elects under para-
graph (1) to treat a complaint as a notice—
(A) the court shall stay all discovery and
other proceedings in the action for the period
specified in subsection (a) beginning on the
date of filing of the complaint; and
(B) the time for filing answers and all
other pleadings shall be tolled during the appli-
cable period.
(e) EFFECT OF CONTRACTUAL WAITING PERIODS.—
In any case in which a contract requires notice of non-
performance and provides for a period of delay before the
initiation of suit for breach or repudiation of contract, the
contractual period of delay controls and shall apply in lieu
of the waiting period specified in subsections (a) and (d).
(f) SANCTION FOR FRIVOLOUS INVOCATION OF THE
STAY PROVISION.—If a defendant acts under subsection
(d) to stay an action, and the court subsequently finds
that the assertion by the defendant that the action is a
year 2000 civil action was frivolous and made for the pur-
pose of causing unnecessary delay, the court may impose
a sanction, including an order to make payments to oppos-
ing parties in accordance with Rule 11 of the Federal
Rules of Civil Procedure or applicable State rules of civil
procedure.
(g) COMPUTATION OF TIME.—For purposes of this
section, the rules regarding computation of time shall be
governed by the applicable Federal or State rules of civil
procedure.
SEC. 102. ALTERNATIVE DISPUTE RESOLUTION.
(a) REQUESTS MADE DURING NOTIFICATION PE-
RIOD.—At any time during the 90-day notification period
under section 101(a), either party may request the other
party to use alternative dispute resolution. If, based upon
that request, the parties enter into an agreement to use
alternative dispute resolution, the parties may also agree
to an extension of that 90-day period.
(b) REQUEST MADE AFTER NOTIFICATION PE-
RIOD.—At any time after expiration of the 90-day notifi-
cation period under section 101(a), whether before or after
the filing of a complaint, either party may request the
other party to use alternative dispute resolution.
(c) PAYMENT DATE.—If a dispute that is the subject
of the complaint or responsive pleading is resolved through
alternative dispute resolution as provided in subsection (a)
or (b), the defendant shall pay any amount of funds that
the defendant is required to pay the plaintiff under the
settlement not later than 30 days after the date on which
the parties settle the dispute, and all other terms shall
be implemented as promptly as possible based upon the
agreement of the parties, unless another period of time
is agreed to by the parties or established by contract be-
tween the parties.
SEC. 103. PLEADING REQUIREMENTS.
(a) NATURE AND AMOUNT OF DAMAGES.—In any
year 2000 civil action in which a plaintiff seeks an award
of money damages, the complaint shall state with particu-
larity with regard to each year 2000 claim—
(1) the nature and amount of each element of
damages; and
(2) the factual basis for the calculation of the
damages.
(b) MATERIAL DEFECTS.—In any year 2000 civil ac-
tion in which the plaintiff alleges that a product or service
was defective, the complaint shall, with respect to each
year 2000 claim—
(1) identify with particularity the manifesta-
tions of the material defects; and
(2) state with particularity the facts supporting
the conclusion that the defects were material.
(c) REQUIRED STATE OF MIND.—In any year 2000
civil action in which a year 2000 claim is asserted with
respect to which the plaintiff may prevail only on proof
that the defendant acted with a particular state of mind,
the complaint shall, with respect to each element of the
claim, state in detail the facts giving rise to a strong infer-
ence that the defendant acted with the required state of
mind.
(d) MOTION TO DISMISS; STAY OF DISCOVERY.—
(1) DISMISSAL FOR FAILURE TO MEET PLEAD-
ING REQUIREMENTS.—In any year 2000 civil action,
the court shall, on the motion of any defendant, dis-
miss without prejudice any year 2000 claim asserted
in the complaint if any of the requirements under
subsection (a), (b), or (c) is not met with respect to
the claim.
(2) STAY OF DISCOVERY.—In any year 2000
civil action, all discovery and other proceedings shall
be stayed during the pendency of any motion pursu-
ant to this subsection to dismiss, unless the court
finds upon the motion of any party that particular-
ized discovery is necessary to preserve evidence or
prevent undue prejudice to that party.
(3) PRESERVATION OF EVIDENCE.—
(A) IN GENERAL.—
(i) TREATMENT OF EVIDENCE.—Dur-
ing the pendency of any stay of discovery
entered under this paragraph, unless oth-
erwise ordered by the court, any party to
the action shall treat the items described
in clause (ii) as if they were a subject of
a continuing request for production of doc-
uments from an opposing party under ap-
plicable Federal or State rules of civil pro-
cedure.
(ii) ITEMS.—The items described in
this clause are all documents, data com-
pilations (including electronically stored or
recorded data), and tangible objects that—
(I) are in the custody or control
of the party described in clause (i);
and
(II) relevant to the allegations.
(B) 
SANCTION
FOR
WILLFUL
VIOLA-
TION.—A party aggrieved by the willful failure
of an opposing party to comply with clause (A)
may apply to the court for an order awarding
appropriate sanctions.
SEC. 104. DUTY TO MITIGATE DAMAGES.
Damages awarded for any year 2000 claim shall ex-
clude any amount that the plaintiff reasonably should have
avoided in light of any disclosure or information with re-
spect to which the plaintiff was, or reasonably should have
been, aware.
TITLE II—YEAR 2000 CIVIL AC-
TIONS 
INVOLVING 
CON-
TRACTS
SEC. 201. CONTRACT PRESERVATION.
(a) IN GENERAL.—Subject to subsections (b) and (c),
notwithstanding any other provision of Federal or State
statutory or case law, in any action in which a year 2000
claim is advanced, in resolving that claim all written con-
tractual terms, including limitations or exclusions of liabil-
ity or disclaimers of warranty, shall be fully enforceable.
(b) INTERPRETATION OF CONTRACT.—In any case in
which a contract is silent as to a particular issue, the in-
terpretation of the contract as to that issue shall be deter-
mined by applicable law in effect at the time that the con-
tract was entered into.
(c) UNENFORCEABLE CONTRACTS.—Subsection (a)
does not apply in any case in which a court determines
that the contract as a whole is unenforceable due to an
infirmity in the formation of the contract under applicable
law in effect at the time the contract was entered into.
SEC. 202. EVIDENCE OF REASONABLE EFFORTS.
(a) REASONABLE EFFORTS.—In any action in which
a year 2000 claim is advanced and in which a breach of
contract or related claim is alleged, in the resolution of
that claim, in addition to any other rights provided by ap-
plicable law, the party against whom the claim of breach
is asserted shall be allowed, for the purpose of limiting
the award of damages, to offer evidence that the imple-
mentation of the contract by that party, or the efforts
made by that party to implement the contract, were rea-
sonable in light of the circumstances.
(b) 
IMPOSSIBILITY
OR
COMMERCIAL
IMPRAC-
TICABILITY.—
(1) IN GENERAL.—In any action in which a
year 2000 claim is advanced and in which a breach
of contract or related claim is alleged, in resolving
that claim applicability of the doctrines of impos-
sibility and commercial impracticability shall be de-
termined by applicable law in existence on January
1, 1999.
(2) RULE OF CONSTRUCTION.—Nothing in this
Act shall be construed as limiting or impairing a
party’s right to assert defenses based upon the doc-
trines referred to in paragraph (1).
TITLE III—YEAR 2000 CIVIL AC-
TIONS INVOLVING TORT AND
OTHER 
NONCONTRACTUAL
CLAIMS
SEC. 301. PROPORTIONATE LIABILITY.
(a) IN GENERAL.—
(1) IN GENERAL.—Except as provided in para-
graph (2), a person against whom a final judgment
is entered on a year 2000 claim shall be liable solely
for the portion of the judgment that corresponds to
the percentage of responsibility of that person, as
determined under subsection (b).
(2) EXCEPTION.—Paragraph (1) does not
apply—
(A) if the plaintiff is an individual whose
net worth is less than $200,000 and the plain-
tiffs damages were more than 10 percent of his
or her net worth, the proportionally liable de-
fendants are jointly and severally liable for any
uncollectable amount; or
(B) if the defendant acted knowingly.
(b) DETERMINATION OF RESPONSIBILITY.—
(1) IN GENERAL.—As to any year 2000 claim,
the court shall instruct the jury to answer special in-
terrogatories, or if there is no jury, make findings,