Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

U.S. Senate Pushes Curb on Y2K Suits

WASHINGTON -- The U.S. Senate has approved legislation aimed at curbing the wave of lawsuits expected to arise from Year 2000 computer glitches, creating a potential standoff between a supportive high-tech industry and a reluctant White House.

In threatening a veto, U.S. President Bill Clinton has complained that both the Senate bill and a tougher version passed last month by the House go so far in blocking frivolous lawsuits that they would also deter legitimate consumer claims.

Still, the White House is eager to reach a compromise that addresses the concerns of the high-tech industry f an increasingly powerful political player f without alienating the trial lawyers and consumer groups fighting for the bill's demise.

Whatever the ultimate outcome, the bill's Senate passage Tuesday marked a coming of age for a relative upstart in the world of Washington influence. To win the bill's passage, high-tech officials outflanked trial lawyers through a well-organized campaign of big-money contributions and well-oiled lobbying.

Blocked for weeks by Democratic critics, the measure to restrict class-action lawsuits and cap punitive damages in Y2K cases passed on a 62-37 vote.

Supporting the bill were 50 Republicans and 12 Democrats. Voting against it were 33 Democrats and four Republicans.

Both sides in Tuesday's debate accused the other of accommodating special interests. The bill's opponents were attacked as puppets for the trial lawyers group, a tried-and-true contributor to Democratic candidates and causes. The measure's GOP advocates were charged with being motivated mainly by a desire to curry favor with the burgeoning high-tech industry.

Dozens of Y2K-related lawsuits already have been filed around the country and Senator John McCain, an Arizona Republican, the bill's chief sponsor, warned that courthouses could be overrun with litigation f amounting to as much as $1 trillion f once the calendar hits Jan. 1, 2000.

"This legislation will prevent our courtrooms from being clogged with litigation that offers no one prosperity except for the lawyers,'' McCain said.

It remains uncertain how catastrophic f or overblown f the millennium bug will prove to be. The problem itself began decades ago when the first computers were programmed to recognize years by their final two digits. That worked fine until the year 2000 neared and computers began recognizing the landmark year as 1900.

Without a programming fix, experts have predicted that key computers will shut down, spew out incorrect data and wreak havoc on an increasingly computer-dependent society.

To stem a race to the courthouse, the Senate legislation would force potential plaintiffs to give 30 days notice before filing suits. It would then give defendants a grace period of 60 days to fix problems.

Other provisions would cap punitive damages for businesses with fewer than 50 employees and restrict class-action lawsuits in state courts.

The legislation, which would lapse after three years, would not apply to personal injury or wrongful death cases. Still, opponents argued that legitimate lawsuits might be stymied.

Senator John Kerry, a Massachusetts Democrat, cited the plight of an imaginary homeowner whose property is destroyed after a computer glitch at a nearby power plant or, less apocalyptically, someone whose home alarm system fails, resulting in an undetected burglary. McCain's bill, Kerry argued, would unfairly tie the hands of such people.

Kerry proposed a modified approach that was favored by the White House and would have reduced companies' legal protection. But the Senate last week rejected his proposals, 57 to 41, prompting Minority Leader Tom Daschle, a South Dakota Democrat, to urge defeat of the legislation.

Senate Democrats, however, were divided on the bill's merits.

In recent weeks, Senator Ernest F. Hollings, a South Carolina Democrat, and other Democratic critics have blocked the Y2K legislation from coming up for debate. Hollings called the legislation "a get-out-of-jail-free card'' for the high-tech industry.

The bill now goes to a House-Senate conference committee, where lawmakers will attempt to iron out differences between the two versions of the legislation. Administration officials likely will play a role in the negotiations, attempting to influence the final product so it is more to their liking.

The pressure Clinton faces from from both sides in the debate was evident shortly after the Senate vote.

U.S. Chamber of Commerce President Thomas Donohue said that the administration would face a clear choice: "Support the American economy, millions of small businesses and high-tech entrepreneurs or support a group of trial lawyers looking to get rich off Y2K problems.''