[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 461 Reported in Senate (RS)]

                                                        Calendar No. 82

106th CONGRESS

  1st Session

                                 S. 461

_______________________________________________________________________

                                 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 lawsuits that may disrupt significant 
                    sectors of the American economy.

_______________________________________________________________________

                             March 26, 1999

                       Reported with an amendment





                                                        Calendar No. 82
106th CONGRESS
  1st Session
                                 S. 461

 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 SENATE OF THE UNITED STATES

                           February 24, 1999

 Mr. Hatch (for himself, Mrs. Feinstein, and Mr. McConnell) introduced 
the following bill; which was read twice and referred to the Committee 
                            on the Judiciary

                             March 26, 1999

Reported under authority of the order of the Senate of March 25, 1999, 
                    by Mr. Hatch, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 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 lawsuits that may disrupt significant 
                    sectors of the American economy.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

<DELETED>SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.</DELETED>

<DELETED>    (a) Short Title.--This Act may be cited as the ``Year 2000 
Fairness and Responsibility Act''.</DELETED>
<DELETED>    (b) Table of Contents.--The table of contents for this Act 
is as follows:</DELETED>

<DELETED>Sec. 1. Short title and table of contents.
<DELETED>Sec. 2. Findings, purposes, and scope.
<DELETED>Sec. 3. Definitions.
 <DELETED>TITLE I--PRELITIGATION PROCEDURES FOR YEAR 2000 CIVIL ACTIONS

<DELETED>Sec. 101. Pre-trial notice.
<DELETED>Sec. 102. Alternative dispute resolution.
<DELETED>Sec. 103. Pleading requirements.
<DELETED>Sec. 104. Duty to mitigate.
     <DELETED>TITLE II--YEAR 2000 CIVIL ACTIONS INVOLVING CONTRACTS

<DELETED>Sec. 201. Contract preservation.
<DELETED>Sec. 202. Evidence of reasonable efforts and defenses.
<DELETED>Sec. 203. Damages limitation.
 <DELETED>TITLE III--YEAR 2000 CIVIL ACTIONS INVOLVING TORT AND OTHER 
                         NONCONTRACTUAL CLAIMS

<DELETED>Sec. 301. Proportionate liability.
<DELETED>Sec. 302. State of mind and foreseeability.
<DELETED>Sec. 303. Reasonable efforts defense.
<DELETED>Sec. 304. Damages limitation.
<DELETED>Sec. 305. Economic losses.
<DELETED>Sec. 306. Liability of officers and directors.
      <DELETED>TITLE IV--CLASS ACTIONS INVOLVING YEAR 2000 CLAIMS

<DELETED>Sec. 401. Minimum injury requirement.
<DELETED>Sec. 402. Notification.
<DELETED>Sec. 403. Dismissal prior to certification.
<DELETED>Sec. 404. Federal jurisdiction in class actions involving year 
                            2000 claims.
                    <DELETED>TITLE V--EFFECTIVE DATE

<DELETED>Sec. 501. Effective date.

<DELETED>SEC. 2. FINDINGS, PURPOSES, AND SCOPE.</DELETED>

<DELETED>    (a) Findings.--Congress finds the following:</DELETED>
        <DELETED>    (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 those 
        dates.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (B) The litigation described in subparagraph (A) 
        would have a range of undesirable effects including the 
        following:</DELETED>
                <DELETED>    (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.</DELETED>
                <DELETED>    (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.</DELETED>
                <DELETED>    (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.</DELETED>
                <DELETED>    (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.</DELETED>
                <DELETED>    (v) 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.</DELETED>
<DELETED>    (b) Purposes.--Based upon the power contained in article 
I, section 8, clause 3 of the Constitution of the United States, the 
purposes of this Act are--</DELETED>
        <DELETED>    (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;</DELETED>
        <DELETED>    (2) to encourage the resolution of year 2000 
        computer date-change disputes involving economic damages 
        without recourse to unnecessary, time consuming, and wasteful 
        litigation; and</DELETED>
        <DELETED>    (3) to lessen burdens on interstate commerce by 
        discouraging insubstantial lawsuits, while also preserving the 
        ability of individuals and businesses that have suffered real 
        injury to obtain complete relief.</DELETED>
<DELETED>    (c) Scope.--Nothing in this Act affects claims for 
personal injury.</DELETED>

<DELETED>SEC. 3. DEFINITIONS.</DELETED>

<DELETED>    In this Act:</DELETED>
        <DELETED>    (1) Actual damages.--The term ``actual damages''--
        </DELETED>
                <DELETED>    (A) means damages for physical injury to 
                any person or property; and</DELETED>
                <DELETED>    (B) includes the cost of repairing or 
                replacing a product that has a material 
                defect.</DELETED>
        <DELETED>    (2) Contract.--The term ``contract'' means a 
        contract, tariff, license, or warranty.</DELETED>
        <DELETED>    (3) Defendant.--The term ``defendant'' means any 
        person against whom a year 2000 claim is asserted.</DELETED>
        <DELETED>    (4) Economic loss.--The term ``economic loss''--
        </DELETED>
                <DELETED>    (A) means any damages other than damages 
                arising out of personal injury or damage to tangible 
                property; and</DELETED>
                <DELETED>    (B) includes damages for--</DELETED>
                        <DELETED>    (i) lost profits or 
                        sales;</DELETED>
                        <DELETED>    (ii) business 
                        interruption;</DELETED>
                        <DELETED>    (iii) losses indirectly suffered 
                        as a result of the defendant's wrongful act or 
                        omission;</DELETED>
                        <DELETED>    (iv) losses that arise because of 
                        the claims of third parties;</DELETED>
                        <DELETED>    (v) losses that are required to be 
                        pleaded as special damages; or</DELETED>
                        <DELETED>    (vi) items defined as 
                        consequential damages in the Uniform Commercial 
                        Code or an analogous State commercial 
                        law.</DELETED>
        <DELETED>    (5) Material defect.--</DELETED>
                <DELETED>    (A) In general.--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 
                intended.</DELETED>
                <DELETED>    (B) Exclusions.--The term does not include 
                any defect that--</DELETED>
                        <DELETED>    (i) has an insignificant or de 
                        minimis effect on the operation or functioning 
                        of an item;</DELETED>
                        <DELETED>    (ii) affects only a component of 
                        an item that, as a whole, substantially 
                        operates or functions as designed; or</DELETED>
                        <DELETED>    (iii) has an insignificant or de 
                        minimis effect on the efficacy of the service 
                        provided.</DELETED>
        <DELETED>    (6) Person.--The term ``person'' means any natural 
        person and any entity, organization, or enterprise, including 
        any corporation, company (including any joint stock company), 
        association, partnership, trust, or governmental 
        entity.</DELETED>
        <DELETED>    (7) Personal injury.--</DELETED>
                <DELETED>    (A) In general.--The term ``personal 
                injury'' means any physical injury to a natural person, 
                including death of the person.</DELETED>
                <DELETED>    (B) Exclusions.--The term does not include 
                mental suffering, emotional distress, or like elements 
                of injury that do not constitute physical harm to a 
                natural person.</DELETED>
        <DELETED>    (8) Plaintiff.--The term ``plaintiff'' means any 
        person who asserts a year 2000 claim.</DELETED>
        <DELETED>    (9) Punitive damages.--The term ``punitive 
        damages'' means damages, other than compensatory damages, that, 
        in whole or in part, are awarded against any person--</DELETED>
                <DELETED>    (A) to punish that person; or</DELETED>
                <DELETED>    (B) to deter that person, or other 
                persons, from engaging in similar behavior.</DELETED>
        <DELETED>    (10) 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 
        possession of the United States, and any political subdivision 
        thereof.</DELETED>
        <DELETED>    (11) Year 2000 civil action.--The term ``year 2000 
        civil action'' means any civil action of any kind brought in 
        any court under Federal, State, or foreign law, in which--
        </DELETED>
                <DELETED>    (A) a year 2000 claim is asserted; 
                or</DELETED>
                <DELETED>    (B) any claim or defense is related, 
                directly or indirectly, to an actual or potential year 
                2000 failure.</DELETED>
        <DELETED>    (12) Year 2000 claim.--The term ``year 2000 
        claim'' means any claim or cause of action of any kind, whether 
        asserted by way of claim, counterclaim, 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.</DELETED>
        <DELETED>    (13) 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, 
        comparing, sequencing, displaying, storing, transmitting, or 
        receiving date-related data, including--</DELETED>
                <DELETED>    (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</DELETED>
                <DELETED>    (B) the failure to recognize or accurately 
                process any specific date, and the failure accurately 
                to account for the status of the year 2000 as a leap 
                year.</DELETED>

    <DELETED>TITLE I--PRELITIGATION PROCEDURES FOR YEAR 2000 CIVIL 
                           ACTIONS</DELETED>

<DELETED>SEC. 101. PRE-TRIAL NOTICE.</DELETED>

<DELETED>    (a) Notification Period.--</DELETED>
        <DELETED>    (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 required to provide to each 
        prospective defendant a written notice that identifies and 
        describes with particularity--</DELETED>
                <DELETED>    (A) any manifestation of a material defect 
                alleged to have caused injury;</DELETED>
                <DELETED>    (B) the injury allegedly suffered or 
                reasonably risked by the prospective plaintiff; 
                and</DELETED>
                <DELETED>    (C) the relief or action sought by the 
                prospective plaintiff.</DELETED>
        <DELETED>    (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 period beginning on the date on which the prospective plaintiff 
provides notice under paragraph (1).</DELETED>
<DELETED>    (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 plaintiff a written statement 
that--</DELETED>
        <DELETED>    (1) acknowledges receipt of the notice; 
        and</DELETED>
        <DELETED>    (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.</DELETED>
<DELETED>    (c) Failure To Respond.--If a prospective defendant 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)--
</DELETED>
        <DELETED>    (1) the 90-day waiting period identified in 
        subsection (a) shall terminate at the expiration of the 30-day 
        period specified in subsection (b) with respect to that 
        prospective defendant; and</DELETED>
        <DELETED>    (2) the prospective plaintiff may commence a year 
        2000 civil action against such prospective defendant 
        immediately upon the termination of that waiting 
        period.</DELETED>
<DELETED>    (d) Failure To Provide Notice.--</DELETED>
        <DELETED>    (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 commenced a year 2000 civil action--</DELETED>
                <DELETED>    (A) without providing the notice specified 
                in subsection (a); or</DELETED>
                <DELETED>    (B) before the expiration of the 90-day 
                waiting period specified in subsection (a).</DELETED>
        <DELETED>    (2) Stay.--If a defendant elects under paragraph 
        (1) to treat a complaint as a notice--</DELETED>
                <DELETED>    (A) the court shall stay all discovery and 
                other proceedings in the action for a period of 90 days 
                beginning on the date of filing of the complaint; 
                and</DELETED>
                <DELETED>    (B) the time for filing answers and all 
                other pleadings shall be tolled during this 90-day 
                period.</DELETED>
<DELETED>    (e) Effect of Contractual Waiting Periods.--In any case in 
which a contract requires notice of nonperformance 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).</DELETED>
<DELETED>    (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 purpose of causing unnecessary delay, the court may impose a 
sanction, including an order to make payments to opposing parties in 
accordance with Rule 11 of the Federal Rules of Civil 
Procedure.</DELETED>
<DELETED>    (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.</DELETED>

<DELETED>SEC. 102. ALTERNATIVE DISPUTE RESOLUTION.</DELETED>

<DELETED>    (a) Requests Made During Notification Period.--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.</DELETED>
<DELETED>    (b) Request Made After Notification Period.--At any time 
after expiration of the 90-day notification 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.</DELETED>
<DELETED>    (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 between the parties.</DELETED>

<DELETED>SEC. 103. PLEADING REQUIREMENTS.</DELETED>

<DELETED>    (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 particularity with regard to each year 2000 
claim--</DELETED>
        <DELETED>    (1) the nature and amount of each element of 
        damages; and</DELETED>
        <DELETED>    (2) the factual basis for the calculation of the 
        damages.</DELETED>
<DELETED>    (b) Material Defects.--In any year 2000 civil action in 
which the plaintiff alleges that a product or service was defective, 
the complaint shall, with respect to each year 2000 claim--</DELETED>
        <DELETED>    (1) identify with particularity the manifestations 
        of the material defects; and</DELETED>
        <DELETED>    (2) state with particularity the facts supporting 
        the conclusion that the defects were material.</DELETED>
<DELETED>    (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 
inference that the defendant acted with the required state of 
mind.</DELETED>
<DELETED>    (d) Motion To Dismiss; Stay of Discovery.--</DELETED>
        <DELETED>    (1) Dismissal for failure to meet pleading 
        requirements.--In any year 2000 civil action, the court shall, 
        on the motion of any defendant, dismiss 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.</DELETED>
        <DELETED>    (2) Stay of discovery.--In any year 2000 civil 
        action, all discovery and other proceedings shall be stayed 
        during the pendency of any motion to dismiss, unless the court 
        finds upon the motion of any party that particularized 
        discovery is necessary to preserve evidence or prevent undue 
        prejudice to that party.</DELETED>
        <DELETED>    (3) Preservation of evidence.--</DELETED>
                <DELETED>    (A) In general.--</DELETED>
                        <DELETED>    (i) Treatment of evidence.--During 
                        the pendency of any stay of discovery entered 
                        under this paragraph, unless otherwise ordered 
                        by the court, any party to the action with 
                        actual notice of the allegations contained in 
                        the complaint shall treat the items described 
                        in clause (ii) as if they were a subject of a 
                        continuing request for production of documents 
                        from an opposing party under applicable Federal 
                        or State rules of civil procedure.</DELETED>
                        <DELETED>    (ii) Items.--The items described 
                        in this clause are all documents, data 
                        compilations (including electronically stored 
                        or recorded data), and tangible objects that--
                        </DELETED>
                                <DELETED>    (I) are in the custody or 
                                control of the party described in 
                                clause (i); and</DELETED>
                                <DELETED>    (II) relevant to the 
                                allegations.</DELETED>
                <DELETED>    (B) Sanction for willful violation.--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.</DELETED>

<DELETED>SEC. 104. DUTY TO MITIGATE.</DELETED>

<DELETED>    (a) In General.--There shall be no recovery for any year 
2000 claim on account of injury that the plaintiff could reasonably 
have avoided in light of any disclosure or other information with 
respect to which the plaintiff was, or reasonably could have been, 
aware.</DELETED>
<DELETED>    (b) Damages.--The damages awarded for any claim described 
in subsection (a) shall exclude any amount that the plaintiff 
reasonably could have avoided in light of any disclosure or information 
described in that subsection.</DELETED>

         <DELETED>TITLE II--YEAR 2000 CIVIL ACTIONS INVOLVING 
                          CONTRACTS</DELETED>

<DELETED>SEC. 201. CONTRACT PRESERVATION.</DELETED>

<DELETED>    (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 contractual terms, including 
limitations or exclusions of liability or disclaimers of warranty, 
shall be fully enforceable.</DELETED>
<DELETED>    (b) Interpretation of Contract.--In any case in which a 
contract 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 that the contract was entered into.</DELETED>
<DELETED>    (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.</DELETED>

<DELETED>SEC. 202. EVIDENCE OF REASONABLE EFFORTS AND 
              DEFENSES.</DELETED>

<DELETED>    (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 applicable law, the party against whom the 
claim of breach is asserted shall be allowed, for the purpose of 
limiting or eliminating the defendant's liability, to offer evidence 
that the implementation of the contract by that party, or the efforts 
made by that party to implement the contract, were reasonable in light 
of the circumstances.</DELETED>
<DELETED>    (b) Impossibility or Commercial Impracticability.--
</DELETED>
        <DELETED>    (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 impossibility and commercial 
        impracticability shall be determined by applicable law in 
        existence on January 1, 1999.</DELETED>
        <DELETED>    (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 doctrines referred to in 
        paragraph (1).</DELETED>

<DELETED>SEC. 203. DAMAGES LIMITATION.</DELETED>

<DELETED>    In any action in which a year 2000 claim is advanced and 
that involves a breach of contract, warranty, or related claim, in 
resolving that claim the court shall not award any damages--</DELETED>
        <DELETED>    (1) unless those damages are provided for by the 
        express terms of the contract; or</DELETED>
        <DELETED>    (2) if the contract is silent on those damages, by 
        operation of the applicable Federal or State law that governed 
        interpretation of the contract at the time the contract was 
        entered into.</DELETED>

 <DELETED>TITLE III--YEAR 2000 CIVIL ACTIONS INVOLVING TORT AND OTHER 
                    NONCONTRACTUAL CLAIMS</DELETED>

<DELETED>SEC. 301. PROPORTIONATE LIABILITY.</DELETED>

<DELETED>    (a) In General.--Except in cases involving personal 
injury, 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).</DELETED>
<DELETED>    (b) Determination of Responsibility.--</DELETED>
        <DELETED>    (1) In general.--As to any year 2000 claim, the 
        court shall instruct the jury to answer special 
        interrogatories, or if there is no jury, make findings, with 
        respect to each defendant and plaintiff, and each of the other 
        persons claimed by any of the parties to have caused or 
        contributed to the loss incurred by the plaintiff, including 
        persons who have entered into settlements with the plaintiff or 
        plaintiffs, concerning the percentage of responsibility of that 
        person, measured as a percentage of the total fault of all 
        persons who caused or contributed to the total loss incurred by 
        the plaintiff.</DELETED>
        <DELETED>    (2) Contents of special interrogatories or 
        findings.--The responses to interrogatories, or findings, as 
        appropriate, under paragraph (1) shall specify--</DELETED>
                <DELETED>    (A) the total amount of damages that the 
                plaintiff is entitled to recover; and</DELETED>
                <DELETED>    (B) the percentage of responsibility of 
                each person found to have caused or contributed to the 
                loss incurred by the plaintiff or plaintiffs.</DELETED>
        <DELETED>    (3) Factors for consideration.--In determining the 
        percentage of responsibility under this paragraph, the trier of 
        fact shall consider--</DELETED>
                <DELETED>    (A) the nature of the conduct of each 
                person alleged to have caused or contributed to the 
                loss incurred by the plaintiff; and</DELETED>
                <DELETED>    (B) the nature and extent of the causal 
                relationship between the conduct of each such person 
                and the damages incurred by the plaintiff or 
                plaintiffs.</DELETED>
        <DELETED>    (4) Nondisclosure to jury.--The standard for 
        allocation of damages under paragraph (1) shall not be 
        disclosed to members of the jury.</DELETED>

<DELETED>SEC. 302. STATE OF MIND AND FORESEEABILITY.</DELETED>

<DELETED>    (a) Defendant's State of Mind as to Year 2000 Failure.--
With respect to any year 2000 claim for money damages 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, 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 the failure would 
occur.</DELETED>
<DELETED>    (b) Injury to Plaintiff.--With respect to any year 2000 
claim for money damages in which the defendant's actual or constructive 
awareness of actual or potential harm to plaintiff is greater than the 
standard for negligence in subsection (c) and 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 plaintiff would suffer that harm.</DELETED>
<DELETED>    (c) Negligence.--With respect to any year 2000 claim for 
money damages, the defendant shall not be liable unless the plaintiff 
establishes by clear and convincing evidence, in addition to all other 
requisite elements of the claim, that the defendant knew or should have 
known that the actions of the defendant created an unreasonable risk of 
harm to the plaintiff.</DELETED>
<DELETED>    (d) Preservation of Existing Law.--Nothing in subsection 
(a), (b), or (c) shall be deemed to create any year 2000 claim or to 
relieve the plaintiff in any year 2000 civil action of the obligation 
of that plaintiff to establish any element of the cause of action of 
that plaintiff under applicable law.</DELETED>

<DELETED>SEC. 303. REASONABLE EFFORTS DEFENSE.</DELETED>

<DELETED>    Except for breach or repudiation of contract claims, as to 
any year 2000 claim seeking money damages--</DELETED>
        <DELETED>    (1) the fact that a year 2000 failure occurred in 
        an entity, facility, system, product, or component that was 
        within the control of the party against whom the claim is 
        asserted shall not constitute the sole basis for recovery; 
        and</DELETED>
        <DELETED>    (2) the party against whom the claim is asserted 
        shall be entitled to establish, as a complete defense to the 
        claim, that the party 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.</DELETED>

<DELETED>SEC. 304. DAMAGES LIMITATION.</DELETED>

<DELETED>    (a) In General.--As to any year 2000 claim in which 
punitive damages may be awarded under applicable law and in which a 
defendant is found liable for punitive damages, the amount of punitive 
damages that may be awarded to a claimant shall not exceed the greater 
of--</DELETED>
        <DELETED>    (1) 3 times the amount awarded to the claimant for 
        actual damages; or</DELETED>
        <DELETED>    (2) $250,000.</DELETED>
<DELETED>    (b) Special Rule.--</DELETED>
        <DELETED>    (1) Rule.--</DELETED>
                <DELETED>    (A) In general.--Notwithstanding 
                subsection (a), as to any year 2000 claim in which the 
                defendant is found liable for punitive damages and the 
                defendant is an individual described in subparagraph 
                (B), the amount of punitive damages shall not exceed 
                the lesser of--</DELETED>
                        <DELETED>    (i) 3 times the amount awarded to 
                        the claimant for actual damages; or</DELETED>
                        <DELETED>    (ii) $250,000.</DELETED>
                <DELETED>    (B) Description of individual.--An 
                individual described in this clause is an individual 
                whose net worth does not exceed $500,000, is an owner 
                of an unincorporated business that has fewer than 25 
                full-time employees, or is any partnership, 
                corporation, association, unit of local government, or 
                organization that has fewer than 25 full-time 
                employees.</DELETED>
        <DELETED>    (2) Applicability.--For purposes of determining 
        the applicability of this subsection 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.</DELETED>
<DELETED>    (c) Application of Limitations by the Court.--The 
limitations contained in subsection (a) or (b) shall be applied by the 
court and shall not be disclosed to the jury.</DELETED>

<DELETED>SEC. 305. ECONOMIC LOSSES.</DELETED>

<DELETED>    (a) In General.--Subject to subsection (b), a party to a 
year 2000 civil action may not recover economic losses for a year 2000 
claim based on tort unless the party is able to show that at least one 
of the following circumstances exists:</DELETED>
        <DELETED>    (1) The recovery of these losses is provided for 
        in the contract to which the party seeking to recover such 
        losses is a party.</DELETED>
        <DELETED>    (2) If the contract is silent on those losses, and 
        the application of the applicable Federal or State law that 
        governed interpretation of the contract at the time the 
        contract was entered into would allow recovery of such 
        losses.</DELETED>
        <DELETED>    (3) These losses are incidental to a claim in the 
        year 2000 civil action based on personal injury caused by a 
        year 2000 failure.</DELETED>
        <DELETED>    (4) These losses are incidental to a claim in the 
        year 2000 civil action based on damage to tangible property 
        caused by a year 2000 failure.</DELETED>
<DELETED>    (b) Treatment of Economic Losses.--Economic losses shall 
be recoverable in a year 2000 civil action only if applicable Federal 
law, or applicable State law embodied in statute or controlling 
judicial precedent as of January 1, 1999, permits the recovery of such 
losses in the action.</DELETED>

<DELETED>SEC. 306. LIABILITY OF OFFICERS AND DIRECTORS.</DELETED>

<DELETED>    (a) In General.--A director, officer, or trustee of a 
business or other organization (including a corporation, unincorporated 
association, partnership, or non-profit organization) shall not be 
personally liable as to any year 2000 claim in the capacity of that 
individual as a director or officer of the business or organization for 
an aggregate amount greater than the greater of--</DELETED>
        <DELETED>    (1) $100,000; or</DELETED>
        <DELETED>    (2) the amount of cash compensation received by 
        the director or officer from the business or organization 
        during the 12-month period immediately preceding the act or 
        omission for which liability was imposed.</DELETED>
<DELETED>    (b) Exception.--The limitation in subsection (a) shall not 
apply to any claim in which it is found by clear and convincing 
evidence that the director or officer, with specific intent to cause 
harm to the plaintiff--</DELETED>
        <DELETED>    (1) intentionally made materially misleading 
        statements relied upon by the plaintiff regarding any actual or 
        potential year 2000 problem; or</DELETED>
        <DELETED>    (2) intentionally withheld material information 
        regarding any actual or potential year 2000 problem of the 
        business or organization that the director or officer had a 
        duty to disclose.</DELETED>
<DELETED>    (c) Rule of Construction.--Nothing in this section 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 applicable State law in existence on January 1, 1999 
(including any charter or bylaw authorized by that State 
law).</DELETED>

 <DELETED>TITLE IV--CLASS ACTIONS INVOLVING YEAR 2000 CLAIMS</DELETED>

<DELETED>SEC. 401. MINIMUM INJURY REQUIREMENT.</DELETED>

<DELETED>    (a) In General.--In any 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 with respect to that claim 
only if--</DELETED>
        <DELETED>    (1) the claim satisfies all other prerequisites 
        established by applicable Federal or State law; and</DELETED>
        <DELETED>    (2) the court finds that the alleged defect in the 
        product or service was a material defect with respect to a 
        majority of the members of the class.</DELETED>
<DELETED>    (b) Determination by Court.--</DELETED>
        <DELETED>    (1) In general.--As soon as practicable after the 
        commencement of an action involving a year 2000 claim that a 
        product or service is defective and that is brought as a class 
        action, the court shall determine by order whether the 
        requirement stated in paragraph (1) is satisfied.</DELETED>
        <DELETED>    (2) Orders.--An order under this subsection may 
        be--</DELETED>
                <DELETED>    (A) conditional; and</DELETED>
                <DELETED>    (B) altered or amended before the decision 
                on the merits.</DELETED>

<DELETED>SEC. 402. NOTIFICATION.</DELETED>

<DELETED>    (a) Notice by Mail.--</DELETED>
        <DELETED>    (1) In general.--In any year 2000 civil 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.</DELETED>
        <DELETED>    (2) Exclusion of certain persons.--Any person 
        whose actual receipt of the notice is not verified by the court 
        or by counsel for 1 of the parties shall be excluded from the 
        class unless that person informs the court in writing, on a 
        date no later than the commencement of trial or entry of 
        judgment, that the person wishes to join the class.</DELETED>
<DELETED>    (b) Contents of Notice.--In addition to any information 
required by applicable Federal or State law, the notice described in 
this subsection shall--</DELETED>
        <DELETED>    (1) concisely and clearly describe the nature of 
        the action;</DELETED>
        <DELETED>    (2) identify the jurisdiction whose law will 
        govern the action;</DELETED>
        <DELETED>    (3) identify any potential claims that class 
        counsel chose not to pursue so that the action would satisfy 
        class certification requirements; and</DELETED>
        <DELETED>    (4) describe the fee arrangement of class 
        counsel.</DELETED>

<DELETED>SEC. 403. DISMISSAL PRIOR TO CERTIFICATION.</DELETED>

<DELETED>    Before determining whether to certify a class in a year 
2000 civil action, the court may decide a motion to dismiss or for 
summary judgment made by any party if the court concludes that decision 
will--</DELETED>
        <DELETED>    (1) promote the fair and efficient adjudication of 
        the controversy; and</DELETED>
        <DELETED>    (2) not cause undue delay.</DELETED>

<DELETED>SEC. 404. FEDERAL JURISDICTION IN CLASS ACTIONS INVOLVING YEAR 
              2000 CLAIMS.</DELETED>

<DELETED>    (a) Diversity Jurisdiction.--Section 1332 of title 28, 
United States Code, is amended--</DELETED>
        <DELETED>    (1) by redesignating subsections (b), (c), and (d) 
        as subsections (c), (d), and (e), respectively; and</DELETED>
        <DELETED>    (2) by inserting after subsection (a) the 
        following:</DELETED>
<DELETED>    ``(b)(1)(A) The district courts shall, regardless of the 
sum or value of the matter in controversy therein, have original 
jurisdiction of any year 2000 civil action which is brought as a class 
action and in which--</DELETED>
        <DELETED>    ``(i) any member of a proposed plaintiff class is 
        a citizen of a State different from any defendant;</DELETED>
        <DELETED>    ``(ii) any member of a proposed plaintiff class is 
        a foreign state or a citizen or subject of a foreign state and 
        any defendant is a citizen of a State; or</DELETED>
        <DELETED>    ``(iii) any member of a proposed plaintiff class 
        is a citizen of a State and any defendant is a citizen or 
        subject of a foreign state.</DELETED>
<DELETED>    ``(B) As used in this paragraph, the term `foreign state' 
has the meaning given that term in section 1603(a).</DELETED>
<DELETED>    ``(2)(A) The district court may, in its discretion, 
abstain from hearing such action in a year 2000 civil action described 
in paragraph (1) in which--</DELETED>
        <DELETED>    ``(i) the substantial majority of the members of 
        all proposed plaintiff classes are citizens of a single State 
        of which the primary defendants are also citizens; 
        and</DELETED>
        <DELETED>    ``(ii) the claims asserted will be governed 
        primarily by the laws of that State, the district court should 
        abstain from hearing such action.</DELETED>
<DELETED>    ``(B) The district court may, in its discretion, abstain 
from hearing such action in a year 2000 civil action described in 
paragraph (1) in which--</DELETED>
        <DELETED>    ``(i) all matters in controversy asserted by the 
        individual members of all proposed plaintiff classes in the 
        aggregate do not exceed the sum or value of $1,000,000, 
        exclusive of interest and costs;</DELETED>
        <DELETED>    ``(ii) the number of members of all proposed 
        plaintiff classes in the aggregate is less than 100; 
        or</DELETED>
        <DELETED>    ``(iii) the primary defendants are States, State 
        officials, or other governmental entities against whom the 
        district court may be foreclosed from ordering relief, the 
        district court may, in its discretion, abstain from hearing 
        such action.</DELETED>
<DELETED>    ``(3)(A) Paragraph (1) and section 1453 shall not apply to 
any class action that is brought under the Securities Act of 1933 (15 
U.S.C. 77a et seq.).</DELETED>
<DELETED>    ``(B) Paragraph (1) and section 1453 shall not apply to a 
class action described in subparagraph (C) that is based upon the 
statutory or common law of the State in which the issuer concerned is 
incorporated (in the case of a corporation) or organized (in the case 
of any other entity).</DELETED>
<DELETED>    ``(C) A class action is described in this subparagraph if 
it involves--</DELETED>
        <DELETED>    ``(i) the purchase or sale of securities by an 
        issuer or an affiliate of an issuer exclusively from or to 
        holders of equity securities of the issuer; or</DELETED>
        <DELETED>    ``(ii) any recommendation, position, or other 
        communication with respect to the sale of securities of an 
        issuer that--</DELETED>
                <DELETED>    ``(I) is made by or on behalf of the 
                issuer or an affiliate of the issuer to holders of 
                equity securities of the issuer; and</DELETED>
                <DELETED>    ``(II) concerns decisions of those equity 
                holders with respect to voting their securities, acting 
                in response to a tender or exchange offer, or 
                exercising dissenters' or appraisal rights.</DELETED>
<DELETED>    ``(D) As used in this paragraph, the terms `issuer', 
`security', and `equity security' have the meanings given those terms 
in section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 
78c).''.</DELETED>
<DELETED>    (b) Conforming Amendment.--Section 1332(c) of title 281 
United States Code, (as redesignated by this section) is amended by 
inserting after ``pursuant to subsection (a)'' after ``Federal 
courts''.</DELETED>
<DELETED>    (c) Determination of Diversity.--Section 1332, as amended 
by this section, is further amended by adding at the end the 
following:</DELETED>
<DELETED>    ``(f) For purposes of subsection (b), a member of a 
proposed class shall be deemed to be a citizen of a State different 
from a defendant corporation only if that member is a citizen of a 
State different from all States of which the defendant corporation is 
deemed a citizen.''.</DELETED>
<DELETED>    (d) Removal of Class Actions.--Chapter 89 of title 28, 
United States Code is amended by adding at the end the 
following:</DELETED>
<DELETED>``Sec. 1453. Removal of class actions</DELETED>
<DELETED>    ``(a) In General.--A year 2000 civil action that is 
brought as a class action may be removed to a district court of the 
United States in accordance with this chapter, except that such action 
may be removed--</DELETED>
        <DELETED>    ``(1) by any defendant without the consent of all 
        defendants; or</DELETED>
        <DELETED>    ``(2) by any plaintiff class member who is not a 
        named or representative class member of the action for which 
        removal is sought, without the consent of all members of such 
        class.</DELETED>
<DELETED>    ``(b) When Removable.--This section shall apply to any 
year 2000 civil action that is brought as a class action before or 
after the entry of any order certifying a class.</DELETED>
<DELETED>    ``(c) Procedure for Removal.--</DELETED>
        <DELETED>    ``(1) In general.--The provisions of section 
        1446(a) relating to a defendant removing a case shall apply to 
        a plaintiff removing a case under this section.</DELETED>
        <DELETED>    ``(2) Application.--With respect to the 
        application of section 1446(b), the requirement relating to the 
        30-day filing period shall be met if a plaintiff class member 
        who is not a named or representative class member of the action 
        for which removal is sought files notice of removal within 30 
        days after receipt by such class member, through service or 
        otherwise, of the initial written notice of the class action 
        provided at the trial court's direction.''.</DELETED>
<DELETED>    (e) Removal Limitations.--Section 1446(b) is amended in 
the second undesignated paragraph--</DELETED>
        <DELETED>    (1) by inserting ``, by exercising due 
        diligence,'' after ``ascertained''; and</DELETED>
        <DELETED>    (2) by striking ``section 1332'' and inserting 
        ``section''.</DELETED>
<DELETED>    (f) Technical and Conforming Amendments.--The table of 
sections for chapter 89 of title 28, United States Code, is amended by 
adding after the item relating to section 1452 the following:</DELETED>

<DELETED>``1453. Removal of class actions.''.
<DELETED>    (g) Procedure After Removal.--Section 1447 of title 28, 
United States Code, is amended by adding at the end the 
following:</DELETED>
<DELETED>    ``(f)(1) If, after removal, the court determines that no 
aspect of an action that is subject to its jurisdiction solely under 
the provisions of section 1332(b) may be maintained as a class action 
under Rule 23 of the Federal Rules of Civil Procedure, the court shall 
strike the class allegations from the action and remand the action to 
the State court.</DELETED>
<DELETED>    ``(2) Upon remand of the action, the period of limitations 
for any claim that was asserted in the 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.''.</DELETED>
<DELETED>    (h) Application of Substantive State Law.--Nothing in the 
amendments made by this section shall alter the substantive law 
applicable to an action to which such amendments apply.</DELETED>

               <DELETED>TITLE V--EFFECTIVE DATE</DELETED>

<DELETED>SEC. 501. EFFECTIVE DATE.</DELETED>

<DELETED>    This Act and the amendments made by this Act shall take 
effect on January 1, 1999.</DELETED>

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Year 2000 Fairness 
and Responsibility 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. Pretrial 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 and defenses.
Sec. 203. Contract damages.

      TITLE III--YEAR 2000 CIVIL ACTIONS INVOLVING TORT AND OTHER 
                         NONCONTRACTUAL CLAIMS

Sec. 301. Economic losses.
Sec. 302. Proportionate liability.
Sec. 303. State of mind and foreseeability.
Sec. 304. Reasonable efforts defense.
Sec. 305. Damages limitation.
Sec. 306. Liability of officers and directors.

           TITLE IV--CLASS ACTIONS INVOLVING YEAR 2000 CLAIMS

Sec. 401. Minimum injury requirement.
Sec. 402. Notification.
Sec. 403. Dismissal prior to certification.
Sec. 404. Federal jurisdiction in class actions involving year 2000 
                            claims.

                        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--
                    (i) 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
                    (ii) will fail to process those dates.
            (B) If not corrected, the problems described in 
        subparagraph (A) (referred to in this Act as ``year 2000 
        computer date-change problems'') 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 legal system of the 
                United States, 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.
                    (v) 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.
    (b) Purposes.--Based upon the power contained in 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 the resolution of year 2000 computer date-
        change disputes involving economic damages without recourse to 
        unnecessary, time consuming, and wasteful litigation; and
            (3) to lessen burdens on interstate commerce by 
        discouraging insubstantial lawsuits, while also preserving the 
        ability of individuals and businesses that have suffered real 
        injury to obtain complete relief.
    (c) Scope.--Nothing in this Act affects any claim for personal 
injury, including claims asserted by way of claim, counterclaim, cross-
claim, third-party claim, or otherwise that arise out of an underlying 
action for personal injury.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Compensatory damages.--The term ``compensatory 
        damages'' means damages that compensate the injured party for 
        the specific injury sustained.
            (2) Contract.--The term ``contract'' means a contract, 
        tariff, license, or warranty.
            (3) Defendant.--The term ``defendant'' means any person 
        against whom a year 2000 claim is asserted.
            (4) Economic loss.--The term ``economic loss''--
                    (A) means any damages, other than damages arising 
                out of personal injury or damage to tangible property; 
                and
                    (B) includes damages for--
                            (i) lost profits or sales;
                            (ii) business interruption;
                            (iii) losses indirectly suffered as a 
                        result of the defendant's wrongful act or 
                        omission;
                            (iv) losses that arise because of the 
                        claims of third parties;
                            (v) losses that are required to be pleaded 
                        as special damages; or
                            (vi) items defined as consequential damages 
                        in the Uniform Commercial Code or an applicable 
                        analogous State commercial law.
            (5) Material defect.--
                    (A) In general.--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 intended.
                    (B) Exclusions.--The term does not include 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 operates or 
                        functions as designed; or
                            (iii) has an insignificant or de minimis 
                        effect on the efficacy of the service provided.
            (6) Person.--The term ``person'' means any natural person 
        and any entity, organization, or enterprise, including any 
        corporation, company (including any joint stock company), 
        association, partnership, trust, or governmental entity.
            (7) Personal injury.--
                    (A) In general.--The term ``personal injury'' means 
                any physical injury to a natural person, including 
                death of the person.
                    (B) Exclusions.--The term does not include mental 
                suffering, emotional distress, or similar elements of 
                injury that do not constitute physical harm to a 
                natural person.
            (8) Plaintiff.--The term ``plaintiff'' means any person who 
        asserts a year 2000 claim.
            (9) Punitive damages.--The term ``punitive damages'' means 
        damages, other than compensatory damages, that, in whole or in 
        part, are awarded against any person--
                    (A) to punish that person; or
                    (B) to deter that person, or other persons, from 
                engaging in similar behavior.
            (10) 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 
        possession of the United States, and any political subdivision 
        thereof.
            (11) 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; or
                            (ii) any claim or defense is related, 
                        directly or indirectly, to an actual or 
                        potential 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.
            (12) Year 2000 claim.--The term ``year 2000 claim'' means 
        any claim or cause of action of any kind, whether asserted by 
        way of claim, counterclaim, 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.
            (13) Year 2000 failure.--The term ``year 2000 failure'' 
        means any failure by any device or system (including any 
        computer system and any microchip, semiconductor device, 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, comparing, 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 accurately to 
                account for the status of the year 2000 as a leap year.

     TITLE I--PRELITIGATION PROCEDURES FOR YEAR 2000 CIVIL ACTIONS

SEC. 101. PRETRIAL NOTICE.

    (a) Notification Period.--Before filing a year 2000 claim, except 
an action for a claim that seeks only injunctive relief, a prospective 
plaintiff shall be required to provide to each prospective defendant a 
written notice that identifies and describes with particularity--
            (1) any manifestation of a material defect alleged to have 
        caused injury;
            (2) the injury allegedly suffered or reasonably risked by 
        the prospective plaintiff; and
            (3) the relief or action sought by the prospective 
        plaintiff.
    (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 plaintiff 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) Commencement of Action.--Except as provided in subsections (d) 
and (f), a prospective plaintiff shall not file a year 2000 claim in 
Federal or State court until the expiration of the 90-day period 
beginning on the date on which the prospective plaintiff provides 
notice under paragraph (1).
    (d) Failure To Respond.--If a prospective defendant fails to 
respond to a notice provided under subsection (d) 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 subsection (c) 
        shall terminate at the expiration of the 30-day period 
        specified in subsection (b) with respect to that prospective 
        defendant; and
            (2) the prospective plaintiff may commence a year 2000 
        civil action against such prospective defendant immediately 
        upon the termination of that waiting period.
    (e) Failure To Provide Notice.--
            (1) In general.--Subject to subsections (d) and (f), 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 commenced a year 2000 civil action--
                    (A) without providing the notice specified in 
                subsection (a); or
                    (B) before the expiration of the waiting period 
                specified in subsection (c).
            (2) Stay.--If a defendant elects under paragraph (1) to 
        treat a complaint as a notice--
                    (A) the court shall stay all discovery and other 
                proceedings in the action for a period, as specified in 
                subsection (c), beginning on the date of filing of the 
                complaint; and
                    (B) the time for filing answers and all other 
                pleadings shall be tolled during that period.
    (f) Effect of Contractual Waiting Periods.--In any case in which a 
contract requires notice of nonperformance 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 otherwise applicable period specified in subsections (c) 
and (e).
    (g) Sanction for Frivolous Invocation of the Stay Provision.--If a 
defendant acts under subsection (e) 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 purpose of 
causing unnecessary delay, the court may impose a sanction, including 
an order to make payments to opposing parties in accordance with Rule 
11 of the Federal Rules of Civil Procedure or applicable State rules of 
procedures.
    (h) Computation of Time.--For purposes of this section, the rules 
regarding computation of time shall be construed in accordance with 
applicable Federal or State rules of civil procedure.
    (i) Single Period.--In any claim, action, or proceeding--
            (1) stating a year 2000 claim subject to the provisions of 
        subsection (c)(2) regarding commencement of actions applies; or
            (2) to which subsection (e)(2) regarding stays applies;
only 1 waiting or stay period, not exceeding 90 days shall be accorded 
to the parties.
    (j) Applicability of Statutes of Limitations.--Any applicable 
statute of limitations shall toll during the period during which a 
claimant has filed notice under subsection (a).

SEC. 102. ALTERNATIVE DISPUTE RESOLUTION.

    (a) Requests Made During Notification Period.--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 Period.--At any time after 
expiration of the 90-day notification 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.--
            (1) In general.--Except as provided in paragraph (2), 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)--
                    (A) 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
                    (B) all other terms achieved through the resolution 
                shall be implemented as promptly as possible based upon 
                the agreement of the parties.
            (2) Exceptions.--The 30-day period prescribed in paragraph 
        (1) shall not apply if--
                    (A) the parties engaged in alternative dispute 
                resolution under this section agree to a different 
                period of time; or
                    (B) a different period of time is established by 
                contract between 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 particularity 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 action 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 manifestations 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 inference that 
the defendant acted with the required state of mind.
    (d) Motion To Dismiss; Stay of Discovery.--
            (1) Dismissal for failure to meet pleading requirements.--
        In any year 2000 civil action, the court shall, on the motion 
        of any defendant, dismiss 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 to dismiss, unless the court finds upon 
        the motion of any party that particularized discovery is 
        necessary to preserve evidence or prevent undue prejudice to 
        that party.
            (3) Preservation of evidence.--
                    (A) In general.--
                            (i) Treatment of evidence.--During the 
                        pendency of any stay of discovery entered under 
                        this paragraph, unless otherwise ordered by the 
                        court, any party to the action shall treat the 
                        items described in clause (ii) as if those 
                        items were a subject of a continuing request 
                        for production of documents from an opposing 
                        party under applicable Federal or State rules 
                        of civil procedure.
                            (ii) Items.--The items described in this 
                        clause are all documents, data compilations 
                        (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 violation.--A party 
                aggrieved by the willful failure of an opposing party 
                to comply with subclause (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 described in subsection (a) 
shall exclude any amount that the plaintiff reasonably could have 
avoided in light of any disclosure or information with respect to which 
the plaintiff was, or reasonably should have been, aware.

         TITLE II--YEAR 2000 CIVIL ACTIONS INVOLVING CONTRACTS

SEC. 201. CONTRACT PRESERVATION.

    (a) In General.--Subject to subsection (b), in any action in which 
a year 2000 claim is advanced, in resolving that claim all written 
contractual terms, including limitations or exclusions of liability or 
disclaimers of warranty, shall be strictly enforced, unless the 
enforcement of such terms would manifestly and directly contravene 
applicable State law embodied in a specific statute specifically 
addressing that term as of January 1, 1999.
    (b) Interpretation of Contract.--In any case in which a contract 
under subsection (a) 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 that the contract was entered 
into.

SEC. 202. EVIDENCE OF REASONABLE EFFORTS AND DEFENSES.

    (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 applicable law, the party against whom the claim of 
breach is asserted shall be allowed in evidence, to offer evidence that 
the implementation of the contract by that party, or the efforts made 
by that party to implement the contract, were reasonable in light of 
the circumstances.
    (b) Impossibility or Commercial Impracticability.--
            (1) In general.--Notwithstanding any other provision of 
        law, 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 
        impossibility and commercial impracticability shall be 
        determined 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 doctrines referred to in paragraph (1).

SEC. 203. CONTRACT DAMAGES.

    In any action in which a year 2000 claim is advanced and that 
involves a breach of contract, warranty, or related claim, in resolving 
that claim the court shall not award any damages--
            (1) unless those damages are provided for by the express 
        terms of the contract; or
            (2) if the contract is silent on those damages, by 
        operation of the applicable Federal or State law that governed 
        interpretation of the contract at the time the contract was 
        entered into.

      TITLE III--YEAR 2000 CIVIL ACTIONS INVOLVING TORT AND OTHER 
                         NONCONTRACTUAL CLAIMS

SEC. 301. ECONOMIC LOSSES.

    (a) In General.--Subject to subsection (b), a party to a year 2000 
civil action may not recover economic losses for a year 2000 claim 
based on tort unless the party is able to show that at least 1 of the 
following circumstances exists:
            (1) The recovery of those losses is provided for in the 
        contract to which the party seeking to recover those losses is 
        a party.
            (2) If the contract is silent on those losses, and the 
        application of the applicable Federal or State law that 
        governed interpretation of the contract at the time the 
        contract was entered into would allow recovery of those losses.
            (3) Those losses are incidental to a claim in the year 2000 
        civil action based on personal injury caused by a year 2000 
        failure.
            (4) Those losses are incidental to a claim in the year 2000 
        civil action based on damage to tangible property caused by a 
        year 2000 failure.
    (b) Treatment of Economic Losses.--Economic losses shall be 
recoverable in a year 2000 civil action only if applicable Federal law, 
or applicable State law embodied in statute or controlling judicial 
precedent as of January 1, 1999, permits the recovery of those losses 
in the action.

SEC. 302. PROPORTIONATE LIABILITY.

    (a) In General.--Except as provided in subsection (c), 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).
    (b) Determination of Responsibility.--
            (1) In general.--With respect to any year 2000 claim, the 
        court shall instruct the jury to answer special 
        interrogatories, or if there is no jury, make findings, with 
        respect to each defendant and plaintiff, and each of the other 
        persons claimed by any of the parties to have caused or 
        contributed to the loss incurred by the plaintiff, including 
        any person who has entered into a settlement with the 
        plaintiff, concerning the percentage of responsibility of that 
        person, measured as a percentage of the total fault of all 
        persons who caused or contributed to the total loss incurred by 
        the plaintiff.
            (2) Contents of special interrogatories or findings.--Each 
        response to an interrogatory, or finding, as appropriate, under 
        paragraph (1) shall specify--
                    (A) the total amount of damages that the plaintiff 
                is entitled to recover; and
                    (B) the percentage of responsibility of each person 
                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 paragraph, the trier of 
        fact shall consider--
                    (A) the nature of the conduct of each person 
                alleged 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.
            (4) Nondisclosure to jury.--The standard for allocation of 
        damages under paragraph (1) shall not be disclosed to members 
        of the jury.
    (c) Exception.--This section does not apply if the plaintiff is an 
individual whose net worth is less than $200,000 and the plantiff's 
damages were more than 10 percent of his or her net worth. In such a 
case, the proportionally liable defendants are jointly and severally 
liable for any uncollectable amount.

SEC. 303. STATE OF MIND AND FORESEEABILITY.

    (a) Defendant's State of Mind as to Year 2000 Failure.--With 
respect to any year 2000 claim for money damages 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, 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 the failure would occur.
    (b) Injury to Plaintiff.--With respect to any year 2000 claim for 
money damages in which the defendant's actual or constructive awareness 
of actual or potential harm to plaintiff is greater than the standard 
for negligence in subsection (c) and 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 
plaintiff would suffer that harm.
    (c) Negligence.--With respect to any year 2000 claim for money 
damages, the defendant shall not be liable unless the plaintiff 
establishes by clear and convincing evidence, in addition to all other 
requisite elements of the claim, that the defendant knew or should have 
known that the actions of the defendant created an unreasonable risk of 
harm to the plaintiff.
    (d) Preservation of Existing Law.--Nothing in subsection (a), (b), 
or (c) shall be deemed to create any year 2000 claim or to relieve the 
plaintiff in any year 2000 civil action of the obligation of that 
plaintiff to establish any element of the cause of action of that 
plaintiff under applicable law.

SEC. 304. REASONABLE EFFORTS DEFENSE.

    Except for breach or repudiation of contract claims, or claims 
involving fraud or intentional tort, with respect to any year 2000 
claim in which the plaintiff is seeking money damages--
            (1) the fact that a year 2000 failure occurred in an 
        entity, facility, system, product, or component that was 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 asserted shall be 
        entitled to establish, as a complete defense to the claim, that 
        all of the actions of the party 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. 305. DAMAGES LIMITATION.

    (a) In General.--With respect to any year 2000 claim in which 
punitive damages may be awarded under applicable law and in which a 
defendant is found liable for punitive damages, the amount of punitive 
damages that may be awarded to a claimant shall not exceed the greater 
of--
            (1) 3 times the amount awarded to the claimant for 
        compensatory damages; or
            (2) $250,000.
    (b) Special Rule.--
            (1) Rule.--
                    (A) In general.--Notwithstanding subsection (a), as 
                to any year 2000 claim in which the defendant is found 
                liable for punitive damages and the defendant is a 
                person described in subparagraph (B), the amount of 
                punitive damages shall not exceed the lesser of--
                            (i) 3 times the amount awarded to the 
                        claimant for compensatory damages; or
                            (ii) $250,000.
                    (B) Description of persons.--A person described in 
                this clause is--
                            (i) an individual--
                                    (I) whose net worth does not exceed 
                                $500,000; or
                                    (II) who is an owner of an 
                                unincorporated business that has fewer 
                                than 25 full-time employees; or
                            (ii) any partnership, corporation, 
                        association, unit of local government, or 
                        organization that has fewer than 25 full-time 
                        employees.
            (2) Applicability.--For purposes of determining the 
        applicability of this subsection 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.
    (c) Application of Limitations by the Court.--The limitations 
contained in subsection (a) or (b) shall be applied by the court and 
shall not be disclosed to the jury.

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 organization) shall not be 
personally liable as to any year 2000 claim in the capacity of that 
individual as a director or officer of the business or organization for 
an aggregate amount greater than the greater of--
            (1) $100,000; or
            (2) the amount of cash compensation received by the 
        director or officer from the business or organization during 
        the 12-month period immediately preceding the act or omission 
        for which liability was imposed.
    (b) Exception.--The limitation in subsection (a) shall not apply to 
any claim in which it is found by clear and convincing evidence that 
the director or officer, with specific intent to cause harm to the 
plaintiff--
            (1) intentionally made materially misleading statements 
        relied upon by the plaintiff regarding any actual or potential 
        year 2000 problem; or
            (2) intentionally withheld material information regarding 
        any actual or potential year 2000 problem of the business or 
        organization that the director or officer had a duty to 
        disclose.
    (c) Rule of Construction.--Nothing in this section 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 applicable State law in existence on January 1, 1999 (including 
any charter or bylaw authorized by that State law).

           TITLE IV--CLASS ACTIONS INVOLVING YEAR 2000 CLAIMS

SEC. 401. MINIMUM INJURY REQUIREMENT.

    (a) In General.--In any 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 with respect to that claim only 
if--
            (1) the claim satisfies all other prerequisites established 
        by applicable Federal or State law; and
            (2) the court finds that the alleged defect in the product 
        or service was a material defect with respect to a majority of 
        the members of the class.
    (b) Determination by Court.--
            (1) In general.--As soon as practicable after the 
        commencement of an action involving a year 2000 claim that a 
        product or service is defective and that is brought as a class 
        action, the court shall determine by order whether the 
        requirement stated in paragraph (1) is satisfied.
            (2) Orders.--An order under this subsection may be--
                    (A) conditional; and
                    (B) altered or amended before the decision on the 
                merits.

SEC. 402. NOTIFICATION.

    (a) Notice by Mail.--
            (1) In general.--In any year 2000 civil 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.
            (2) Exclusion of certain persons.--Any person whose actual 
        receipt of the notice is not verified by the court or by 
        counsel for 1 of the parties shall be excluded from the class 
        unless that person informs the court in writing, on a date no 
        later than the commencement of trial or entry of judgment, that 
        the person wishes to join the class.
    (b) Contents of Notice.--In addition to any information 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 govern the 
        action;
            (3) identify any potential claims that class counsel chose 
        not to pursue so that the action would satisfy class 
        certification requirements; and
            (4) describe the fee arrangement of class counsel.

SEC. 403. DISMISSAL PRIOR TO CERTIFICATION.

    Before determining whether to certify a class in a year 2000 civil 
action, the court may decide a motion to dismiss or for summary 
judgment made by any party if the court concludes that decision would--
            (1) promote the fair and efficient adjudication of the 
        controversy; and
            (2) not cause undue delay.

SEC. 404. FEDERAL JURISDICTION IN CLASS ACTIONS INVOLVING YEAR 2000 
              CLAIMS.

    (a) Diversity Jurisdiction.--Section 1332 of title 28, United 
States Code, is amended--
            (1) by redesignating subsections (b), (c), and (d) as 
        subsections (c), (d), and (e), respectively; and
            (2) by inserting after subsection (a) the following:
    ``(b)(1)(A) The district courts shall, regardless of the sum or 
value of the matter in controversy therein, have original jurisdiction 
of any year 2000 civil action which is brought as a class action and in 
which--
            ``(i) any member of a proposed plaintiff class is a citizen 
        of a State different from any defendant;
            ``(ii) any member of a proposed plaintiff class is a 
        foreign state, or a citizen or subject of a foreign state, and 
        any defendant is a citizen of a State; or
            ``(iii) any member of a proposed plaintiff class is a 
        citizen of a State and any defendant is a citizen or subject of 
        a foreign state.
    ``(B) As used in this paragraph, the term `foreign state' has the 
meaning given that term in section 1603(a).
    ``(2)(A) The district court may, in its discretion, abstain from 
hearing such action in a year 2000 civil action described in paragraph 
(1) in which--
            ``(i) the substantial majority of the members of all 
        proposed plaintiff classes are citizens of a single State of 
        which the primary defendants are also citizens; and
            ``(ii) the claims asserted will be governed primarily by 
        the laws of that State, the district court should abstain from 
        hearing such action.
    ``(B) The district court may, in its discretion, abstain from 
hearing such action in a year 2000 civil action described in paragraph 
(1) in which--
            ``(i) all matters in controversy asserted by the individual 
        members of all proposed plaintiff classes in the aggregate do 
        not exceed the sum or value of $1,000,000, exclusive of 
        interest and costs;
            ``(ii) the number of members of all proposed plaintiff 
        classes in the aggregate is less than 100; or
            ``(iii) the primary defendants are States, State officials, 
        or other governmental entities against whom the district court 
        may be foreclosed from ordering relief, the district court may, 
        in its discretion, abstain from hearing such action.
    ``(3)(A) Paragraph (1) and section 1453 shall not apply to any 
class action that is brought under the Securities Act of 1933 (15 
U.S.C. 77a et seq.).
    ``(B) Paragraph (1) and section 1453 shall not apply to a class 
action described in subparagraph (C) that is based upon the statutory 
or common law of the State in which the issuer concerned is 
incorporated (in the case of a corporation) or organized (in the case 
of any other entity).
    ``(C) A class action is described in this subparagraph if it 
involves--
            ``(i) the purchase or sale of securities by an issuer or an 
        affiliate of an issuer exclusively from or to holders of equity 
        securities of the issuer; or
            ``(ii) any recommendation, position, or other communication 
        with respect to the sale of securities of an issuer that--
                    ``(I) is made by or on behalf of the issuer or an 
                affiliate of the issuer to holders of equity securities 
                of the issuer; and
                    ``(II) concerns decisions of those equity holders 
                with respect to voting their securities, acting in 
                response to a tender or exchange offer, or exercising 
                dissenters' or appraisal rights.
    ``(D) As used in this paragraph, the terms `issuer', `security', 
and `equity security' have the meanings given those terms in section 3 
of the Securities Exchange Act of 1934 (15 U.S.C. 78c).''.
    (b) Conforming Amendment.--Section 1332(c) of title 28, United 
States Code (as redesignated by this section), is amended by inserting 
``pursuant to subsection (a)'' after ``Federal courts''.
    (c) Determination of Diversity.--Section 1332, as amended by this 
section, is further amended by adding at the end the following:
    ``(f) For purposes of subsection (b), a member of a proposed class 
shall be deemed to be a citizen of a State different from a defendant 
corporation only if that member is a citizen of a State different from 
all States of which the defendant corporation is deemed a citizen.''.
    (d) Removal of Class Actions.--Chapter 89 of title 28, United 
States Code, is amended by adding at the end the following:
``Sec. 1453. Removal of class actions
    ``(a) In General.--A year 2000 civil action that is brought as a 
class action may be removed to a district court of the United States in 
accordance with this chapter, except that such action may be removed--
            ``(1) by any defendant without the consent of all 
        defendants; or
            ``(2) by any plaintiff class member who is not a named or 
        representative class member of the action for which removal is 
        sought, without the consent of all members of such class.
    ``(b) When Removable.--This section shall apply to any year 2000 
civil action that is brought as a class action before or after the 
entry of any order certifying a class.
    ``(c) Procedure for Removal.--
            ``(1) In general.--The provisions of section 1446(a) 
        relating to a defendant removing a case shall apply to a 
        plaintiff removing a case under this section.
            ``(2) Application.--With respect to the application of 
        section 1446(b), the requirement relating to the 30-day filing 
        period shall be met if a plaintiff class member who is not a 
        named or representative class member of the action for which 
        removal is sought files notice of removal within 30 days after 
        receipt by such class member, through service or otherwise, of 
        the initial written notice of the class action provided at the 
        trial court's direction.''.
    (e) Removal Limitations.--Section 1446(b) is amended in the second 
undesignated paragraph--
            (1) by inserting ``, by exercising due diligence,'' after 
        ``ascertained''; and
            (2) by striking ``section 1332'' and inserting ``section''.
    (f) Technical and Conforming Amendments.--The table of sections for 
chapter 89 of title 28, United States Code, is amended by adding after 
the item relating to section 1452 the following:

``1453. Removal of class actions.''.
    (g) Procedure After Removal.--Section 1447 of title 28, United 
States Code, is amended by adding at the end the following:
    ``(f)(1) If, after removal, the court determines that no aspect of 
an action that is subject to its jurisdiction solely under the 
provisions of section 1332(b) may be maintained as a class action under 
Rule 23 of the Federal Rules of Civil Procedure, the court shall strike 
the class allegations from the action and remand the action to the 
State court.
    ``(2) Upon remand of the action, the period of limitations for any 
claim that was asserted in the 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.''.
    (h) Application of Substantive State Law.--Nothing in the 
amendments made by this section shall alter the substantive law 
applicable to an action to which such amendments apply.

                        TITLE V--EFFECTIVE DATE

SEC. 501. EFFECTIVE DATE.

    This Act and the amendments made by this Act shall take effect on 
January 1, 1999.