[Congressional Record Volume 145, Number 70 (Friday, May 14, 1999)]
[Senate]
[Pages S5390-S5392]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                Y2K ACT

  Mr. WYDEN. Mr. President, as the Senate prepares for a Tuesday 
cloture vote on the Y2K litigation reform legislation, I want to spend 
just a few minutes this afternoon trying to describe where I believe we 
are in the course of the Senate debate and all the bipartisan progress 
that has been made in the last few weeks on this issue. I especially 
emphasize the bipartisan focus that has been taking place in the 
Senate.
  The House had a vote, as the Presiding Officer knows, this week. 
Regrettably, it was pretty much along partisan lines. There is 
certainly nothing partisan about this issue. If we have chaos early in 
the next century as a result of Y2K frivolous lawsuits, folks are not 
going to be sitting around asking whether Democrats or Republicans 
caused it. They are going to be saying: What was the problem? Why 
didn't the Congress deal with it?
  Fortunately, the Senate, unlike the House, has been working in a 
bipartisan way to deal with this. On the Republican side, Chairman 
McCain and Chairman Hatch, Senator Gorton, Senator Bennett, and a 
variety of Senators have worked with me and Senator Dodd, who is the 
Democratic leader on this issue and has done such a good job on the Y2K 
committee. And Senator Feinstein has made enormous contributions. She 
represents California, of course, a State that has a great interest in 
technology issues.
  The most important thing, as the Senate goes to the important Y2K 
debate next week, is for all of us to recognize that we have taken a 
completely different approach from that of the House of 
Representatives. There was no evidence of bipartisanship in the House 
last week. That has not been the case in the Senate.
  I also want to make it clear, both Senate Democrats and Republicans 
are interested in working with the White House on this legislation. For 
the White House to veto a responsible Y2K bill would be like throwing a 
monkey wrench into the technology engine that is driving this Nation's 
economic prosperity.
  I cannot believe the White House would want to do that. I know there 
are many in the White House who have ideas and suggestions and are 
talking to Senators of both parties. We are anxious to hear from them, 
because the Senate is going to move next week to this debate and now is 
the time for them to come forward with their practical suggestions.
  As the Presiding Officer knows, this is a topic that cannot wait. 
There are a variety of issues before the Senate where the immediacy may 
not be all that crucial. This is an issue that cannot wait, because if 
we do not deal with it now, I personally believe what will happen is, 
early in the next century we really will have chaos as a result of this 
Y2K situation. The Senate could find itself back in a special session 
at that time having to deal with it. It is much better to do it now and 
to do it in a bipartisan way.
  I want to spend a few minutes talking about how this effort to make 
this issue bipartisan and ensure that it is fair to both consumers and 
business has evolved over the last few weeks.
  The legislation that is coming before the Senate early next week is 
the legislation that began in the Senate Commerce Committee, led in 
that effort by Chairman McCain and Senator Gorton. Unfortunately, there 
was a strict party-line vote in the Senate Commerce Committee. I and 
others said there were a whole lot of features of that original Senate 
Commerce bill that were just unacceptable to us.
  For example, it included language that would have provided what is 
called a ``reasonable effort'' sort of defense which just was not fair 
to the plaintiff and to the consumer, and I and others said that we 
could not support the bill at that time.

  But after it came out of the Senate Commerce Committee, Chairman 
McCain, to his credit, with other leaders on the Republican side of the 
aisle, made it clear that they wanted to work with Senator Dodd, 
Senator Feinstein, Senator Kerry, myself, and others to fashion a truly 
bipartisan bill. I believe that is what the Senate has before it now.
  For example, the legislation which is coming before the Senate on 
Tuesday, which we will vote on Tuesday morning, has a sunset provision 
in it. We have heard all this talk on the floor of the Senate about how 
Y2K litigation legislation is going to be changing the tort laws and 
our legal system for all time, that it is going to be making these 
changes that are just going to last for time immemorial.
  The fact of the matter is, the Y2K legislation sunsets in 2003. It is 
for a short period of time, and for a period of time to deal with what 
we think will otherwise be a variety of frivolous lawsuits and 
unnecessary litigation.
  Second, the legislation which will be before the Senate early next 
week does absolutely nothing to change the tort remedies that consumers 
would have if they were injured as a result of a Y2K-related problem.
  For example, if an individual is in an elevator that falls as a 
result of a computer failure, and tragically falls, say, 10 floors in 
an office building, and that individual is badly injured or killed, in 
that instance all of the existing legal remedies, all of the existing 
tort remedies that are now on the books, would still apply. The 
legislation before the Senate now would not touch in any way, not in 
any way, those remedies for personal injuries that would come about as 
a result of a Y2K failure.
  So those two consumer protections--the sunset provision and ensuring 
that tort remedies are available to injured consumers--are in place and 
there to protect the public, and it is important that the Senate know 
that as we go to the upcoming Tuesday vote.

[[Page S5391]]

  Third, the legislation which is before the Senate now eliminates the 
new and vague Federal defense, ``reasonable efforts,'' which was what 
was in the original Commerce Committee legislation. We think that was 
simply too mushy, too vague. It has been eliminated.
  Fourth, after the legislation left the Commerce Committee, there were 
concerns about a new preemptive Federal standard for establishing 
punitive damages. Now, under the legislation before the Senate, the 
current standards as set out in our various States are going to 
prevail.
  Fourth, after the legislation left the committee, we restored 
punitive damages in the most important cases. If a defendant is acting 
in bad faith, is engaged in egregious conduct that is offensive to 
consumers, all of the opportunities for punitive damages will lie. 
Also, if the defendant is insolvent, there will be a chance for the 
plaintiff to be made whole in those kinds of instances as well.
  So the principle of joint liability for defendants in these key areas 
is in fact kept in place.
  Next, we restore liability for directors and officers when they make 
misleading statements and withhold information regarding any actual or 
potential Y2K problem.
  So all of that was essentially in the changes which Senator McCain 
and I brought to the Senate several weeks ago. We thought that that 
showed a good-faith effort to work with all sides, to work with the 
technology community, to work with consumer organizations. We consulted 
with the organizations representing trial lawyers. We thought it 
reflected a good balance.

  After that effort, Senator Dodd, the Democratic leader on the Y2K 
issue, presented a number of other very, very good suggestions, and 
those have been added as well.
  So the Senate now has a Y2K reform bill in front of it where there 
have been 10 major changes made since this legislation left the 
Commerce Committee, changes that Senator McCain and I agreed to, that 
we thought did the job. Senator Dodd came forward with some other 
additional and excellent changes. And Senator McCain, to his credit and 
effort to be bipartisan, accepted those as well.
  So we have now, I think, addressed what has been the original concern 
of a number of Senators. We keep in place, for example, the States' 
standards with respect to evidence in these cases. There was a concern 
by some Senators that somehow this legislation had raised the bar in 
terms of the plaintiff having to meet higher standards of evidence in 
order to make their case. We kept the current State evidentiary 
standards.
  So now in fact our standards with respect to evidence track the 
language in the securities litigation reform bill that was passed and 
signed into law as well as the 1992 Y2K Information Readiness 
Disclosure Act. So it is clear that there is precedent for the 
evidentiary standards we are using in this legislation.
  These are major changes. They were put together by a bipartisan group 
and together, I think, reflect the kind of legislation that the Senate 
ought to pass and I think will pass when we get an opportunity to vote 
on the legislation on the merits.
  I will also tell you that this makes the Senate bill a very, very 
different bill from the legislation the House of Representatives 
enacted a few days ago. The House legislation in fact had a vague 
reasonable-efforts defense. We got rid of that after it came out of the 
Senate Commerce Committee. Senator McCain and I and Senator Feinstein 
and others looked at the legislation. We got rid of that. We said it is 
too vague, it is not fair to the plaintiff or the consumer. The House 
kept it earlier in the week.
  The House legislation did not have a sunset date in it. Our 
legislation does. It says this is going to be for a short time window, 
until 2003.
  A number of other changes which we think are not fair to the 
plaintiff or the consumer were areas that the House was unwilling to 
touch. On the directors and officers, they do not take the position 
that we take. They would limit liability for directors and officers. 
They do not take the position that we take on proportionate liability. 
And in fact they do have a higher evidentiary standard for the 
plaintiff and the consumer than we do.
  So the fact is, the Senate will be voting on a very, very different 
bill. I am hopeful that the Senate will strongly endorse our approach, 
which we think is fair to both plaintiffs and defendants.
  There have been other ideas floated in the last couple of days. I 
will wrap up just for a few minutes by talking about them, because I 
think if you look at what is being floated now, our legislation again 
falls right into the balanced, centrist kind of approach the Senate 
ought to be taking. I am going to wrap up just by briefly discussing 
some of these other ideas which have been circulated in the last couple 
of days.

  There are some who would like to limit the legislation only to 
commercial laws. This would deny the consumer the chance to get a Y2K 
problem fixed in a timely manner. That is what we do in our 
legislation. But some who would limit the legislation only to 
commercial laws would force those who are least able to afford 
attorneys to go out and have to hire them. Under our bill, the consumer 
tells the manufacturer or the vendor how they want the problem fixed 
and they would be able to get the job done in 90 days or less.
  I do not think the consumer wants to spend months and even years 
waiting in line after all the other frivolous lawsuits go forward 
before theirs. I think people want to get their problems solved and 
want to get them solved quickly. The fact is, under our legislation, if 
the consumer, if the plaintiff, is not treated fairly, if the consumers 
do not believe they get a fair shake, they can go out and file suit on 
the very first day--the very first day--and be in a position to have 
their issue aired immediately.
  Some of the other proposals that have been offered would offer no 
protection for small business from punitive damages. Without some 
protection, a small business could be facing an avalanche of lawsuits. 
Putting a small business out of business is, in my view, an odd way to 
try to fix the Y2K problem. But what Senator Dodd did, with the 
valuable additions that he made, was the kind of approach that I think 
really does protect the small business and deal with the issue of small 
businesses and punitive damages responsibly. Unlimited joint liability, 
and we have heard some who have advocated that, would declare open 
season on anybody in the wholesale or in the retail chain. You do that, 
and there is absolutely no protection for the small business mainstream 
retailer.
  Now, what has been interesting is that some who have opposed the 
efforts that our bipartisan group has made on the Y2K issue have said 
that we are against small business and that small business does not get 
a fair shake under our legislation.
  The fact of the matter is that hundreds of small business 
organizations have endorsed the bipartisan legislation that is before 
the Senate. I think the idea of having unlimited joint liability really 
would be inequitable to the small business. Certainly, we ought to make 
sure those small businesses that are most vulnerable get a fair shake.
  Other approaches just do not offer the incentives to business that we 
think are necessary to help fix the Y2K problem. They just force the 
consumer into the courtroom, really give businesses no reason to help 
mitigate the Y2K situation.
  This isn't a partisan issue. It affects every computer system that 
uses date information. Every piece of hardware, every piece of an 
operating support system, and every software program that uses date-
related information may be affected. It is not a design flaw.

  There has somehow been spread across the country the notion that all 
of this stems from design flaws in our computer systems. It was an 
engineering trade-off. To get more space on a disk and in memory, the 
precision of century indicators was abandoned. It is hard for all of us 
to believe today that disk and memory space used to be at a premium, 
but it was. In the early 1960s, for example, computer memory cost as 
much as $1 million for what today can be purchased for less than $100. 
No computer programmer thought that the programs written then would 
still be running in the year 2000, but they are.

[[Page S5392]]

  The trade-off became the industry standard, and computers cannot work 
at all without industry standards. Those standards are the means by 
which programs and systems exchange information.
  I guess you could try to solve the Y2K problem by just dumping all 
the old layers of computer code that have been accumulated in the last 
few decades, but that is not a realistic way to proceed. Everybody 
involved, from CEOs to all of the people doing basic programming, need 
to continue the painstaking process of making sure that all systems are 
Y2K compliant. Our goal ought to be to bring every information 
technology system into Y2K compliance as soon as possible. That ought 
to be our principal focus and, at the same time, we ought to make sure, 
as our legislation does, that there is a good safety net in place.
  I am very hopeful that the Senate will pass this legislation. We all 
know that the economic good times that we have seen recently are being 
driven by technology. I have said repeatedly that if there is a veto of 
a bipartisan, responsible Y2K bill, that really would be like throwing 
a monkey wrench into the technology engine that is driving our Nation's 
prosperity. There is no other way to put it. We have to get a good 
bipartisan Y2K reform bill on the President's desk. We need to do it 
now.
  I am hopeful that the White House will work with us constructively in 
the days ahead. I think the changes that have been made since this 
legislation originally came out of the Senate Commerce Committee do the 
job. I can tell you, having heard from Senator McCain and Senator Hatch 
and Senator Dodd and Senator Feinstein, we are open to other ideas and 
suggestions as well. But we have to get this legislation moving. We 
have to get it signed. It is too important.
  I hope our colleagues get a little bit of R&R over the weekend. This 
has been a long week with the juvenile justice legislation. That bill 
and Y2K and other subjects are coming up next week, which will be 
hectic as well. I am very hopeful our colleagues will support the 
bipartisan Y2K bill that we will have before us Tuesday at 9:45.
  Mr. President, I yield the floor.

                   RECESS UNTIL MONDAY, MAY 17, 1999

  The PRESIDING OFFICER. Under the previous order, the Senate now 
stands in recess until Monday, May 17, 1999.
  Thereupon, the Senate, at 3:29 p.m., recessed until Monday, May 17, 
1999, at 12 noon.