[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 775 Enrolled Bill (ENR)]
H.R.775
One Hundred Sixth Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Wednesday,
the sixth day of January, one thousand nine hundred and ninety-nine
An Act
To establish certain procedures for civil actions brought for damages
relating to the failure of any device or system to process or otherwise
deal with the transition from the year 1999 to the year 2000, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

bc57ff665f717585ea0af51d06d989ddb349ba045247b071936d369062331488

(a) Short Title.--This Act may be cited as the ``Y2K Act''.
(b) Table of Sections.--The table of sections for this Act is as
follows:

3db69e5633e38520f4dce2051ef75901d6f1dfa5924a6ddc479d4b0aa55427b6

c2a7f1baac8baa8f69dd56235775114670fde7a75e5e387f5399791e56cbb8ad

5d29c0ad52fb24c4e4d9abf4af02ca19550c1b29322fde9f47df235f08e1cd6a

9fabc3405bd048f0fcc3986ec5e9656907b09e2f6db636097f66f33a780bd37f

(a) Findings.--The 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 thereafter
or will fail to process dates after December 31, 1999.
(B) If not corrected, the problem described in subparagraph
(A) and resulting failures could incapacitate 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 problems, so as to
minimize possible disruptions associated 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 degree, 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, including 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 system, causing
particular problems for the small businesses and individuals
who already find that system inaccessible because of its
complexity 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 associated with the date change and work against
the successful resolution of those difficulties.
(4) It is appropriate for the Congress to enact legislation to
assure that the year 2000 problems described in this section do not
unnecessarily disrupt interstate commerce or create unnecessary
caseloads in Federal courts and to provide initiatives to help
businesses prepare and be in a position to withstand the
potentially devastating economic impact of such problems.
(5) Resorting to the legal system for resolution of year 2000
problems described in this section is not feasible for many
businesses and individuals who already find the legal system
inaccessible, particularly small businesses and individuals who
already find the legal system inaccessible, because of its
complexity and expense.
(6) Concern about the potential for liability--in particular,
concern about the substantial 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
problems.
(7) A proliferation of frivolous lawsuits relating to year 2000
computer date-change problems by opportunistic parties may further
limit access to courts by straining the resources of the legal
system and depriving deserving parties of their legitimate rights
to relief.
(8) Congress encourages businesses to approach their disputes
relating to year 2000 computer date-change problems responsibly,
and to avoid unnecessary, time-consuming, and costly litigation
about Y2K failures, particularly those that are not material.
Congress supports good faith negotiations between parties when
there is such a dispute, and, if necessary, urges the parties to
enter into voluntary, nonbinding mediation rather than litigation.
(b) Purposes.--Based upon the power of the Congress under Article
I, Section 8, Clause 3 of the Constitution of the United States, the
purposes of this Act are--
(1) to establish uniform legal standards that give all
businesses and users of technology products reasonable incentives
to solve year 2000 computer date-change problems before they
develop;
(2) to encourage continued remediation and testing efforts to
solve such problems by providers, suppliers, customers, and other
contracting partners;
(3) to encourage private and public parties alike to resolve
disputes relating to year 2000 computer date-change problems by
alternative dispute mechanisms in order to avoid costly and time-
consuming litigation, to initiate those mechanisms as early as
possible, and to encourage the prompt identification and correction
of such problems; and
(4) to lessen the burdens on interstate commerce by
discouraging insubstantial lawsuits while preserving the ability of
individuals and businesses that have suffered real injury to obtain
complete relief.

8042932f15bcda749c3c1cd037d282dd6f0ed099efd7567186d0020239bd0ff2

In this Act:
(1) Y2K action.--The term ``Y2K action''--
(A) means a civil action commenced in any Federal or State
court, or an agency board of contract appeal proceeding, in
which the plaintiff's alleged harm or injury arises from or is
related to an actual or potential Y2K failure, or a claim or
defense arises from or is related to an actual or potential Y2K
failure;
(B) includes a civil action commenced in any Federal or
State court by a government entity when acting in a commercial
or contracting capacity; but
(C) does not include an action brought by a government
entity acting in a regulatory, supervisory, or enforcement
capacity.
(2) Y2K failure.--The term ``Y2K failure'' means 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 to process, to calculate, to compare, to sequence, to
display, to store, to transmit, or to receive year-2000 date-
related data, including failures--
(A) to deal with or account for transitions or comparisons
from, into, and between the years 1999 and 2000 accurately;
(B) to recognize or accurately to process any specific date
in 1999, 2000, or 2001; or
(C) accurately to account for the year 2000's status as a
leap year, including recognition and processing of the correct
date on February 29, 2000.
(3) Government entity.--The term ``government entity'' means an
agency, instrumentality, or other entity of Federal, State, or
local government (including multijurisdictional agencies,
instrumentalities, and entities).
(4) Material defect.--The term ``material defect'' means a
defect in any item, whether tangible or intangible, or in the
provision of a service, that substantially prevents the item or
service from operating or functioning as designed or according to
its specifications. The term ``material defect'' does not include a
defect that--
(A) has an insignificant or de minimis effect on the
operation or functioning of an item or computer program;
(B) affects only a component of an item or program that, as
a whole, substantially operates or functions as designed; or
(C) has an insignificant or de minimis effect on the
efficacy of the service provided.
(5) Personal injury.--The term ``personal injury'' means
physical injury to a natural person, including--
(A) death as a result of a physical injury; and
(B) mental suffering, emotional distress, or similar
injuries suffered by that person in connection with a physical
injury.
(6) 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 United States Virgin Islands,
Guam, American Samoa, and any other territory or possession of the
United States, and any political subdivision thereof.
(7) Contract.--The term ``contract'' means a contract, tariff,
license, or warranty.
(8) Alternative dispute resolution.--The term ``alternative
dispute resolution'' means any process or proceeding, other than
adjudication by a court or in an administrative proceeding, to
assist in the resolution of issues in controversy, through
processes such as early neutral evaluation, mediation, minitrial,
and arbitration.

ebc81fb554d615fc3c3c8fb10c83f96715270e9f5053619eef2ecf29c9cfb9aa

(a) General Rule.--This Act applies to any Y2K action brought after
January 1, 1999, for a Y2K failure occurring before January 1, 2003, or
for a potential Y2K failure that could occur or has allegedly caused
harm or injury before January 1, 2003, including any appeal, remand,
stay, or other judicial, administrative, or alternative dispute
resolution proceeding in such an action.
(b) No New Cause of Action Created.--Nothing in this Act creates a
new cause of action, and, except as otherwise explicitly provided in
this Act, nothing in this Act expands any liability otherwise imposed
or limits any defense otherwise available under Federal or State law.
(c) Claims for Personal Injury or Wrongful Death Excluded.--This
Act does not apply to a claim for personal injury or for wrongful
death.
(d) Warranty and Contract Preservation.--
(1) In general.--Subject to paragraph (2), in any Y2K action
any written contractual term, including a limitation or an
exclusion of liability, or a disclaimer of warranty, shall be
strictly enforced unless the enforcement of that term would
manifestly and directly contravene applicable State law embodied in
any statute in effect on January 1, 1999, specifically addressing
that term.
(2) Interpretation of contract.--In any Y2K action in which a
contract to which paragraph (1) applies is silent as to a
particular issue, the interpretation of the contract as to that
issue shall be determined by applicable law in effect at the time
the contract was executed.
(3) Unconscionability.--Nothing in paragraph (1) shall prevent
enforcement of State law doctrines of unconscionability, including
adhesion, recognized as of January 1, 1999, in controlling judicial
precedent by the courts of the State whose law applies to the Y2K
action.
(e) Preemption of State Law.--This Act supersedes State law to the
extent that it establishes a rule of law applicable to a Y2K action
that is inconsistent with State law, but nothing in this Act
implicates, alters, or diminishes the ability of a State to defend
itself against any claim on the basis of sovereign immunity.
(f) Application with Year 2000 Information and Readiness Disclosure
Act.--Nothing in this Act supersedes any provision of the Year 2000
Information and Readiness Disclosure Act.
(g) Application to Actions Brought by a Government Entity.--
(1) In general.--To the extent provided in this subsection,
this Act shall apply to an action brought by a government entity
described in section 3(1)(C).
(2) Definitions.--In this subsection:
(A) Defendant.--
(i) In general.--The term ``defendant'' includes a
State or local government.
(ii) State.--The term ``State'' means each of the
several States of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, the Virgin
Islands, Guam, American Samoa, and the Commonwealth of the
Northern Mariana Islands.
(iii) Local government.--The term ``local government''
means--
(I) any county, city, town, township, parish,
village, or other general purpose political subdivision
of a State; and
(II) any combination of political subdivisions
described in subclause (I) recognized by the Secretary
of Housing and Urban Development.
(B) Y2K upset.--The term ``Y2K upset''--
(i) means an exceptional temporary noncompliance with
applicable federally enforceable measurement, monitoring,
or reporting requirements directly related to a Y2K failure
that are beyond the reasonable control of the defendant
charged with compliance; and
(ii) does not include--
(I) noncompliance with applicable federally
enforceable measurement, monitoring, or reporting
requirements that constitutes or would create an
imminent threat to public health, safety, or the
environment;
(II) noncompliance with applicable federally
enforceable measurement, monitoring, or reporting
requirements that provide for the safety and soundness
of the banking or monetary system, or for the integrity
of the national securities markets, including the
protection of depositors and investors;
(III) noncompliance with applicable federally
enforceable measurement, monitoring, or reporting
requirements to the extent caused by operational error
or negligence;
(IV) lack of reasonable preventative maintenance;
(V) lack of preparedness for a Y2K failure; or
(VI) noncompliance with the underlying federally
enforceable requirements to which the applicable
federally enforceable measurement, monitoring, or
reporting requirement relates.
(3) Conditions necessary for a demonstration of a y2k upset.--A
defendant who wishes to establish the affirmative defense of Y2K
upset shall demonstrate, through properly signed, contemporaneous
operating logs, or other relevant evidence that--
(A) the defendant previously made a reasonable good faith
effort to anticipate, prevent, and effectively remediate a
potential Y2K failure;
(B) a Y2K upset occurred as a result of a Y2K failure or
other emergency directly related to a Y2K failure;
(C) noncompliance with the applicable federally enforceable
measurement, monitoring, or reporting requirement was
unavoidable in the face of an emergency directly related to a
Y2K failure and was necessary to prevent the disruption of
critical functions or services that could result in harm to
life or property;
(D) upon identification of noncompliance the defendant
invoking the defense began immediate actions to correct any
violation of federally enforceable measurement, monitoring, or
reporting requirements; and
(E) the defendant submitted notice to the appropriate
Federal regulatory authority of a Y2K upset within 72 hours
from the time that the defendant became aware of the upset.
(4) Grant of a y2k upset defense.--Subject to the other
provisions of this subsection, the Y2K upset defense shall be a
complete defense to the imposition of a penalty in any action
brought as a result of noncompliance with federally enforceable
measurement, monitoring, or reporting requirements for any
defendant who establishes by a preponderance of the evidence that
the conditions set forth in paragraph (3) are met.
(5) Length of y2k upset.--The maximum allowable length of the
Y2K upset shall be not more than 15 days beginning on the date of
the upset unless specific relief by the appropriate regulatory
authority is granted.
(6) Fraudulent invocation of y2k upset defense.--Fraudulent use
of the Y2K upset defense provided for in this subsection shall be
subject to the sanctions provided in section 1001 of title 18,
United States Code.
(7) Expiration of Defense.--The Y2K upset defense may not be
asserted for a Y2K upset occurring after June 30, 2000.
(8) Preservation of authority.--Nothing in this subsection
shall affect the authority of a government entity to seek
injunctive relief or require a defendant to correct a violation of
a federally enforceable measurement, monitoring, or reporting
requirement.
(h) Consumer Protection From Y2K Failures.--
(1) In general.--No person who transacts business on matters
directly or indirectly affecting residential mortgages shall cause
or permit a foreclosure on any such mortgage against a consumer as
a result of an actual Y2K failure that results in an inability to
accurately or timely process any mortgage payment transaction.
(2) Notice.--A consumer who is affected by an inability
described in paragraph (1) shall notify the servicer for the
mortgage, in writing and within 7 business days from the time that
the consumer becomes aware of the Y2K failure and the consumer's
inability to accurately or timely fulfill his or her obligation to
pay, of such failure and inability and shall provide to the
servicer any available documentation with respect to the failure.
(3) Actions may resume after grace period.--Notwithstanding
paragraph (1), an action prohibited under paragraph (1) may be
resumed, if the consumer's mortgage obligation has not been paid
and the servicer of the mortgage has not expressly and in writing
granted the consumer an extension of time during which to pay the
consumer's mortgage obligation, but only after the later of--
(A) four weeks after January 1, 2000; or
(B) four weeks after notification is made as required under
paragraph (2), except that any notification made on or after
March 15, 2000, shall not be effective for purposes of this
subsection.
(4) Applicability.--This subsection does not apply to
transactions upon which a default has occurred before December 15,
1999, or with respect to which an imminent default was foreseeable
before December 15, 1999.
(5) Enforcement of obligations merely tolled.--This subsection
delays but does not prevent the enforcement of financial
obligations, and does not otherwise affect or extinguish the
obligation to pay.
(6) Definition.--In this subsection--
(A) The term ``consumer'' means a natural person.
(B) The term ``residential mortgage'' has the meaning given
the term ``federally related mortgage loan'' under section 3 of
the Real Estate Settlement Procedures Act of 1974 (12 U.S.C.
2602).
(C) The term ``servicer'' means the person, including any
successor, responsible for receiving any scheduled periodic
payments from a consumer pursuant to the terms of a residential
mortgage, including amounts for any escrow account, and for
making the payments of principal and interest and such other
payments with respect to the amounts received from the borrower
as may be required pursuant to the terms of the mortgage. Such
term includes the person, including any successor, who makes or
holds a loan if such person also services the loan.
(i) Applicability to Securities Litigation.--In any Y2K action in
which the underlying claim arises under the securities laws (as defined
in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a)), the provisions of this Act, other than section 13(b) of this
Act, shall not apply.

741acf871c1e62442ded14e2324b3d863041b1f9da3481ad7a22585de8a2912a

(a) In General.--In any Y2K action in which punitive damages are
permitted by applicable law, the defendant shall not be liable for
punitive damages unless the plaintiff proves by clear and convincing
evidence that the applicable standard for awarding damages has been
met.
(b) Caps on Punitive Damages.--
(1) In general.--Subject to the evidentiary standard
established by subsection (a), punitive damages permitted under
applicable law against a defendant described in paragraph (2) in a
Y2K action may not exceed the lesser of--
(A) three times the amount awarded for compensatory
damages; or
(B) $250,000.
(2) Defendant described.--A defendant described in this
paragraph is a defendant--
(A) who--
(i) is sued in his or her capacity as an individual;
and
(ii) whose net worth does not exceed $500,000; or
(B) that is an unincorporated business, a partnership,
corporation, association, or organization, with fewer than 50
full-time employees.
(3) No cap if injury specifically intended.--Paragraph (1) does
not apply if the plaintiff establishes by clear and convincing
evidence that the defendant acted with specific intent to injure
the plaintiff.
(c) Government Entities.--Punitive damages in a Y2K action may not
be awarded against a government entity.

328d1e9346e6ddac910ddd518a43c9cfa8dbb11bab170e55b5801153e72940e3

(a) In General.--Except in a Y2K action that is a contract action,
and except as provided in subsections (b) through (g), a person against
whom a final judgment is entered in a Y2K action shall be liable solely
for the portion of the judgment that corresponds to the relative and
proportionate responsibility of that person. In determining the
percentage of responsibility of any defendant, the trier of fact shall
determine that percentage as a percentage of the total fault of all
persons, including the plaintiff, who caused or contributed to the
total loss incurred by the plaintiff.
(b) Proportionate Liability.--
(1) Determination of responsibility.--In any Y2K action that is
not a contract action, the court shall instruct the jury to answer
special interrogatories, or, if there is no jury, the court shall
make findings with respect to each defendant, including defendants
who have entered into settlements with the plaintiff or plaintiffs,
concerning--
(A) the percentage of responsibility, if any, of each
defendant, measured as a percentage of the total fault of all
persons who caused or contributed to the loss incurred by the
plaintiff; and
(B) if alleged by the plaintiff, whether the defendant
(other than a defendant who has entered into a settlement
agreement with the plaintiff)--
(i) acted with specific intent to injure the
plaintiff; or
(ii) knowingly committed fraud.
(2) Contents of special interrogatories or findings.--The
responses to interrogatories or findings under paragraph (1) shall
specify the total amount of damages that the plaintiff is entitled
to recover and the percentage of responsibility of each defendant
found to have caused or contributed to the loss incurred by the
plaintiff.
(3) Factors for consideration.--In determining the percentage
of responsibility under this subsection, the trier of fact shall
consider--
(A) the nature of the conduct of each person found to have
caused or contributed to the loss incurred by the plaintiff;
and
(B) the nature and extent of the causal relationship
between the conduct of each such person and the damages
incurred by the plaintiff.
(c) Joint Liability for Specific Intent or Fraud.--
(1) In general.--Notwithstanding subsection (a), the liability
of a defendant in a Y2K action that is not a contract action is
joint and several if the trier of fact specifically determines that
the defendant--
(A) acted with specific intent to injure the
plaintiff; or
(B) knowingly committed fraud.
(2) Fraud; recklessness.--
(A) Knowing commission of fraud described.--For purposes of
subsection (b)(1)(B)(ii) and paragraph (1)(B) of this
subsection, a defendant knowingly committed fraud if the
defendant--
(i) made an untrue statement of a material fact, with
actual knowledge that the statement was false;
(ii) omitted a fact necessary to make the statement not
be misleading, with actual knowledge that, as a result of
the omission, the statement was false; and
(iii) knew that the plaintiff was reasonably likely to
rely on the false statement.
(B) Recklessness.--For purposes of subsection (b)(1)(B) and
paragraph (1) of this subsection, reckless conduct by the
defendant does not constitute either a specific intent to
injure, or the knowing commission of fraud, by the defendant.
(3) Right to contribution not affected.--Nothing in this
section affects the right, under any other law, of a defendant to
contribution with respect to another defendant found under
subsection (b)(1)(B), or determined under paragraph (1)(B) of this
subsection, to have acted with specific intent to injure the
plaintiff or to have knowingly committed fraud.
(d) Special Rules.--
(1) Uncollectible share.--
(A) In general.--Notwithstanding subsection (a), if, upon
motion made not later than 6 months after a final judgment is
entered in any Y2K action that is not a contract action, the
court determines that all or part of the share of the judgment
against a defendant for compensatory damages is not collectible
against that defendant, then each other defendant in the action
is liable for the uncollectible share as follows:
(i) Percentage of net worth.--The other defendants are
jointly and severally liable for the uncollectible share if
the plaintiff establishes that--
(I) the plaintiff is an individual whose
recoverable damages under the final judgment are equal
to more than 10 percent of the net worth of the
plaintiff; and
(II) the net worth of the plaintiff is less than
$200,000.
(ii) Other plaintiffs.--For a plaintiff not described
in clause (i), each of the other defendants is liable for
the uncollectible share in proportion to the percentage of
responsibility of that defendant.
(iii) For a plaintiff not described in clause (i), in
addition to the share identified in clause (ii), the
defendant is liable for an additional portion of the
uncollectible share in an amount equal to 50 percent of the
amount determined under clause (ii) if the plaintiff
demonstrates by a preponderance of the evidence that the
defendant acted with reckless disregard for the likelihood
that its acts would cause injury of the sort suffered by
the plaintiff.
(B) Overall limit.--The total payments required under
subparagraph (A) from all defendants may not exceed the amount
of the uncollectible share.
(C) Subject to contribution.--A defendant against whom
judgment is not collectible is subject to contribution and to
any continuing liability to the plaintiff on the judgment.
(D) Suits by consumers.--
(i) Notwithstanding subparagraph (A), the other
defendants are jointly and severally liable for the
uncollectible share if--
(I) the plaintiff is a consumer whose suit alleges
or arises out of a defect in a consumer product; and
(II) the plaintiff is suing as an individual and
not as part of a class action.
(ii) In this subparagraph:
(I) The term ``class action'' means--
(aa) a single lawsuit in which: (1) damages are
sought on behalf of more than 10 persons or
prospective class members; or (2) one or more named
parties seek to recover damages on a representative
basis on behalf of themselves and other unnamed
parties similarly situated; or
(bb) any group of lawsuits filed in or pending
in the same court in which: (1) damages are sought
on behalf of more than 10 persons; and (2) the
lawsuits are joined, consolidated, or otherwise
proceed as a single action for any purpose.
(II) The term ``consumer'' means an individual who
acquires a consumer product for purposes other than
resale.
(III) The term ``consumer product'' means any
personal property or service which is normally used for
personal, family, or household purposes.
(2) Special right of contribution.--To the extent that a
defendant is required to make an additional payment under paragraph
(1), that defendant may recover contribution--
(A) from the defendant originally liable to make the
payment;
(B) from any other defendant that is jointly and severally
liable;
(C) from any other defendant held proportionately liable
who is liable to make the same payment and has paid less than
that other defendant's proportionate share of that payment; or
(D) from any other person responsible for the conduct
giving rise to the payment that would have been liable to make
the same payment.
(3) Nondisclosure to jury.--The standard for allocation of
damages under subsection (a) and subsection (b)(1), and the
procedure for reallocation of uncollectible shares under paragraph
(1) of this subsection, shall not be disclosed to members of the
jury.
(e) Settlement Discharge.--
(1) In general.--A defendant who settles a Y2K action that is
not a contract action at any time before final verdict or judgment
shall be discharged from all claims for contribution brought by
other persons. Upon entry of the settlement by the court, the court
shall enter an order constituting the final discharge of all
obligations to the plaintiff of the settling defendant arising out
of the action. The order shall bar all future claims for
contribution arising out of the action--
(A) by any person against the settling defendant; and
(B) by the settling defendant against any person other than
a person whose liability has been extinguished by the
settlement of the settling defendant.
(2) Reduction.--If a defendant enters into a settlement with
the plaintiff before the final verdict or judgment, the verdict or
judgment shall be reduced by the greater of--
(A) an amount that corresponds to the percentage of
responsibility of that defendant; or
(B) the amount paid to the plaintiff by that defendant.
(f) General Right of Contribution.--
(1) In general.--A defendant who is jointly and severally
liable for damages in any Y2K action that is not a contract action
may recover contribution from any other person who, if joined in
the original action, would have been liable for the same damages. A
claim for contribution shall be determined based on the percentage
of responsibility of the claimant and of each person against whom a
claim for contribution is made.
(2) Statute of limitations for contribution.--An action for
contribution in connection with a Y2K action that is not a contract
action shall be brought not later than 6 months after the entry of
a final, nonappealable judgment in the Y2K action, except that an
action for contribution brought by a defendant who was required to
make an additional payment under subsection (d)(1) may be brought
not later than 6 months after the date on which such payment was
made.
(g) More Protective State Law Not Preempted.--Nothing in this
section preempts or supersedes any provision of State law that--
(1) limits the liability of a defendant in a Y2K action to a
lesser amount than the amount determined under this section; or
(2) otherwise affords a greater degree of protection from joint
or several liability than is afforded by this section.

b47d9c1bb2c3ef7d997a30044a543d2d13d2d2f01b4ebc35b56f2230f6bcd316

(a) In General.--Before commencing a Y2K action, except an action
that seeks only injunctive relief, a prospective plaintiff in a Y2K
action shall send a written notice by certified mail (with either
return receipt requested or other means of verification that the notice
was sent) to each prospective defendant in that action. The notice
shall provide specific and detailed information about--
(1) the manifestations of any material defect alleged to have
caused harm or loss;
(2) the harm or loss allegedly suffered by the prospective
plaintiff;
(3) how the prospective plaintiff would like the prospective
defendant to remedy the problem;
(4) the basis upon which the prospective plaintiff seeks that
remedy; and
(5) the name, title, address, and telephone number of any
individual who has authority to negotiate a resolution of the
dispute on behalf of the prospective plaintiff.
(b) Person to Whom Notice To Be Sent.--The notice required by
subsection (a) shall be sent--
(1) to the registered agent of the prospective defendant for
service of legal process;
(2) if the prospective defendant does not have a registered
agent, then to the chief executive officer if the prospective
defendant is a corporation, to the managing partner if the
prospective defendant is a partnership, to the proprietor if the
prospective defendant is a sole proprietorship, or to a similarly-
situated person if the prospective defendant is any other
enterprise; or
(3) if the prospective defendant has designated a person to
receive prelitigation notices on a Year 2000 Internet Website (as
defined in section 3(7) of the Year 2000 Information and Readiness
Disclosure Act), to the designated person, if the prospective
plaintiff has reasonable access to the Internet.
(c) Response to Notice.--
(1) In general.--Within 30 days after receipt of the notice
specified in subsection (a), each prospective defendant shall send
by certified mail with return receipt requested to each prospective
plaintiff a written statement acknowledging receipt of the notice,
and describing the actions it has taken or will take to address the
problem identified by the prospective plaintiff.
(2) Willingness to engage in adr.--The written statement shall
state whether the prospective defendant is willing to engage in
alternative dispute resolution.
(3) Inadmissibility.--A written statement required by this
subsection is not admissible in evidence, under Rule 408 of the
Federal Rules of Evidence or any analogous rule of evidence in any
State, in any proceeding to prove liability for, or the invalidity
of, a claim or its amount, or otherwise as evidence of conduct or
statements made in compromise negotiations.
(4) Presumptive time of receipt.--For purposes of paragraph
(1), a notice under subsection (a) is presumed to be received 7
days after it was sent.
(5) Priority.--A prospective defendant receiving more than one
notice under this section may give priority to notices with respect
to a product or service that involves a health or safety related
Y2K failure.
(d) Failure to Respond.--If a prospective defendant--
(1) fails to respond to a notice provided pursuant to
subsection (a) within the 30 days specified in subsection (c)(1);
or
(2) does not describe the action, if any, the prospective
defendant has taken, or will take, to address the problem
identified by the prospective plaintiff,
the prospective plaintiff may immediately commence a legal action
against that prospective defendant.
(e) Remediation Period.--
(1) In general.--If the prospective defendant responds and
proposes remedial action it will take, or offers to engage in
alternative dispute resolution, then the prospective plaintiff
shall allow the prospective defendant an additional 60 days from
the end of the 30-day notice period to complete the proposed
remedial action or alternative dispute resolution before commencing
a legal action against that prospective defendant.
(2) Extension by agreement.--The prospective plaintiff and
prospective defendant may change the length of the 60-day
remediation period by written agreement.
(3) Multiple extensions not allowed.--Except as provided in
paragraph (2), a defendant in a Y2K action is entitled to no more
than one 30-day period and one 60-day remediation period under
paragraph (1).
(4) Statutes of limitation, etc., tolled.--Any applicable
statute of limitations or doctrine of laches in a Y2K action to
which paragraph (1) applies shall be tolled during the notice and
remediation period under that paragraph.
(f) Failure to Provide Notice.--If a defendant determines that a
plaintiff has filed a Y2K action without providing the notice specified
in subsection (a) or without awaiting the expiration of the appropriate
waiting period specified in subsection (c), the defendant may treat the
plaintiff's complaint as such a notice by so informing the court and
the plaintiff in its initial response to the plaintiff. If any
defendant elects to treat the complaint as such a notice--
(1) the court shall stay all discovery and all other
proceedings in the action for the appropriate period after filing
of the complaint; and
(2) the time for filing answers and all other pleadings shall
be tolled during the appropriate period.
(g) Effect of Contractual or Statutory Waiting Periods.--In cases
in which a contract, or a statute enacted before January 1, 1999,
requires notice of nonperformance and provides for a period of delay
prior to the initiation of suit for breach or repudiation of contract,
the period of delay provided by contract or the statute is controlling
over the waiting period specified in subsections (c) and (d).
(h) State Law Controls Alternative Methods.--Nothing in this
section supersedes or otherwise preempts any State law or rule of civil
procedure with respect to the use of alternative dispute resolution for
Y2K actions.
(i) Provisional Remedies Unaffected.--Nothing in this section
interferes with the right of a litigant to provisional remedies
otherwise available under Rule 65 of the Federal Rules of Civil
Procedure or any State rule of civil procedure providing extraordinary
or provisional remedies in any civil action in which the underlying
complaint seeks both injunctive and monetary relief.
(j) Special Rule for Class Actions.--For the purpose of applying
this section to a Y2K action that is maintained as a class action in
Federal or State court, the requirements of the preceding subsections
of this section apply only to named plaintiffs in the class action.

3b12d5dfc3e9b6ddad3f1dd30081364fc95bc0cd23d1e6ee618a7d11956f3220

(a) Application with Rules of Civil Procedure.--This section
applies exclusively to Y2K actions and, except to the extent that this
section requires additional information to be contained in or attached
to pleadings, nothing in this section is intended to amend or otherwise
supersede applicable rules of Federal or State civil procedure.
(b) Nature and Amount of Damages.--In all Y2K actions in which
damages are requested, there shall be filed with the complaint a
statement of specific information as to the nature and amount of each
element of damages and the factual basis for the damages calculation.
(c) Material Defects.--In any Y2K action in which the plaintiff
alleges that there is a material defect in a product or service, there
shall be filed with the complaint a statement of specific information
regarding the manifestations of the material defects and the facts
supporting a conclusion that the defects are material.
(d) Required State of Mind.--In any Y2K action in which a claim is
asserted on which the plaintiff may prevail only on proof that the
defendant acted with a particular state of mind, there shall be filed
with the complaint, with respect to each element of that claim, a
statement of the facts giving rise to a strong inference that the
defendant acted with the required state of mind.

e8f06926228098815e4e879e4b26165391b84540f2bbeb4c6ee7414170c34050

(a) In General.--Damages awarded in any Y2K action shall exclude
compensation for damages the plaintiff could reasonably have avoided in
light of any disclosure or other information of which the plaintiff
was, or reasonably should have been, aware, including information made
available by the defendant to purchasers or users of the defendant's
product or services concerning means of remedying or avoiding the Y2K
failure involved in the action.
(b) Preservation of Existing Law.--The duty imposed by this section
is in addition to any duty to mitigate imposed by State law.
(c) Exception for Intentional Fraud.--Subsection (a) does not apply
to damages suffered by reason of the plaintiff's justifiable reliance
upon an affirmative material misrepresentation by the defendant, made
by the defendant with actual knowledge of its falsity, concerning the
potential for Y2K failure of the device or system used or sold by the
defendant that experienced the Y2K failure alleged to have caused the
plaintiff's harm.

4150061ffd5dcb367903b881eac5cd2b9da50027572d5837e63c64b13d90ac4e

IMPRACTICABILITY DOCTRINES.
In any Y2K action for breach or repudiation of contract, the
applicability of the doctrines of impossibility and commercial
impracticability shall be determined by the law in existence on January
1, 1999. Nothing in this Act shall be construed as limiting or
impairing a party's right to assert defenses based upon such doctrines.

ce5aff1c72b9c74daee33cea7963dbc48a16cf81dfc3dd3951117f7885f6d0a2

In any Y2K action for breach or repudiation of contract, no party
may claim, or be awarded, any category of damages unless such damages
are allowed--
(1) by the express terms of the contract; or
(2) if the contract is silent on such damages, by operation of
State law at the time the contract was effective or by operation of
Federal law.

091012d6be0c8de2d022af18966db3bcd0c43ee2ea93300a9554251df2507efa

(a) In General.--A party to a Y2K action making a tort claim, other
than a claim of intentional tort arising independent of a contract, may
not recover damages for economic loss unless--
(1) the recovery of such losses is provided for in a contract
to which the party seeking to recover such losses is a party; or
(2) such losses result directly from damage to tangible
personal or real property caused by the Y2K failure involved in the
action (other than damage to property that is the subject of the
contract between the parties to the Y2K action or, in the event
there is no contract between the parties, other than damage caused
only to the property that experienced the Y2K failure),
and such damages are permitted under applicable Federal or State law.
(b) Economic Loss.--For purposes of this section only, and except
as otherwise specifically provided in a valid and enforceable written
contract between the plaintiff and the defendant in a Y2K action, the
term ``economic loss'' means amounts awarded to compensate an injured
party for any loss, and includes amounts awarded for damages such as--
(1) lost profits or sales;
(2) business interruption;
(3) losses indirectly suffered as a result of the defendant's
wrongful act or omission;
(4) losses that arise because of the claims of third parties;
(5) losses that must be pled as special damages; and
(6) consequential damages (as defined in the Uniform Commercial
Code or analogous State commercial law).
(c) Certain Other Actions.--A person liable for damages, whether by
settlement or judgment, in a civil action to which this Act does not
apply because of section 4(c) whose liability, in whole or in part, is
the result of a Y2K failure may, notwithstanding any other provision of
this Act, pursue any remedy otherwise available under Federal or State
law against the person responsible for that Y2K failure to the extent
of recovering the amount of those damages.

610b24e3e0e80448f72f38117980dee84ac16a8b6fcb6599ec2c3710a9c1ca73

(a) Defendant's State of Mind.--In a Y2K action other than a claim
for breach or repudiation of contract, and in which the defendant's
actual or constructive awareness of an actual or potential Y2K failure
is an element of the claim, the defendant is not liable unless the
plaintiff establishes that element of the claim by the standard of
evidence under applicable State law in effect on the day before January
1, 1999.
(b) Limitation on Bystander Liability for Y2K Failures.--
(1) In general.--With respect to any Y2K action for money
damages in which--
(A) the defendant is not the manufacturer, seller, or
distributor of a product, or the provider of a service, that
suffers or causes the Y2K failure at issue;
(B) the plaintiff is not in substantial privity with the
defendant; and
(C) the defendant's actual or constructive awareness of an
actual or potential Y2K 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 the standard of evidence under applicable State law in effect on
the day before January 1, 1999, that the defendant actually knew,
or recklessly disregarded a known and substantial risk, that such
failure would occur.
(2) Substantial privity.--For purposes of paragraph (1)(B), a
plaintiff and a defendant are in substantial privity when, in a Y2K
action arising out of the performance of professional services, the
plaintiff and the defendant either have contractual relations with
one another or the plaintiff is a person who, prior to the
defendant's performance of such services, was specifically
identified to and acknowledged by the defendant as a person for
whose special benefit the services were being performed.
(3) Certain claims excluded.--For purposes of paragraph (1)(C),
claims in which the defendant's actual or constructive awareness of
an actual or potential Y2K 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 fiduciary duty,
negligent misrepresentation, and interference with contract or
economic advantage.
(c) Control Not Determinative of Liability.--The fact that a Y2K
failure occurred in an entity, facility, system, product, or component
that was sold, leased, rented, or otherwise within the control of the
party against whom a claim is asserted in a Y2K action shall not
constitute the sole basis for recovery of damages in that action. A
claim in a Y2K action for breach or repudiation of contract for such a
failure is governed by the terms of the contract.
(d) Protections of the Year 2000 Information and Readiness
Disclosure Act Apply.--The protections for the exchanges of information
provided by section 4 of the Year 2000 Information and Readiness
Disclosure Act (Public Law 105-271) shall apply to any Y2K action.

9ce0a258bf7ada595d24a3c65b4c1b3ba3e0f64f5f22349f602628d03dcd75cb

ACTIONS.
Any district court of the United States in which a Y2K action is
pending may appoint a special master or a magistrate judge to hear the
matter and to make findings of fact and conclusions of law in
accordance with Rule 53 of the Federal Rules of Civil Procedure.

e0ace05e9386ed8175ea2f16192e42dc655594ba70e3a4ea71db4a6318abec16

(a) Material Defect Requirement.--A Y2K action involving a claim
that a product or service is defective may be maintained as a class
action in Federal or State court as to that claim only if--
(1) it satisfies all other prerequisites established by
applicable Federal or State law, including applicable rules of
civil procedure; and
(2) the court finds that the defect in a product or service as
alleged would be a material defect for the majority of the members
of the class.
(b) Notification.--In any Y2K 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, which shall include--
(1) a concise and clear description of the nature of the
action;
(2) the jurisdiction where the case is pending; and
(3) 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.
(c) Forum for Y2K Class Actions.--
(1) Jurisdiction.--Except as provided in paragraph (2), the
district courts of the United States shall have original
jurisdiction of any Y2K action that is brought as a class action.
(2) Exceptions.--The district courts of the United States shall
not have original jurisdiction over a Y2K action brought as a class
action if--
(A)(i) a substantial majority of the members of the
proposed plaintiff class are citizens of a single State;
(ii) the primary defendants are citizens of that State; and
(iii) the claims asserted will be governed primarily by the
laws of that State;
(B) the primary defendants are States, State officials, or
other governmental entities against whom the district courts of
the United States may be foreclosed from ordering relief;
(C) the plaintiff class does not seek an award of punitive
damages, and the amount in controversy is less than the sum of
$10,000,000 (exclusive of interest and costs), computed on the
basis of all claims to be determined in the action; or
(D) there are less than 100 members of the proposed
plaintiff class.
A party urging that any exception described in subparagraph (A),
(B), (C), or (D) applies to an action shall bear the full burden of
demonstrating the applicability of the exception.
(3) Procedure if Requirements Not Met.--
(A) Dismissal or remand.--A United States district court
shall dismiss, or, if after removal, strike the class
allegations and remand, any Y2K action brought or removed under
this subsection as a class action if--
(i) the action is subject to the jurisdiction of the
court solely under this subsection; and
(ii) the court determines the action may not proceed as
a class action based on a failure to satisfy the conditions
of Rule 23 of the Federal Rules of Civil Procedure.
(B) Amendment; removal.--Nothing in paragraph (A) shall
prohibit plaintiffs from filing an amended class action in
Federal or State court. A defendant shall have the right to
remove such an amended class action to a United States district
court under this subsection.
(C) Period of limitations tolled.--Upon dismissal or
remand, the period of limitations for any claim that was
asserted in an action on behalf of any named or unnamed member
of any proposed class shall be deemed tolled to the full extent
provided under Federal law.
(D) Dismissal without prejudice.--The dismissal of a Y2K
action under subparagraph (A) shall be without prejudice.
(d) Effect on Rules of Civil Procedure.--Except as otherwise
provided in this section, nothing in this section supersedes any rule
of Federal or State civil procedure applicable to class actions.

3227a3842abc02bbfb87caba35d4e774d05066442ed152e7ea2c99c20541da52

Nothing in this Act shall be construed to affect the applicability
of any State law that provides stricter limits on damages and
liabilities, affording greater protection to defendants in Y2K actions,
than are provided in this Act.

5d4c8bf124413803dd0e2b78d63cd76986f809d217243349aeea6a621af129f0

Any party to a Y2K action in a State court in a State that has not
adopted a rule of evidence substantially similar to Rule 704 of the
Federal Rules of Evidence may introduce in such action evidence that
would be admissible if Rule 704 applied in that jurisdiction.

87ab894dcf3561e383fa4324bc6d57cfaec7463478a436c2231d1ddcac0e7468

SMALL BUSINESS CONCERNS.
(a) Definitions.--In this section--
(1) the term ``agency'' means any executive agency, as defined
in section 105 of title 5, United States Code, that has the
authority to impose civil penalties on small business concerns;
(2) the term ``first-time violation'' means a violation by a
small business concern of a federally enforceable rule or
regulation (other than a Federal rule or regulation that relates to
the safety and soundness of the banking or monetary system or for
the integrity of the National Securities markets, including
protection of depositors and investors) caused by a Y2K failure if
that Federal rule or regulation had not been violated by that small
business concern within the preceding 3 years; and
(3) the term ``small business concern'' has the same meaning as
a defendant described in section 5(b)(2)(B).
(b) Establishment of Liaisons.--Not later than 30 days after the
date of the enactment of this Act, each agency shall--
(1) establish a point of contact within the agency to act as a
liaison between the agency and small business concerns with respect
to problems arising out of Y2K failures and compliance with Federal
rules or regulations; and
(2) publish the name and phone number of the point of contact
for the agency in the Federal Register.
(c) General Rule.--Subject to subsections (d) and (e), no agency
shall impose any civil money penalty on a small business concern for a
first-time violation.
(d) Standards for Waiver.--An agency shall provide a waiver of
civil money penalties for a first-time violation, provided that a small
business concern demonstrates, and the agency determines, that--
(1) the small business concern previously made a reasonable
good faith effort to anticipate, prevent, and effectively remediate
a potential Y2K failure;
(2) a first-time violation occurred as a result of the Y2K
failure of the small business concern or other entity, which
significantly affected the small business concern's ability to
comply with a Federal rule or regulation;
(3) the first-time violation was unavoidable in the face of a
Y2K failure or occurred as a result of efforts to prevent the
disruption of critical functions or services that could result in
harm to life or property;
(4) upon identification of a first-time violation, the small
business concern initiated reasonable and prompt measures to
correct the violation; and
(5) the small business concern submitted notice to the
appropriate agency of the first-time violation within a reasonable
time not to exceed 5 business days from the time that the small
business concern became aware that the first-time violation had
occurred.
(e) Exceptions.--An agency may impose civil money penalties
authorized under Federal law on a small business concern for a first-
time violation if--
(1) the small business concern's failure to comply with Federal
rules or regulations resulted in actual harm, or constitutes or
creates an imminent threat to public health, safety, or the
environment; or
(2) the small business concern fails to correct the violation
not later than 1 month after initial notification to the agency.
(f) Expiration.--This section shall not apply to first-time
violations caused by a Y2K failure occurring after December 31, 2000.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.

1a3b0b1bae7beb3c253487b537cb609600f1be3b20cfe6c204b984559180fddb

Y2K Act

Other Sections

Want the full experience?