Summary: S.96 — 106th Congress (1999-2000)All Information (Except Text)

Bill summaries are authored by CRS.

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Reported to Senate with amendment(s) (03/10/1999)


Title I: Opportunity to Resolve Y2K Problems

Title II: Y2K Actions Involving Contract-Related Claims

Title III: Y2K Actions Involving Tort Claims

Title IV: Y2K Class Actions

Y2K Act - Makes this Act: (1) applicable to any Y2K action brought in a Federal or State court after February 22, 1999: and (2) inapplicable to a claim for personal injury or wrongful death. Preempts inconsistent State law.

Mandates that, in any Y2K action in which punitive damages may be awarded under applicable State law, the defendant shall not be liable unless the plaintiff proves that the defendant acted with conscious and flagrant disregard for the rights and property of others.

Limits punitive damages awarded in such an action to: (1) the larger of three times the amount awarded for actual damages or $250,000; or (2) the smaller of such amounts in the case of an individual whose net worth does not exceed $500,000 or an entity employing less than 25 full-time employees. Prohibits punitive damages from being awarded against government entities.

Title I: Opportunity to Resolve Y2K Problems - Requires a prospective plaintiff, before commencing a Y2K action (except in an action seeking only injunctive relief), to serve on each prospective defendant a written notice that identifies with particularity the manifestations of any material defect causing harm or loss, the harm or loss suffered, the remedy sought, and certain information identifying any individual authorized to negotiate on behalf of the plaintiff. Requires: (1) a 90-day wait after such notice; and (2) a response to such notice within 30 days proposing remedial actions. Outlines pleading requirements, including specification of the nature, amount, and factual basis for calculating damages. Requires damages awarded to exclude compensation for damages the plaintiff would reasonably have avoided in light of disclosures. Provides proportionate defendant liability, with several but not joint liability.

Title II: Y2K Actions Involving Contract-Related Claims - Requires, in any Y2K breach of contract action, that contract terms and conditions, including liability exclusions and warranty disclaimers, are fully enforceable, unless the court determines that the contract as a whole is unenforceable. Prohibits the award of consequential or punitive damages in such an action unless such damages are allowed by the express terms of the contract or by operation of State or Federal law.

Title III: Y2K Actions Involving Tort Claims - Prohibits a party to a Y2K action making a tort claim from recovering damages for economic loss unless such damages are permitted under applicable Federal or State law and: (1) such recovery is provided for under a contract entered into by the party; (2) such losses result directly from a personal injury claim resulting from the Y2K failure; or (3) such losses result directly from damage to tangible property caused by the Y2K failure. Allows the defenses of good faith and reasonable efforts to prevent the failure. Requires the plaintiff to prove: (1) a defendant's state of mind regarding risk or eventual harm to the plaintiff in a Y2K action in which the defendant's actual or constructive awareness of an actual or potential failure is an element of the claim; and (2) that the defendant knew, or should have known, that his or her action or failure to act would cause harm..

Provides limited liability of business officers and directors, with exceptions for intentionally making misleading statements or withholding information.

Title IV: Y2K Class Actions - Provides that, in any Y2K action involving a claim that a product or service is defective, a class action may be maintained only if: (1) it satisfies all other Federal or State class action procedural laws or rules; and (2) the court finds that the alleged defect is material to the majority of such class. Requires specified notice to class members. Specifies circumstances under which: (1) U.S. district courts shall have original jurisdiction for such suits; (2) a U.S. district court may abstain from hearing such an action; and (3) such an action may be removed to a U.S. district court.