[Congressional Record Volume 145, Number 96 (Thursday, July 1, 1999)]
[Senate]
[Pages S8017-S8035]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page S8017]]

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                                 Senate

                       Y2K ACT--CONFERENCE REPORT

  Mr. McCAIN. Mr. President, I ask unanimous consent to lay aside the 
pending business and turn to the conference report to accompany H.R. 
775.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report.
  The assistant legislative clerk read as follows:

       The committee on conference on the disagreeing votes of the 
     two Houses on the amendment of the Senate to the bill (H.R. 
     775), to establish certain procedures for civil actions 
     brought for damages relating to the failure of any device or 
     system to process or otherwise deal with the transition from 
     the year 1999 to the year 2000, and for other purposes, 
     having met, after full and free conference, have agreed to 
     recommend and do recommend to their respective Houses this 
     report, signed by a majority of the conferees.

  The PRESIDING OFFICER. Without objection, the Senate will proceed to 
the consideration of the conference report.
  (The conference report is printed in the House proceedings of the 
Record of June 29, 1999.)
  The PRESIDING OFFICER. Under the previous order, debate on the 
conference report is limited in the following manner:
  The Senator from Arizona, Mr. McCain, 20 minutes;
  The Senator from Connecticut, Mr. Dodd, 15 minutes;
  The Senator from Oregon, Mr. Wyden, 15 minutes;
  The Senator from Vermont, Mr. Leahy, 10 minutes;
  The Senator from South Carolina, Mr. Hollings, 50 minutes.
  Immediately following that debate, the Senate will proceed to a vote 
on the adoption of the conference report with no other intervening 
action or debate.
  The Senator from Arizona.
  Mr. McCAIN. Mr. President, I don't intend to use all of my time. I 
intend to yield 5 minutes to the Senator from Washington. I have talked 
to other Members who have time under this agreement. For the benefit of 
my colleagues, I think we will not use all of the time as outlined in 
the unanimous-consent agreement.
  I am pleased to urge the final passage of the conference report on 
H.R. 775. This has been a long and arduous process. While there have 
been times when the bill appeared to be moving slowly, or even dying, I 
was always confident we would do the right thing and pass this final 
bill.
  We are now ready to enact this critical legislation. For the benefit 
of my colleagues, the House has just passed the conference report by a 
vote of 404-24. This is a victory for the Nation and for the continued 
prosperity of our economy as we enter the new millennium.
  This is a critical piece of legislation. It allows all of our 
businesses and industries, large and small, hitech and non-hitech, to 
concentrate their efforts for the next 6 months on preventing Y2K 
problems from happening, and planning remediation measures. Rather than 
spending time, resources and money planning litigation defenses, we can 
be focusing on the means for fixing the problems.
  This legislation strikes a very fair and practical balance in 
protecting the economy and protecting the rights of consumers. And very 
importantly, I want to note, it addresses needs and problems of small 
businesses, as well as large.
  I would like to dispel any misconceptions or misinformation that 
there was any underhandedness in the final negotiation and drafting of 
revisions to this bill. Despite attempts to address Administration 
concerns last week with revisions and compromises that were made 
Friday, over the weekend, and on Monday, final negotiations and 
proposals by the White House were made on Tuesday morning, as we 
pressed against the deadline for completion of the conference report. 
Final revisions and drafting were made with every effort and good faith 
intention to respond to the generalized requests of the White House. 
Challenges to the integrity, professionalism and honor of the conferees 
and staff are unwarranted. This is a fair bill that reflects a 
bipartisan compromise.
  Perhaps the recent vote just a few minutes ago in the House might 
indicate that is an overwhelming view in the other body. I am sure the 
vote in the Senate will also indicate overwhelming support for this 
legislation.
  During the conference, the Senate and the House proponents of the 
legislation agreed to at least 10 substantive changes to the bill. 
These significant compromises were in addition to 10 or more major 
concessions made in the Senate from the time it was passed by the 
committee until its passage on the floor. These revisions and 
compromises have resulted in a more narrowly tailored piece of 
legislation but one that will still accomplish everything we set out to 
accomplish when the bill was introduced in January.
  We know the provisions of the bill:
  The 30-day notice and 60-day remediation period allows prompt 
resolution of problems without time-consuming and expensive litigation
  It provides that defendants are responsible for the share of harm 
they cause, with some exceptions to ensure that consumers are made 
whole.
  It requires plaintiffs to mitigate damages.
  It penalizes defendants who intentionally defraud or injure 
plaintiffs; or who are bad actors.
  It provides liability protection for those not directly involved in a 
Y2K failure.
  It assures that someone will not lose his house if a mortgage payment 
cannot be made or processed because of a Y2K failure.
  It sunsets in three years.
  It does not deny the right of anyone to redress legitimate 
grievances.

[[Page S8018]]

  This legislation will encourage an atmosphere of cooperation in 
solving problems, rather than rushing to the courthouse. Emphasizing 
the need to talk out and resolve differences rather than litigating 
them will be helpful not only in the Y2K situation, but I hope will 
move us away from the litigious nature of our country today.
  I am especially pleased at the level of bipartisan and bicameral 
cooperation in bringing this legislation to fruition. This legislation 
demonstrated the true ability of both parties and both bodies of 
Congress to work together for the good of the country. The efforts on 
both sides of the aisle and both sides of the Capitol to achieve 
consensus have been tireless. This conference has truly been a civics 
class example of how Congress can rise above special interest demands 
to do the right thing in the public interest
  Mr. President, there are many who have contributed to this effort, 
particularly during the conference with the House. I want to especially 
mention the steadfast support and efforts of both Senator Dodd and 
Wyden. They worked late into the night this week to negotiate with the 
White House and assure the President's support.
  I thank my two colleagues, Senator Dodd and Senator Wyden. This bill 
passed the Commerce Committee 11-9 on a strict partisan vote. Thanks to 
the efforts of those two individuals, who have been tireless, we were 
able to not only work with the other side of the Capitol, but the White 
House. Senator Wyden and Senator Dodd have better relations with the 
White House than I do. That is no secret to anyone around here. The 
fact that they were able to work more closely with the White House than 
I ever could have was a significant and, frankly, critical part of this 
agreement that we made. I again extend my deep appreciation to them.
  It did not win them the ``Miss Congeniality'' award in their own 
caucus--something I am familiar with on this side of the aisle.
  My appreciation, as well as a certain amount of sympathy, goes out to 
them. In all seriousness, without their efforts we would not be here.
  I also think they would join me in expressing appreciation to 
Congressman Goodlatte and Congressman Davis on the other side. 
Congressman Goodlatte and Congressman Davis started with a piece of 
legislation far more ``restrictive''--if that is the right word--in the 
opinion of some, a lot better.
  The fact is, they were willing to agree to the movement in the 
compromises that were made. They clearly could have held their ground 
and we couldn't have moved forward.
  By the way, Congressmen Goodlatte, Davis, and Sensenbrenner were the 
originators of this legislation.
  I also thank Senator Gorton, Senator Feinstein, Senator Hatch, and 
Senator Bennett.
  It reminds me of the old line of Jack Kennedy after the Bay of Pigs: 
Victory has 1,000 fathers and defeat has 1 poor lonely orphan.
  Along with that philosophy, I thank the staff members on both sides 
of the aisle and both sides of the Capitol: Carol Grunberg of Senator 
Wyden's staff; Shawn Maher of Senator Dodd's staff; Jeanne Bumpus of 
Senator Gorton's staff; Larry Block with Senator Hatch; Steven Wall on 
Senator Lott's staff; Laurie Rubenstein with Senator Lieberman; Tania 
Calhoun of the Y2K Committee; Diana Schacht of the House Judiciary 
Committee; Phil Kiko, of Congressman Sensenbrenner's staff; Amy 
Herrink, of Congressman Davis staff; and Ben Kline of Congressman 
Goodlatte's staff.
  Finally, I thank the coalition that got behind this legislation. 
Their help was as broad as any coalition of businesses--large, small, 
and medium sized--I have seen in my experience here in the Senate.
  I thank the National Association of Manufacturers, the Chambers of 
Commerce, and hi-tech groups, including ITAA, ITI, and BSA.
  I ask unanimous consent a list of the year 2000 coalition members be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                    Year 2000 Coalition Members List

       Aerospace Industries Association.
       Airconditioning & Refrigeration Institute.
       Alaska High-Tech Business Council.
       Alliance of American Insurers.
       American Bankers Association.
       American Bearing Manufacturers Association.
       American Boiler Manufacturers Association.
       American Council of Life Insurance.
       American Electronics Association.
       American Entrepreneurs for Economic Growth.
       American Gas Association.
       American Institute of Certified Public Accountants.
       American Insurance Association.
       American Iron & Steel Institute.
       American Paper Machinery Association.
       American Society of Employers.
       American Textile Machinery Association.
       American Tort Reform Association.
       America's Community Bankers.
       Arizona Association of Industries.
       Arizona Software Association.
       Associated Employers.
       Associated Industries of Missouri.
       Associated Oregon Industries, Inc.
       Association of Manufacturing Technology.
       Association of Management Consulting Firms.
       BIFMA International.
       Business and Industry Trade Association.
       Business Council of Alabama.
       Business Software Alliance.
       Chemical Manufacturers Association.
       Chemical Specialties Manufacturers Association.
       Colorado Association of Commerce and Industry.
       Colorado Software Association.
       Compressed Gas Association.
       Computing Technology Industry Association.
       Connecticut Business & Industry Association, Inc.
       Connecticut Technology Association.
       Construction Industry Manufacturers Association.
       Conveyor Equipment Manufacturers Association.
       Copper & Brass Fabricators Council.
       Copper Development Association, Inc.
       Council of Industrial Boiler Owners.
       Edison Electric Institute.
       Employers Group.
       Farm Equipment Manufacturers Association.
       Flexible Packaging Association.
       Food Distributors International.
       Grocery Manufacturers of America.
       Gypsum Association.
       Health Industry Manufacturers Association.
       Independent Community Bankers Association.
       Indiana Information Technology Association.
       Indiana Manufacturers Association, Inc.
       Industrial Management Council.
       Information Technology Association of America.
       Information Technology Industry Council.
       International Mass Retail Association.
       International Sleep Products Association.
       Interstate Natural Gas Association of America.
       Investment Company Institute.
       Iowa Association of Business & Industry.
       Manufacturers Association of Mid-Eastern PA.
       Manufacturer's Association of Northwest Pennsylvania.
       Manufacturing Alliance of Connecticut, Inc.
       Metal Treating Institute.
       Mississippi Manufacturers Association.
       Motor & Equipment Manufacturers Association.
       National Association of Computer Consultant Business.
       National Association of Convenience Stores.
       National Association of Hosiery Manufacturers.
       National Association of Independent Insurers.
       National Association of Manufacturers.
       National Association of Mutual Insurance Companies.
       National Association of Wholesaler-Distributors.
       National Electrical Manufacturers Association.
       National Federation of Independent Business.
       National Food Processors Association.
       National Housewares Manufacturers Association.
       National Marine Manufacturers Association.
       National Retail Federation.
       National Venture Capital Association.
       North Carolina Electronic and Information Technology 
     Association.
       Technology New Jersey.
       NPES, The Association of Suppliers of Printing, Publishing, 
     and Converting Technologies.
       Optical Industry Association.
       Printing Industry of Illinois-Indiana Association.
       Power Transmission Distributors Association.
       Process Equipment Manufacturers Association.
       Recreation Vehicle Industry Association.
       Reinsurance Association of America.
       Securities Industry Association.
       Semiconductor Equipment and Materials International.
       Semiconductor Industry Association.
       Small Motors and Motion Association.
       Software Association of Oregon.
       Software & Information Industry Association.
       South Carolina Chamber of Commerce.

[[Page S8019]]

       Steel Manufacturers Association.
       Telecommunications Industry Association.
       The Chlorine Institute, Inc.
       The Financial Services Roundtable.
       The ServiceMaster Company.
       Toy Manufacturers of America, Inc.
       United States Chamber of Commerce.
       Upstate New York Roundtable on Manufacturing.
       Utah Information Technology Association.
       Valve Manufacturers Association.
       Washington Software Association.
       West Virginia Manufactures Association.
       Wisconsin Manufacturers & Commerce.

  Mr. McCAIN. We could not have succeeded without them.
  I do not intend to make further remarks except to reserve about 5 
minutes of my time for the Senator from Washington. I reserve the 
remainder of my time.
  The PRESIDING OFFICER. Who yields time? The Senator from Oregon.
  Mr. WYDEN. Mr. President, it is a great honor to be on the floor 
today to express my special appreciation at being able to work with 
Senator McCain, Senator Dodd, and so many of our colleagues on both 
sides of the aisle on this important legislation.
  This bill is designed with one point and that is to make sure that 
America's prosperity does not screech to a halt when the calendar pages 
flip over to start a new millennium. I am of the view that with this 
bill, millions of consumers and businesses are more likely to be on 
line at the turn of the century than waiting in line for a courtroom 
date.
  I am especially pleased at the bipartisan efforts to make sure the 
individual consumer was protected in this legislation. This legislation 
allows consumers to get punitive damages against the bad actors. It 
makes sure consumers cannot be ripped off with fraudulent 
misrepresentations. It greatly expands the opportunity for consumers to 
bring cases in State rather than Federal court. And the conference 
report ensures that the individual consumer doesn't get the shaft 
because they are going to be in a position to be made whole when you 
take the entire package of remedies that would be available to them.
  I am going to focus for just a moment on the 20 major changes that 
were made in this legislation after it left the Senate Commerce 
Committee; seven of them Chairman McCain and I agreed on and one of 
them was a bottom-line proposition for me. The Senator from South 
Carolina, who is so eloquent with respect to the rights of plaintiffs 
in our country, was concerned, legitimately, about the long-term 
ramifications of this legislation. At my insistence, after the Senate 
Commerce Committee completed its work, Chairman McCain added a 3-year 
sunset provision to this legislation. So this is going to be a bill to 
deal with a finite, discrete problem, not something that is going to 
linger for decades and decades.

  We also eliminated the vague Federal defenses that were involved 
early on. We dropped the preemptive standards for punitive damages. We 
made sure that bad actors were not going to get a free ride. We 
restored joint liability for defendants who knowingly committed fraud. 
There were extra damages for plaintiffs facing insolvent defendants and 
we restored limited liability for directors and officers. That is what 
we began with after it left the Senate Commerce Committee and why I was 
pleased to join with Chairman McCain.
  Then Senator Dodd, who is the Democrats' leader on these technology 
issues and who has given me, as a junior Member of this body, so much 
counsel, came along and made an additional set of important changes so 
as to particularly protect small businesses. We also went further with 
respect to officers and directors, and we made sure that plaintiffs 
were not going to face tougher evidentiary standards because of the 
good work done by the Senator from Connecticut.
  Then we went to the conference committee and there were 10 major 
changes made to address concerns of the White House. In the area of 
proportionate liability, we doubled the orphan share for the solvent 
defendants, we tripled the orphan share for defendants when the 
plaintiffs were bad actors, and we assured that individual consumers 
facing insolvent defendants were made whole.
  We made a number of changes in the class action area. We boosted the 
monetary threshold. In committee, when we began it was at $1 million. 
Now it is at $10 million. We boosted the class size from 50 to 100 
plaintiffs. We also added provisions to make sure cases could be dealt 
with under remand provisions to assist the consumer.
  Finally, there were changes in securities law to exempt private 
securities claims under this act, strong provisions with respect to 
contract enforcement. And to address a number of the important issues 
that our colleague from North Carolina has raised with respect to 
economic loss, we stipulated the economic loss rules would apply in a 
number of instances so as to give the consumer yet another tier of 
protection.
  Our Nation needs a game plan for Y2K. This legislation is not going 
to solve all of the Y2K problems that crop up early in the next 
century. But what we will do by passing this legislation is ensure that 
we do not compound the problems we know are going to occur. We are 
doing it in a way that is going to ensure consumers are made whole, 
that bad actors face the stiffest of penalties, and at the same time we 
do not encourage mindless litigation that does nothing other than drain 
the vitality out of our economic prosperity.
  I have believed for a long time that failure to pass legislation in 
this area would be similar to lobbing a monkey wrench into the Nation's 
technology engine which is driving our prosperity. This legislation 
gives us the opportunity to keep that prosperity going. I am very 
honored to have had the opportunity to be part of this effort.
  I pay special thanks, in wrapping up my remarks, to my colleague, 
Senator Dodd, the Democratic leader on these technology issues. A 
little bit after midnight on Monday--I guess that would be early 
Tuesday morning--this relatively young Senator was getting a little 
pooped and beginning to wonder how much longer I could keep going. The 
distinguished Senator from Connecticut said: This is not an option. We 
are going to stay at it until this legislation gets done. I say to my 
pal from Oregon, I am going to be talking to the President of the 
United States tonight.

  I looked at my watch and I thought: Well, it is quarter to 1. This is 
going to be interesting, to learn a little bit more about this call. 
But in fact, as a result of the efforts of Senator Dodd, the work that 
was done by Chairman McCain and his staff and a variety of colleagues 
on both sides of the aisle in those early morning hours, on Tuesday we 
consummated the 20 major changes that were made in this legislation to 
ensure we had a bipartisan bill. So I have to tell you, this 
legislation, which was on the ropes early Tuesday morning with a lot of 
us thinking that it was going down for the count, now is a bill that 
our body can be proud of. It is a genuine compromise. I am not going to 
continue further because I know there are a number of colleagues who 
wish to speak as well. But I do want to pay tribute to a number of our 
staff who put in these extraordinary hours.
  I see Marti Allbright and Mark Buse over there, with Chairman McCain; 
Senator Dodd's staff as well. Carol Grunberg, who is here with me, is 
sort of the Senate's Bionic Woman. She just kept going when it was so 
important to keep the parties together.
  I am proud to be part of this effort. I look forward to what I hope 
will be a resounding vote in the Senate before too long. I yield the 
floor.
  The PRESIDING OFFICER. Who yields time? The Senator from Vermont.
  Mr. LEAHY. Mr. President, how much time is reserved under the 
unanimous consent agreement for the Senator from Vermont?
  The PRESIDING OFFICER. The Senator has 10 minutes.
  Mr. LEAHY. Mr. President, this conference report on the Y2K liability 
protection bill is being roundly praised, but not universally. Not 
universally. And it should not be. This bill is worse than the bill the 
Senate passed only a few weeks ago. The conference report provides 
expanded legal protections, especially at the expense of consumers, and 
I believe it raises serious constitutional questions. I do not support 
it because it is an unjustified wish list for special interests that 
are or might become involved in Y2K litigation.
  The conference report greatly expands the scope of the Senate-passed 
bill by amending this act to apply to a potential Y2K failure. In fact, 
section 4

[[Page S8020]]

of the bill was amended during the conference to apply to the act's 
legal restrictions for a potential Y2K failure that could occur or has 
allegedly caused harm or injury before January 1, 2003. Let me ask, 
what is a potential Y2K failure? Nobody knows. I tell you this, over 
the next 4 years almost every lawsuit involving any technology issue 
could trigger the bill's special legal protections under this sweeping 
definition.
  Once again, the majority is manipulating a key phrase to suit the 
wants of a special interest. The business lobby has inserted its own 
expanded definition of a Y2K action to broaden the scope of this bill. 
A House conferee observed when this expanded definition was first 
proposed last Thursday that it was an expansive definition that had 
been expressly rejected during House Judiciary Committee proceedings. 
It certainly was not accepted here. Lo and behold, like the ``Lady of 
the Lake'' rising, we find this comes out of the ether during the 
conference.
  Not really even during the conference. In fact, that may be one 
reason the conference was never called to meet for a second time to go 
over the proposed conference report or to even vote on these matters, 
because it was easier to have matters not considered by the House or 
the Senate or the conference or voted on, but those that came from 
somewhere--not from us. But there they are.
  In fact, after the first truncated meeting was adjourned and a 
possible follow up meeting was postponed Tuesday morning, the 
conference was never called back into public session to debate the 
proposal or even permit amendments to be offered and voted on. I 
predicted at the first and only preliminary meeting of the conference 
that I would not be allowed an opportunity to improve the bill by 
adding balance and protecting consumers, or at least even get a vote on 
it. I am sorry to report that I was correct. In fact, the conference 
report was filed without any follow up meeting or votes by the 
conference committee.
  That is an interesting way of doing things. If we have a lobby that 
does not want something, like the juvenile justice bill that passed--
they do not want it because they lost on the gun issues--why, it comes 
to a screeching halt: We are studying it, we are reviewing it, we want 
to deliberate this, we need to have time for votes, we have to have a 
conference and go thoroughly into it.
  We have another lobby that says we want this Y2K bill: We do not like 
the bill that passed the Senate, and the House did not do enough for 
us. Will you throw a bunch of stuff in, don't vote on it, don't talk 
about it, don't have any procedure, just toss it in, because this is 
what we want, and, oh, by the way, we want it right now, we need it in 
a hurry.
  This vagueness of a potential Y2K failure will also add to more 
future litigation instead of curbing it. From a bill that is supposed 
to deter frivolous litigation, this new, vague definition will produce 
more lawsuits and may give special legal protection to many more 
companies than the Senate-passed bill.
  These special legal protections include: 90-day waiting period to 
file a lawsuit, heightened pleading requirements, duty to anticipate 
and avoid Y2K damages, overriding implied warranties under State law, 
proportionate liability, and many others. All these special legal 
protections still apply to small business owners and consumers in this 
so-called compromise. In fact, the bill, as presently drafted, would 
preempt consumer protection laws of each of the 50 States.
  I have to ask: Why does this bill create new protections for large 
corporations while taking away existing protections for ordinary 
citizens? Maybe they do not have as much influence at the conference.
  Many consumers may not be aware of potential Y2K problems in the 
products they buy for personal, family, or household purposes. They 
just go to the store and buy it and expect it to work. They are going 
to find a real surprise if there is something in there that does not 
work. One thing that will not work is the usual remedies they expect 
out of the consumer protection laws.
  This bill as presently drafted would preempt the consumer protection 
laws of each of the 50 states and restrict the legal rights of 
consumers who are harmed by Y2K computer failures.
  Why is this bill creating new protections for large corporations 
while taking away existing protections for the ordinary citizen? We all 
know that individual consumers do not have the same knowledge or 
bargaining power in the marketplace as businesses with more resources.
  Many consumers may not be aware of potential Y2K problems in the 
products that they buy for personal, family or household purposes. 
Consumers just go to the local store or neighborhood mall to buy a home 
computer or the latest software package. They expect their new purchase 
to work. What if it does not, due to a Y2K problem?
  Then the average consumer should be able to use his or her home 
state's consumer protection laws to get a refund, replacement part or 
other justice. But not under this bill.
  The conference report also greatly expands the jurisdiction of the 
federal courts to consider Y2K cases under its class action 
provisions--now throwing Y2K cases into Federal court if a plaintiff 
seeks an award of punitive damages. Again, this expansion of the 
Senate-passed bill is unjustified.
  It could be legal malpractice for an attorney not to seek punitive 
damages at the beginning of a case, when the complaint is filed and 
before discovery of all the facts has commenced. This provision makes 
no sense and may cause great harm.
  Chief Justice Rehnquist and the Judicial Conference soundly rejected 
this approach months ago. The Judicial Conference found that shifting 
Y2K cases from state courts ``holds the potential for overwhelming the 
federal courts, resulting in substantial costs and delays.'' I wonder 
who pays for that. I bet it is us.
  In addition, the Judicial Conference concluded ``the proposed Y2K 
amendments are inconsistent with the objective of preserving the 
federal courts as tribunals of limited jurisdiction.''
  These views are shared by the state court judges, as reflected in the 
position of the Conference of Chief Justices. They note that these Y2K 
bills ``pose a direct challenge to the principles of federalism 
underlying our system of government.'' They describe these bills as 
``radically'' altering the complementary role of the state and federal 
courts. The Chief Justices of our state courts remind us: ``The 
founding fathers created our federal system for a reason that Congress 
should be extremely reticent to overturn.''
  I thought the Administration had also rejected this approach.
  Mr. President, I suspect that the sweeping federal procedural and 
substantive changes to state law in this conference report will not 
pass constitutional muster when challenged. The conference report does 
not create a federal cause of action for Y2K lawsuits. Instead, the 
bill forces federal rules and liability protections on state-based 
claims and procedures. This will result in the dismissal of claims that 
might otherwise succeed under state law and clearly usurps the ability 
of state legislatures to make and enforce the laws for their citizens.
  The conference report is an arrogant dismissal of the basic 
constitutional principle of federalism. Given the Supreme Court's 
recent rulings on the power of the States in relation to the Congress 
under our Constitution, I predict the Supreme Court will strike down 
this new law as unconstitutional.
  We in Congress should not be tramping on the rights of the States to 
set the legal procedures for their courts and define the legal rights 
for their citizens.
  On May 1, 1999, Assistant Attorney General Eleanor Acheson outlined 
the Department of Justice's views on this legislation. The Department 
of Justice concluded that: ``Because the McCain-Wyden-Dodd proposal 
modifies tort and contract law so as to reduce the liability of 
potential Y2K defendants, it reduces the incentive for potential 
defendants to avert Y2K failures. In a similar fashion, we do not 
believe that modifying the rules of liability that apply to meritorious 
tort and contract actions will deter frivolous Y2K claims, which by 
definition will be filed regardless of the rules of liability. Instead, 
the modification in the McCain-Wyden-Dodd bill seem more likely to 
curtail legitimate Y2K lawsuits.''
  I agreed with the Department of Justice on May 1, 1999, when this 
letter

[[Page S8021]]

was written, and I agree with this letter today. Mr. President, I ask 
unanimous consent that the full text of the Department of Justice's 
views as of May 1, 1999, be printed in the Record at the conclusion of 
my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. LEAHY. This conference report is telling the business community: 
Don't worry, be happy when it comes to Y2K remediation; don't worry 
about fixing the problem, don't worry about trying to protect the 
consumers, because the Senate and the House are going to protect you; 
all you have to worry about is yourself, not those who buy your 
products.
  If they take that attitude using this bill as a shield, it only makes 
Y2K computer problems worse next year instead of fixing them this year. 
The best defense against any Y2K lawsuit is to be Y2K compliant in 
1999, not waiting for a problem to happen and in the year 2000 say: Oh, 
wait a minute, they took care of us in the Congress; too bad, we're 
home free.
  That is why I hosted a Y2K conference in Vermont to help small 
businesses prepare for 2000. That is why I taped a Y2K public service 
announcement in my home state. That is why I cosponsored Senator Bond 
and Senator Kerry's new law, the ``Small Business Year 2000 Readiness 
Act,'' to create SBA loans for small businesses to eliminate their Y2K 
computer problems now. That is why I introduced, with Senator Dodd as 
the lead cosponsor, the ``Small Business Y2K Compliance Act,'' S. 962, 
to offer new tax incentives for purchasing Y2K compliant hardware and 
software.
  These real measures will avoid future Y2K lawsuits by encouraging Y2K 
compliance now.
  Last year, I joined with Senator Hatch to pass into law a consensus 
bill known as ``The Year 2000 Information and Readiness Disclosure 
Act.'' We worked on a bipartisan basis with Senator Bennett, Senator 
Dodd, the Administration, industry representatives and others to reach 
agreement on a bill to facilitate information sharing to encourage Y2K 
compliance.
  The new law, enacted less than nine months ago, is working to 
encourage companies to work together and share Y2K solutions and test 
results. It promotes company-to-company information sharing while not 
limiting rights of consumers. That is the model we should use to enact 
balanced and narrow legislation to deter frivolous Y2K litigation while 
encouraging responsible Y2K compliance.
  Unlike last year's Y2K information sharing law, this conference 
report is not narrow or balanced. Instead it is an justified wish list 
for special interests that are or might become involved in Y2K 
litigation.
  The coming of the millennium should not be an excuse for cutting off 
the rights of those who will be harmed. It should not be an excuse for 
turning our States' civil justice system upside down. It should not be 
an excuse for immunizing those who recklessly disregard the coming 
problem to the detriment of American consumers.

                               Exhibit 1

                                       U.S. Department of Justice,


                                 Office of Policy Development,

                                      Washington, DC, May 1, 1999.
     Hon. Albert Gore, Jr.,
     President, U.S. Senate,
     Washington, DC.
       Dear Mr. President: I am writing to clarify the Justice 
     Department's views on the McCain-Wyden bill, S. 96, as 
     amended by Senator Dodd's April 28 proposal. We appreciate 
     the efforts of Senator Dodd to improve S. 96. Nevertheless, 
     Senator Dodd's amendments do not cure many of the defects 
     that prompted the Department to oppose S. 96, and the 
     Department continues to oppose the bill, even with Senator 
     Dodd's amendments. The Department, however, understands that 
     Senators Kerry and Robb are working on an amendment in the 
     nature of a substitute that addresses our primary concerns 
     and which we can support.
       The Administration has, all along, advocated Y2K 
     legislation as long is it serves three important goals: (i) 
     giving companies every incentive to become Y2K compliant; 
     (ii) encouraging resolution of Y2K problems without resort to 
     litigation; and (iii) deterring frivolous Y2K lawsuits 
     without deterring legitimate Y2K claims. We are convinced, 
     however, that the McCain-Wyden-Dodd bill does not achieve 
     these goals. In fact, that bill may significantly undermine 
     two of them. Because the McCain-Wyden-Dodd proposal modifies 
     tort and contract law so as to reduce the liability of 
     potential Y2K defendants, it reduces the incentive for 
     potential defendants to avert Y2K failures. In a similar 
     fashion, we do not believe that modifying the rules of 
     liability that apply to meritorious tort and contract actions 
     will deter frivolous Y2K claims, which by definition will be 
     filed regardless of the rules of liability. Instead, the 
     modifications in this McCain-Wyden-Dodd bill seem more likely 
     to curtail legitimate Y2K lawsuits.
       I will now outline briefly some of the Department's major 
     concerns with the McCain-Wyden-Dodd version of S. 96.


                            coverage issues

       The McCain-Wyden-Dodd proposal would apply to Y2K lawsuits 
     brought by consumers and to private securities actions. 
     McCain-Wyden-Dodd contains a number of provisions that make 
     it more difficult for plaintiffs to assert and recover on 
     their Y2K claims--they must provide more extensive notice to 
     all defendants, satisfy higher pleading requirements, and may 
     even then be denied their economic losses and punitive 
     damages. Although these restrictions may be appropriate as 
     applied to businesses with greater financial and other 
     resources, imposing these heavier burdens is likely to erect 
     insuperable obstacles for plaintiffs who are consumers.
       The McCain-Wyden-Dodd proposal also applies to private 
     securities actions, even though such actions are already 
     governed by the comprehensive provisions of the Private 
     Securities Litigation Reform Act of 1995 and the Securities 
     Litigation Uniform Standards Act of 1998. Considerable time 
     and effort was spent in designing those two laws as a means 
     of barring meritless claims but allowing the filing of 
     legitimate claims. In the absence of any evidence that this 
     legislation was ineffective at achieving these purposes, 
     there would appear to be no need to upset the careful balance 
     it achieved by applying the sweeping reforms of McCain-Wyden-
     Dodd to litigation already covered by that prior legislation.


                        class action provisions

       The McCain-Wyden-Dodd proposal creates federal jurisdiction 
     over any Y2K class action where more than one million dollars 
     is at issue. With this low threshold, this proposal allows 
     most Y2K class actions brought in state court, even those 
     based solely on state law, to be moved to federal court, 
     where they would be analyzed under federal standards. Class 
     action claims that could have been brought under state law 
     would have to be dismissed unless they also satisfy those 
     federal standards. Not only would this result in the 
     dismissal of claims that might have succeeded under state 
     law, but it would also usurp the ability of state 
     legislatures to define the relief available to their 
     citizens.


        provisions modifying state tort law affecting y2k claims

       The McCain-Wyden-Dodd proposal substantially rewrites state 
     tort law as applied to Y2K claims. Section 13, for example, 
     freezes in time many aspects of the state law governing 
     resolution of Y2K tort claims as it existed on January 1, 
     1999, thereby preventing the States from enacting any reforms 
     to their tort law, even reforms that apply generally to all 
     tort claims. Other sections of McCain-Wyden-Dodd 
     significantly curtail the damages Y2K plaintiffs may recover 
     for their injuries. Most dramatically, section 12 bars 
     recovery of economic losses in all tort suits not involving 
     personal injury or property damage, including fraud and 
     misrepresentation suits where the only damages are economic 
     losses. This is not simply a codification of existing state 
     law rules; section 12 establishes a new--and much broader--
     restriction for the recovery of these damages. Finally, 
     section 5 of McCain-Wyden-Dodd usurps state law regarding 
     recovery of damages with a rule of proportionate liability 
     for all Y2K defendants, no matter how much they might have 
     contributed to the plaintiff's injuries.
       Because of the concerns I have outlined, the Department 
     remains opposed to S. 96, even as modified by Senator Dodd's 
     proposed amendments.
       The Office of Management and Budget has advised us that 
     from the perspective of the Administration's program, there 
     is no objection to the submission of this letter.
           Sincerely,

                                           Eleanor D. Acheson,

                                       Assistant Attorney General,
                                       U.S. Department of Justice.

  The PRESIDING OFFICER. Who yields time?
  The Senator from South Carolina.
  Mr. HOLLINGS. Mr. President, I yield sufficient time as may be 
necessary under the time I am allotted under the agreement.
  Mr. President, a notable author once stated that ``decades 
surrounding a new millennium are periods of severe disruptions and 
cultural transformations.'' In the context of American politics, it 
appears that this prophecy is coming to fruition even before the 21st 
century officially arrives.
  From the manner in which this legislation has been considered, and 
unfortunately, from its ultimate passage, it appears that this country 
is embarking upon a serious transformation of America's 
constitutionalism.
  For 200 years, we have honored a system of federalism that recognized 
the appropriate balance between States

[[Page S8022]]

and the Federal Government concerning the administration of civil law. 
Civil disputes unrelated to constitutional claims were considered to be 
reserved to the states and local citizens. But this cherished notion of 
states' rights no longer seems to be the case. Now, upon the idea of 
promoting industrialism, and more specifically, the so-called growth of 
technology, it appears that federalism, as well as the constitutional 
rights of American citizens, are becoming not only dishonored, but for 
sale to the highest bidder.
  There are some who will support this legislation today upon the 
grounds that this is a bill limited in scope. Nothing could be further 
from the truth. This legislation includes some of the broadest 
limitations ever imposed on consumers' civil remedies, including severe 
restrictions on the recovery of economic losses and the ability to 
pursue class action suits.
  The majority's claims about the recovery of economic losses greatly 
exceed the degree to which economic losses will be recoverable under 
the bill. In reality, the legislation will forbid the recovery of 
economic losses in almost every situation.
  The conference majority contends that the class action provision has 
been made more pro-plaintiff because of the change made to the monetary 
requirement--from $1 million to $10 million--and the change made to the 
class size requirement, which is now 100 members. However, the 
conference majority failed to highlight the decision by the conference 
committee to add a provision that allows any class action suit to be 
removed to federal court in the event the suit includes a claim for 
punitive damages. The addition of this provision has expanded the 
federalization of class actions suits well beyond the provision in the 
original bill.
  The conference report states that my provision on consumer credit 
protection has been revised to reflect the true intent of the 
provision, which was to prevent consumers from losing their mortgages 
because of Y2K failures. However, the purpose of the provision was not 
to singularly protect mortgages, but to protect consumers against 
adverse actions in relation to all debt-related transactions, including 
automobile loans and credit card obligations.
  I know that many of my colleagues on this side of the aisle will vote 
for final passage because of the President's decision to sign this 
bill. I am most disappointed in the President's decision. When the 
President announced and carried out his veto of the products liability 
bill three years ago, I applauded. He states then that there was no 
justification for broad restrictions on punitive damages, joint and 
several liability, and broad preemption of State law. He reiterated 
those concerns in several statements on this bill. Yet, he announces 
his intention to sign the bill. In fact, his staff says he'll sign the 
legislation, even though it doesn't reflect the actual agreement 
between the White House and conference members.
  I assure my colleagues that if we remain on this course, the 
constitutional and moral soul of this Nation will soon perish. This 
ideology of short term gain, and success at all costs, will surely work 
to our detriment. Consideration of this bill reminds me of a quote by 
Horace Rumpole, when he said:

       We went to all that trouble with King John to get trial by 
     our peers, and now a lot of lawyers with the minds of 
     business consultants want to abolish juries.

  Mr. President, when I hear the expression by my distinguished 
chairman about a victory for the Nation and such nonsense from the 
distinguished Senator from Oregon about the consumers not getting the 
shaft--that is exactly what they are getting. That is exactly what is 
happening.
  We tried our best to protect the consumers. You name the consumer 
organization in America--Public Citizen, Consumers Union--they are all 
still opposed to this conference report.
  I stand here with a letter which the American Bar Association 
recently wrote:

       The American Bar Association opposes enactment of H.R. 775 
     in either the form that passed the Senate on June 15, 1999 or 
     the form that passed the House of Representatives on May 12, 
     1999. . .The American Bar Association believes that the 
     rights of the States should not be trampled in the rush to 
     enact legislation to address concerns about Y2K. 
     Traditionally, legal principles governing both tort and 
     contract action have been the province of the States, not the 
     Federal Government. The legal issues likely to be presented 
     by the Year 2000 problem are not unique.

  I ask unanimous consent the letter from the American Bar Association 
be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                         American Bar Association,


                                  Governmental Affairs Office,

                                    Washington, DC, June 22, 1999.
     Hon. Trent Lott,
     U.S. Senate,
     Majority Leader of the Senate,
     Washington, DC.
       Dear Mr. Majority Leader: We understand that the 
     Administration and key members of Congress are continuing to 
     try to resolve differences with respect to H.R. 775, Y2K 
     liability legislation. Last Friday, the ABA's Board of 
     Governors met in Boston and adopted policy regarding the 
     pending legislation. I am writing to you to express the 
     American Bar Association's views on this legislation.
       The American Bar Association opposes enactment of H.R. 775 
     in either the form that passed the Senate on June 15, 1999, 
     or the form that passed the House of Representatives on May 
     12, 1999. The ABA is supportive of efforts to impose a 
     reasonable waiting period before a lawsuit could be brought 
     and encouraging potential litigants to utilize alternative 
     dispute resolution methods during this period. The ABA is 
     also supportive of encouraging the disclosure of known Y2K 
     defects and of encouraging businesses, with appropriate 
     antitrust relief, to cooperate in the development and 
     implementation of remediation of Y2K defects. However, the 
     ABA strongly opposes provisions in the versions of the 
     legislation that passed both in the House and in the Senate 
     that would: (1) provide for federal standards regarding the 
     award of punitive damages; (2) limit the extent of 
     defendants' liability to their proportional share of damages; 
     (3) limit the liability of officers and directors in Y2K 
     proceedings; (4) allow for removal of almost all Y2K class 
     actions to federal court; and (5) preempt the state laws to 
     place a federal cap on punitive damages. The ABA also opposes 
     the fee-shifting provisions of section 508 of H.R. 775, as 
     passed by the House.
       The ABA believes that the rights of the states should not 
     be trampled in the rush to enact legislation to address 
     concerns about Y2K. Traditionally, legal principles governing 
     both tort and contract actions have been the province of the 
     states, not the federal government. The legal issues likely 
     to be presented by the Year 2000 problem are not unique. 
     Except for some regulatory action undertaken by federal 
     and state agencies, there is little in the nature of 
     special Y2K law. Disputes arising from Year 2000 computer 
     failures likely will involve garden-variety claims of 
     misrepresentation, fraud, breach of contract, insurance 
     coverage and the like. There is no reason to believe that 
     the legal standards and procedures applicable to non-Y2K-
     related tort, contract and class action claims are not 
     appropriate for resolution of lawsuits involving the Year 
     2000 issue.
       The ABA believes that it is doubtful that H.R. 775, as 
     passed by either House, would encourage more or better Year 
     2000 remediation, or more or better disclosure about Year 
     2000 readiness. In fact, we believe that the opposite result 
     is the more likely. Many businesses are inspired to undertake 
     their Year 2000 remediation projects with a higher degree of 
     diligence precisely because of potential legal liability. 
     Legislation changing the standards of liability breeds 
     uncertainty, and prudent business people frequently opt not 
     to spend money in the face of uncertain returns. Where the 
     relevant law of the jurisdictions in which businesses now 
     operate is fairly certain, any new federal law will only 
     muddy the waters. In light of the almost certain 
     constitutional challenges and the necessity of litigation to 
     interpret a new law in the various states, the efficacy of 
     any new legislation will also be minimal at best.
       From the perspective of directors and officers insurance 
     issues, a Y2K safe harbor could put the directors and 
     officers in a Catch-22 situation. Year 2000 compliance is 
     expensive. Compliance obligations must be weighed, like any 
     other business decision, against the costs and the 
     liabilities of non-compliance. If the penalties associated 
     with Year 2000 are removed, it is plausible the directors' 
     and officers' decision-making pendulum would swing the other 
     way--toward maximizing corporate short term profits.
       Moreover, proposed legislation has the potential to 
     penalize organizations that have been the most diligent in 
     their Year 2000 preparations. Many companies have spent 
     millions of dollars in this endeavor. More significantly, 
     many started early, and have virtually completed their 
     projects, performing innumerable tests and drills. Some are 
     helping their customers and other members of the business 
     community by sharing the knowledge they have learned. These 
     efforts should be encouraged. However, by raising the bar for 
     bringing and sustaining legal action, Congress may be 
     penalizing those companies who through their own foresight 
     spent their resources to adequately

[[Page S8023]]

     deal with Year 2000 issues. Those who choose not to spend 
     sufficient resources could have a competitive advantage. In 
     short, whatever benefits the proposed legislation may have 
     are likely to be too little, too late and to reward the wrong 
     people.
       The fee-shifting provisions of Section 508 of H.R. 775, as 
     passed the House, would preempt federal, state and local 
     statutes and court rules to apply a modified ``losers pay'' 
     or fee-shifting court rule with respect to any Year 2000 
     claim for money or property. They would require that if 
     either side rejected a settlement offer prior to trial and 
     did less well at trial than the offer, that party would be 
     responsible for the attorney's fees and costs of the other 
     party from the date on which the last offer was made by the 
     adverse party.
       Section 508 would force parties either to accept a 
     settlement offer or run the risk of incurring the fees of the 
     other side. This would encourage ``low-ball'' settlement 
     offers by the defendant rather than a realistic appraisal of 
     the value of the case. Only the wealthy claimant would be 
     able to run the risk of incurring such fees; in particular, 
     the middle-class claimant who has some assets to lose would 
     be in the greatest jeopardy. In a clear case of liability, 
     the advantage might be partially alleviated by a counter 
     offer or demand. But in all cases, the risk of litigation 
     would be greater for someone who believes their claim or 
     defense is just.
       The American Bar Association does not endorse court rules 
     or statutes that provide for fee-shifting based upon 
     rejection of settlement offers. Such proposals would deter 
     those who lack the financial wherewithal to absorb not only 
     their own legal fees but also those of their adversaries from 
     filing meritorious claims or defending meritorious positions. 
     They favor the litigant with financial muscle, provide a 
     disincentive to all claimants with limited financial means 
     and encourage settlement by gamesmanship rather than 
     encouraging realistic appraisals. Ultimately they erode our 
     country's concept of equal justice under the law.
       Although the ABA does not support court rules or statutes 
     that provide for fee-shifting based on rejection of 
     settlement offers, it adopted policy in February 1996 
     suggesting that if such a statute or rule is being 
     contemplated, certain safeguards outlined in an ``offer of 
     judgment procedure'' be incorporated in such a statute or 
     rule. We would be happy to provide you with a copy of this 
     offer of judgment procedure should you wish to review it and 
     to answer any questions you may have about the ABA policy on 
     this matter.
       Please let me know if I can provide you with additional 
     information or otherwise be of assistance to you on this 
     matter.
           Sincerely,
                                                  Robert D. Evans.

  Mr. HOLLINGS. No Governor, no Attorney General, no State legal group 
supports this legislation. On the contrary, there is a letter here from 
the Conference of Chief Justices of the several States in opposition to 
this measure.
  I ask unanimous consent to have that printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

         Conference of Chief Justices, Office of Government 
           Relations, National Center for State Courts,
                                      Arlington, VA, May 25, 1999.
     Hon. Tom Daschle,
     Minority Leader, U.S. Senate, Hart Senate Office Building, 
         Washington, DC.
       Dear Senator Daschle: I am writing on behalf of the 
     Conference of Chief Justices (CCJ), to express our concern 
     with S. 96 and H.R. 775 in their present form. We understand 
     that S. 96 and H.R. 775 are attempts to address the serious 
     problem of potential litigation surrounding the Y2K issue. 
     However, in part, the bills pose a direct challenge to the 
     principles of federalism underlying our system of government. 
     We are particularly concerned that each bill would in effect 
     replace established state class action procedures in favor of 
     removal to the Federal courts on most cases. The members of 
     CCJ seriously question the wisdom of such an action.
       In this regard, CCJ agrees with the position of the U.S. 
     Judicial Conference as submitted by Judge Walter Stapleton to 
     the House Judiciary Committee on April 13, 1999. His 
     testimony points out that:
       ``State legislatures and other rule-making bodies provide 
     rules for aggregation of state-law claims into class-wide 
     litigation in order to achieve certain litigation economies 
     of scale. By providing for class treatment, state 
     policymakers express the view that the state's own resources 
     can be best deployed not through repetitive and potentially 
     duplicative individual litigation, but through some form of 
     class treatment. H.R. 775 could deprive the state courts of 
     the power to hear much of this class litigation and might 
     well create incentives for plaintiffs who prefer a state 
     forum to bring a series of individual claims. Such individual 
     litigation might place a greater burden on the state courts 
     and thwart the states' policies of more efficient 
     disposition.
       Federal jurisdiction over class litigation is an area where 
     change should be approached with caution and careful 
     consideration of the underlying relationship between state 
     and federal courts.''
       We would emphasize that State courts presently handle 95 
     percent of the nation's judicial business. State and Federal 
     courts have developed a complementary role in regard to our 
     jurisprudence and these bills would radically alter this 
     relationship. It is not enough to argue these bills affect 
     only a segment of commerce, or that resolution of the problem 
     on a state by state basis is inconvenient. It is a bad 
     precedent that could have future ramifications. The founding 
     fathers created our federal system for a reason that Congress 
     should be extremely reticent to overturn.
       If you have any questions, please feel free to contact me 
     directly, or contact Tom Henderson or Ed O'Connell who staff 
     our Government Relations Office. They can be reached at (703) 
     841-0200.
           Respectfully,

                                               David A. Brock,

                                                    Chief Justice,
                          President, Conference of Chief Justices.

  Mr. HOLLINGS. Certainly everybody wants money. I want money. You want 
money. Republicans want money. Democrats want money. The White House is 
going crazy after money. Heavens above, everybody knows everybody wants 
money.
  If you think this is just a spurious comment, let's go back. Here it 
is: ``GOP Vies for Backing of High-Tech Leaders. Party Aims to Exploit 
Y2K Vote. . .''
  That is from the Washington Post, dated June 13. I ask unanimous 
consent to have that printed in the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

 GOP Vies for Backing of High-Tech Leaders--Party Aims to Exploit Y2K 
                            Vote, CEO Summit

                         (By Thomas B. Edsall)

       Republicans will make an all-out bid to wrest the cash and 
     prestige of Silicon Valley from the Democratic Party this 
     week by capitalizing on a crucial Senate vote and a three-day 
     National Summit on High Technology, events that will have 
     high-tech executives lining the halls of Congress in 
     unprecedented numbers.
       The Senate vote on a measure to protect the high-tech 
     industry from Y2K computer damage suits and the gathering of 
     the industry's corporate elite at the summit sponsored by the 
     Republican-controlled Joint Economic Committee are designed 
     to demonstrate the commitment of the GOP to the unfettered 
     market forces so beloved by the chip makers, venture 
     capitalists and software CEOs of ``the new economy,'' and to 
     reveal pointedly to high-tech leaders the influence in the 
     Democratic Party of one of their most feared adversaries, the 
     trial lawyers.
       The trial bar has filed numerous securities suits against 
     the industry and its members are expected to unleash lawsuits 
     over the expected breakdown of computers that have not been 
     adjusted to deal with the date change on Jan. 1, 2000, 
     popularly known as the Y2K computer glitch.
       ``This is one of the few segments of the business community 
     that hasn't reflexively gone Republican,'' said Rob Atkinson, 
     director of the Technology and New Economy Project of the 
     Democratic Progressive Policy Institute. ``Now, the 
     Republicans have started to wake up and say, `We want the 
     high-tech community to be ours.' ''
       The high-tech industry is a significant source of political 
     money. The Center for Responsive Politics estimated that the 
     computer industry and its executives gave just under $9 
     million to congressional candidates in 1997-98, and early in 
     the presidential nomination fights, Vice President Gore has 
     raised an estimated $75,000 from the industry, slightly more 
     than the $67,000 raised by Texas Gov. George W. Bush.
       As, or perhaps more, important than the money, however, is 
     the partisan competition to be on the side of a driving force 
     in the national economy.
       Rep. Thomas M. Davis III (Va.), chairman of the National 
     Republican Congressional Committee and a leader of the GOP's 
     high-tech drive, contends that high-tech executives realize 
     that such ``vestiges of the old Democratic coalition'' as 
     organized labor and the trial lawyers ``will not allow them 
     [Democrats] to support high tech.''
       In fact, the legislative record of both parties and of the 
     Clinton administration on high-tech issues is mixed, with 
     each taking stands for and against positions supported by the 
     Information Technology Industry Council (ITIC), a group 
     praised by both sides of the aisle.
       In Congress, the GOP has a substantial advantage in its 
     ITIC ratings. In the House, computations based on the ITIC's 
     vote analysis showed Republicans receiving an average ranking 
     of 69.7 percent, compared with the Democrats' 49.1 percent. 
     The ratings were closer in the Senate: 83.9 percent for 
     Republicans, 71.1 percent for Democrats.
       The ratings were based on 1997-98 votes on securities 
     litigation reform, Internet taxes, temporary work visas for 
     skilled foreigners,

[[Page S8024]]

     ``fast-track'' trade proposals, computer export controls and 
     encryption legislation.
       Only votes on economic and regulatory issues were 
     considered. Votes on social issues such as abortion, school 
     prayer and pornography were excluded, since those have little 
     bearing on the industry's bottom line. The libertarian 
     tradition in the hightech community makes the religious right 
     and the antiabortion movement significant liabilities for the 
     Republican Party.
       Also, the development of sophisticated encryption and 
     faster computers has put the industry in direct conflict with 
     those seeking to restrict trade with potentially hostile 
     nations, and with law enforcement officials seeking wiretap 
     access to electronically transmitted information.
       And the demand for technology-sophisticated workers runs 
     head-on into anti-immigration forces in both parties.
       In terms of partisan competition, Democrats are 
     increasingly worried that the GOP's full-scale assault is 
     likely to weaken the Democratic advantages among libertarian 
     high-tech entrepreneurs.
       Some Democrats have been stunned by the impressive 
     collection of technology company executives who have joined a 
     72-member high-tech fund-raising committee for Bush. These 
     computer industry leaders include America Online's James L. 
     Barksdale, Cisco Systems' John Chambers, Intel's Gordon 
     Moore, LSI Logic's Wilfred J. Corrigan, Applied Materials' 
     James C. Morgan and Advance Mirco Devices' W.J. Sanders III.
       Democratic conflicts pitting plaintiffs' lawyers against 
     the technology sector will be thrust into the open when the 
     Senate votes this week on legislation limiting corporate 
     liability in Y2K damage suits, a measure backed strongly by 
     the high-tech industry but opposed by trial lawyers.
       That vote is expected to take place Tuesday, in the middle 
     of the Joint Economic Committee's three-day summit. The 
     sessions, put together by Republican Sens. Connie Mack (Fla.) 
     and Robert F. Bennett (Utah), will provide a public forum to 
     an extraordinary array of high-tech luminaries.
       On Monday, those scheduled to testify include IBM's Louis 
     V. Gerstner Jr., Intel's Craig R. Barrett and Federal Reserve 
     Chairman Alan Greenspan. Day two will feature Microsoft's 
     Bill Gates, Adobe Systems' John E. Warnock and Novell's Eric 
     Schmidt. Wednesday will be the turn of Sun Microsystems' 
     Scott McNealy, America Online chief technology officer Marc 
     Andreessen and eBay's Meg Whitman.
       Democrats are worried about the timing of the hearings and 
     the Y2K vote, said Lisa Quigly, chief of staff of Rep. Calvin 
     M. Dooley (Calif.), co-chairman of the New Democrat 
     Coalition, which has strong ties to the technology sector.
       ``We are miles ahead of them [Republicans]; they don't have 
     the relationships at all,'' Quigly said, but ``because some 
     [Democrats] are not supporting Y2K [liability legislation], 
     it looks as if Democrats are not for high tech.''
       Democrats have made what they hope will be a preemptive 
     strike that will take the edge off the Republican challenge.
       Last week, House Minority Leader Richard A. Gephardt (D-
     Mo.), who has not had strong ties with the high-tech 
     community, appointed a high-tech advisory committee headed by 
     two Californians whose districts are centers of high-tech 
     entrepreneurial activity: Reps. Zoe Lofgren and Anna G. 
     Eshoo.
       The Gephardt announcement coincided with a New Democrat 
     Network-sponsored ``technology outreach'' day, which featured 
     sessions with Microsoft senior vice president Craig Mundie, 
     venture capitalist John Doerr, Dell Computer's Michael Dell 
     and Hewlett Packard's Lewis E. Platt.
       In what may prove to be a faint hope, Simon Rosenberg, 
     executive director of the New Democrat Network, said that 
     high-tech leaders are going to see the GOP drive this week as 
     ``a very overt and clumsy attempt to catch up on high tech. 
     But this challenge of which party is going to be the one that 
     most adapts to the new realities and the new challenge is 
     going to be with us for a long time.''

  Mr. HOLLINGS. Here is the same: ``Congress Chasing Campaign Donors 
Early and Often'' about Y2K. That is from the New York Times, dated 
June 14. I ask unanimous consent to have that article printed in the 
Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

                [From the New York Times, June 14, 1999]

            Congress Chasing Campaign Donors Early and Often

                          (By Alison Mitchell)

       Washington, June 13--As campaign finance legislation 
     languishes, Congress has gone on an allout funding-raising 
     binge driven by the battle for control of the House, 
     competition for money with the Presidential campaigns and an 
     early push by incumbents to scare off challengers.
       In a sign of just how intense the money chase has become, 
     all four Senate and House campaign committees have, for the 
     first time, created their own special programs to court and 
     cater to donors willing to give them $100,000 in each of the 
     two years of the 2000 campaign cycle.
       Unabashed by the debate over President Clinton's use of the 
     White House to court deep-pocketed donors in 1996, the 
     committees are offering generous contributors an array of 
     incentives, like access to party leaders, special issue 
     briefings and meetings in lush locales.
       In the case of the Democratic Congressional Campaign 
     Committee, which is led this year by Representative Patrick 
     J. Kennedy of Rhode Island, that even includes a weekend at 
     the Kennedy family compound in Hyannisport, Mass., as close 
     as it gets to a Democratic shrine.
       ``If we're going to raise more money,'' said Edward M. 
     Kennedy of Massachusetts, ``we're going to have to do it in 
     bigger chunks.''
       The creation of the groups is a sign of how the 2000 battle 
     for Congress is causing an escalation in the pursuit of so-
     called soft money, the kind of unrestricted contributions 
     from wealthy individuals, corporations and labor unions that 
     the parties have used to get around the post-Watergate 
     contribution limits.
       By law, an individual can give only $20,000 a year to the 
     party committees to use for the direct purpose of electing a 
     Federal candidate. So the bulk of these $100,000 donations 
     would be considered of soft money, which can be used for 
     activities like party building or advertisements advocating 
     issues.
       Once such money was largely the purview of the national 
     political parties, not their Congressional arms. But last 
     year the Congressional committees became more aggressive in 
     pursuit of the money, and these programs show that they are 
     now going even further. Previously the big-donor programs on 
     Capitol Hill were tailored for the $15,000 and $25,000 
     contributor. (The Republicans had a $100,000 ``Majority '98'' 
     program for the House and Senate elections last year, but 
     divided the proceeds among several party committees.)
       For those trying to stanch the flow of money into politics, 
     these are bad omens.
       ``You've ended up with an absolutely `anything goes' 
     attitude,'' said Fred Wertheimer, an advocate of legislation, 
     now stalled, that would ban soft-money contributions. He 
     called the $100,000 groups a ``qualitative expansion of soft 
     money.''
       Representative Thomas M. Davis 3d of Virginia, the chairman 
     of the National Republican Congressional Committee, says the 
     Democrats are hypocrites for raising such donations because 
     they have rallied around the bill to ban them while 
     Republican leaders have firmly opposed it. ``The difference 
     is they profess to oppose soft money,'' Mr. Davis said.
       The Democrats say the will not disarm until the law 
     changes.
       ``All of us are hoping for campaign finance reform, but we 
     are also preparing for the worst'' said Senator Robert G. 
     Torricelli of New Jersey, who as chairman of the Democratic 
     Senatorial Campaign Committee is in charge of fund-raising 
     and recruiting candidates.
       The fund-raising flurry is driven in large part by an 
     unusual political season in which not just the White House 
     but the House could change hands. A few even argue that 
     control of the Senate could be in play.
       ``It's impossible to predict which party will control which 
     institution,'' Mr. Torricelli said.
       The House and Senate committees are also pushing to raise 
     money before they have to go into head-on competition with 
     the Presidential race. And they want to show the kind of 
     high-dollar strength that gives an air of victory and draws 
     more donors. The committees are just as zealous in pursuit of 
     the traditional donations for Federal campaigns as they are 
     in seeking soft money.
       ``The stakes are high, whatever the outcome,'' said Gary J. 
     Andres, a lobbyist who is working closely with the National 
     Republican Congressional Committee to advise endangered 
     Republicans and help them raise money. ``So I think you're 
     going to see an expanded effort on both sides of the aisle.''
       The fund-raising is particularly aggressive in the House, 
     where a shift of just six seats in the next election could 
     return the Democrats to the majority. Congressional leaders 
     say the narrowness of the Republican majority is not only 
     attracting more money for each party, it is causing some 
     donors and interests to give to both.
       It's a funny dynamic,'' Mr. Davis said. ``You have some 
     people scared to death the Democrats will take the House and 
     they will give you more. And there are groups that will hedge 
     their bets. If they didn't think the Democrats had a chance 
     they would probably just give to us.''
       House Democrats are bluntly telling lobbyists and corporate 
     interests with offices along K Street here that they had best 
     take out some insurance should the Democrats take back the 
     House.
       Representative Kennedy said that Democrats in this cycle 
     would be ``expecting much more from those who haven't 
     traditionally been supporters of us but have been giving 
     large contributions to our opponents and can't be expected to 
     not at least meet us halfway.'' He said, ``They need to 
     balance out the sheets a little bit.''
       Through the first quarter of 1999, the House Democrats' 
     campaign committee took in a record $6.8 million. By the end 
     of this month, Democratic officials say they might reach 
     about $14 million--what it took House Democrats the entire 
     year to raise in 1997, the last comparable nonelection year. 
     In three separate events last week, President Clinton, Vice 
     President Al Gore and Hillary Rodham Clinton all appeared at 
     fund-raisers for House Democrats.
       The House Republicans' campaign committee will be posting 
     its first contribution

[[Page S8025]]

     figures at the end of this month. But the Republicans say 
     they beat the Democrats in the first quarter in traditional 
     donations by 2 to 1, raising over $7 million, and also topped 
     the Democrats in soft money. On June 23, Republicans expect 
     to raise more than $7 million at a gala for both the House 
     and Senate.
       The Republicans traditionally bring in far more money than 
     the Democrats.
       The fund-raising drive is equally intense for individual 
     candidates. Particularly in the House, any incumbent who 
     could face a competitive race in 2000 is working overtime to 
     raise as much money as possible by June 30, the next filing 
     deadline for the Federal Election Commission. Almost every 
     night there is at least one fund-raiser somewhere in the 
     vicinity of Capitol Hill.
       The election commission reports are used by political 
     strategists and donors to judge the potential strength of 
     candidates. And in many cases the size of these bank accounts 
     can draw in more donors--or scare them away from a 
     competitor, helping determine whether a strong challenger 
     should jump into a race.
       House Republicans are pushing incumbents who already face 
     significant challengers or who drew less than 55 percent of 
     the vote in 1998. The goal is to try to have $200,000 in each 
     of their campaign accounts by the end of the month.
       Mr. Davis of Virginia says he knows the importance of the 
     June 30 filing deadline. When he was trying to decide whether 
     to challenge the incumbent Democrat, Leslie Byrne, in 1994, 
     he looked at her campaign bank account. ``She had only 25 
     grand in the bank and I said, `Maybe I can do this,' '' he 
     said. ``If she had had $250,000 in the bank, I guarantee I 
     wouldn't have run.''
       House Democrats are trying to make sure that all their 
     freshmen in seats that may not be safe have about $150,000 in 
     their accounts by the end of the month. ``It's a real focused 
     and intense effort,'' said David Plouffe, the executive 
     director of the Democratic Congressional Campaign Committee.
       In some cases the House Democrats say they have challengers 
     lined up and are helping them, too.
       Patrick Casey, who lost by a whisker to Representative 
     Donald L. Sherwood of Pennsylvania in one of the closest 
     House races of 1998, traveled to Washington last Wednesday 
     for a fund-raiser where Representative Richard A. Gephardt or 
     Missouri, the minority leader, helped him raise $50,000.
       Congressional leaders have also joined the sweepstakes. 
     Speaker J. Dennis Hastert, for example, is now spending 
     Mondays, Fridays and weekends raising money for House 
     members, hopscotching the country.
       He plans to take a four-day tour of California later this 
     month to try to raise $2 million at 16 events, most of it for 
     House candidates. His aides say he has raised $5 million this 
     year for candidates and the party.
       Mr. Gephardt, who would supplant Mr. Hastert as Speaker if 
     the Democrats were to win back the House majority, is also on 
     the circuit. Last week he helped raise money for Mr. Casey 
     and for Representative Carolyn McCarthy of Long Island, 
     attended a Rhode Island event with Mr. Gore and flew home to 
     Missouri to appear with Mrs. Clinton. He aides say that by 
     June 30, he will have raised $4 million.
       Representative Tom Delay of Texas, the majority whip, has 
     mobilized his entire whip organization of House members to 
     help the Republicans' 10 most vulnerable incumbents. In a 
     program he calls Romp, for Retain Our Majority Program, he 
     has asked these members to raise $3,000 each for each of the 
     10 incumbents.
       And all the House Republican leaders have helped raise 
     money for a new group called the Republican Majority Issues 
     Committee, which is trying to raise $25 million to get out 
     the conservative vote in critical Congressional districts.
       The Democrats have called for an investigation of the group 
     because it is not registered with the Federal Election 
     Commission as a campaign organization or disclosing its 
     donors.
       Karl Gallant, an ally of Mr. DeLay, who is forming the 
     group, said it was not required to register because it would 
     not be endorsing candidates. ``We are not giving money to 
     candidates,'' Mr. Gallant said. ``We are going to be an 
     independent committee that will educate voters on where 
     candidates stand on conservative issues.

  Mr. HOLLINGS. You think it is not timely on money? Here at 2 o'clock 
this afternoon an article was printed regarding Governor Bush. I guess 
have to be more respectful. He is liable to be President. It reads, 
Governor Bush--``At a breakfast this morning Bush gets big support from 
Silicon Valley.'' He got all the executives out there. He just pledges 
all these things, I am telling you right now, way better than the 
distinguished chairman. And the distinguished chairman is pretty good.
  I ask unanimous consent to have this printed in the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

               Bush Gets Big Support From Silicon Valley

               (By Alan Elsner, Political Correspondent)

       Palo Alto, CA (Reuters)--Republican presidential front-
     runner George W. Bush's money-raising juggernaut roared 
     through Silicon Valley Thursday, drawing support from a 
     stellar list of high-tech industry titans.
       Bush, the governor of Texas, has smashed all previous 
     records by raising more than $36.3 million in the first half 
     of the year. He began the second half with a fund-raising 
     breakfast that had been expected to bring in an additional 
     $300,000 but seemed likely to far exceed that estimate.
       ``This is not my first trip to this incredible land called 
     Silicon Valley. This is my first trip as president of the 
     United States,'' an elated Bush said, before quickly 
     correcting himself to say, ``As soon-to-be president of the 
     United States.''
       Among the executives there to greet him were Cisco Systems 
     chief executive John Chambers, Microsoft executive vice 
     president Robert Herbold, Oracle Corp. (Nasdaq: ORCL--news) 
     president and CEO Ray Alen, Intel Corp. (Nasdaq: INTC--news) 
     chairman Gordon Moore, eBay president and CEO Meg Whitman, 
     Hewlett Packard president Lew Platt and Charles Schwab, 
     chairman and CEO of the stockbroker company that bears his 
     name.
       It was a highly impressive turnout from a region that Vice 
     President Al Gore, who may be Bush's Democratic presidential 
     opponent in next year's election, has been courting for 
     years. But Bush had already raised more money from Silicon 
     Valley than Gore in the first three months of this year.
       Executives said they were attracted by Bush's program of 
     supporting innovation, breaking down trade barriers and 
     removing government regulation.
       ``The governor has strong support from the high-tech 
     industry that is driven by ingenuity, innovation and the free 
     enterprise system. It's great to have a candidate focused on 
     those fundamentals,'' said Herbold.
       Lane added: ``This industry needs support from government 
     to continue growing and the Republicans and Bush have been 
     more supportive of business aspects of building this 
     industry.''
       Bush, who leads the field for the Republican presidential 
     nomination by a wide margin and has a 10 to 20 percentage 
     point advantage over Gore in recent polls, said the 
     attendance of so many prominent executives at his fund-raiser 
     sent an important message that would be noted all across the 
     country.
       In his speech, Bush pledged to ``take the side of 
     innovation over litigation every single time'' and put 
     forward a number of general ideas of what he might do as 
     president.
       He said he would reduce the threat of massive litigation 
     arising from the Year 2000 computer bug known as Y2K. He gave 
     grudging praise to President Clinton, who this week struck a 
     compromise with Congress to limit liability awards.
       Bush has promised to fight for meaningful tort reform to 
     limit lawsuits against business, a favorite Republican theme. 
     He also proposed making the Internet a duty and tariff-free 
     zone worldwide and promised to combat theft of U.S. 
     intellectual property.
       Bush said he would loosen regulations limiting the export 
     of civilian computer technology while still protecting 
     militarily sensitive technology.
       He also proposed a permanent tax credit for research and 
     development. Currently, the credit, worth about $2.5 billion, 
     needs to be renewed annually by Congress.
       Bush's unprecedented fund-raising prowess has led some 
     commentators to predict the race for the Republican 
     presidential nomination is virtually over before it has 
     begun. Only publisher Steve Forbes, who can draw on a vast 
     personal fortune, will be able to come close to matching 
     Bush's financial resources.
       Of the other Republicans, Arizona Sen. John McCain has a 
     war chest of $6.1 million and the rest of the field is under 
     $3.5 million. Bush also outpaced Gore in fund raising by two-
     to-one.

  Mr. HOLLINGS. So the record is made with respect to money. 
Ordinarily, we have the rule--I want to be within the Senate rules of 
the dignity of the body. But we have to get to the reality. No one is 
asking for this except those in the money chase. And, yes, it is 
bipartisan. There isn't any question about that.
  But this is a shabby performance. It is a sad day in the history of 
the Senate. Now what really occurred when we went into that conference 
is that the House receded to the Senate except for a minor amendment. 
We voted on it. Then they started negotiating on the fix, so as to 
ensure everybody was on board. They knew they were going to get a bill. 
The Senator from Connecticut then made the call to the President after 
midnight. I thought the only person who could get the President after 
midnight was Monica.
  The White House sent five veto letters. Yet, the President plans to 
sign the bill, notwithstanding.
  How emblematic of this administration. We fought like tigers to get 
this economy going with the 1993 budget. We cut spending. We raised 
taxes. We did away with 300,000 Federal employees. We got the economy 
going even though we could not get a single vote on the other side.

[[Page S8026]]

  Then later, of course, the President joined the other side, went down 
and threw all of his friends in Congress overboard saying we taxed them 
too much. Then we had GATT. Then we had the NAFTA with Mexico, and he 
threw his labor friends overboard. Of course, that has been an 
abomination.
  You cannot get to reality. They said it was going to increase trade. 
We went from a $5 billion-plus to a $20 billion-minus deficit. That was 
going to pay the Mexican worker better. He is taking home 20 percent 
less pay. It was going to solve the immigration problem. It is worse. 
It was going to solve the drug problem. They have a narcodemocracy down 
there.
  But the President threw that crowd overboard. Now he throws overboard 
the consumers, middle America, after five veto messages on a much worse 
bill.
  The Senator from Vermont is right on target. There isn't any 
question, when they put out this sheet here--even from my side--in the 
policy committee meeting there at lunch: How the conference report 
improves on the Senate-passed bill proportionate liability, even though 
they rejected Senator Kerry's proposal to place the burden on the 
defendant. They put the burden on the plaintiff. Individual consumers 
supposedly are carved out of proportionate liability, that is if they 
are not part of a class.
  If by chance they are part of a class, their suit is automatically 
removable to federal court, in the event the claim seeks punitive 
damages. The President said he would never federalize class actions. 
They claim the bill preserves the authority of states to void 
contracts. But I can list a number of contracts that would be illegal 
under State law but would be enforceable under the conference-reported 
bill. So contracts which were entered into on a fraudulent or 
unconstitutional basis would still be enforced.
  I will never forget the distinguished Senator from North Carolina; he 
tried to instruct the Senator from Oregon on economic damages.
  I will give you the case. The client comes in. I am an old-time 
lawyer, and I represent clients. You have to tell them the truth. The 
poor client comes in and says: Hollings, I've got a $10,000 computer I 
bought last year, and now it's after January the first, and it has 
crashed. It is not Y2K compliant. They told me it was going to last for 
10 years. I want you to bring my case.
  I said: Wait a minute. They have to understand you have 90 days to 
wait around even though there is no duty to fix. The Senator from 
California, Mrs. Boxer, offered an amendment to require a free fix--
that was in response to the Senator from Oregon's lament about fix the 
problem, fix the problem, just fix the problem. Well, that is exactly 
what were attempting to do. We said: Let's get rid of the lawyers. We 
will fix the problem. Yet, they would not accept that in the conference 
report.
  So I say to the prospective client: In that 90 days nothing is going 
to happen. Then I have to investigate in great detail because on 
proportionate liability I do not want to find that the parquet from 
Hewlett-Packard was made in India and thus discover that I should have 
gone to New Delhi instead of Hartford to bring this case. I have to 
then file the pleadings. I have to thereupon get in with the 
interrogatories, attend all the discoveries because that is the 
billable-hour crowd.
  You do not have money for billable hours obviously. This is middle 
America. That is how they get their day in court. So I will attend the 
interrogatories. I will conduct the trial, and I will handle the 
appeal.
  By that time, you will owe me over $10,000. Now do you really want me 
to bring this case, considering you can't get any economic loss? I know 
you said you had to let two of your employees go because you could not 
pay them during all this time that it has been down. I know you have a 
loss of business. I know you have lost your reputation and everything 
else of that kind. But there is no economic loss.
  The distinguished Senator from North Carolina is the best in the 
business. He will elaborate on that particular point. But that, more or 
less, gets rid of the lawyers. There never has been anything really for 
Y2K cases for attorneys. But to come in here now and say it does that, 
it is just shocking that we have just done away with middle America. 
The civil justice system has been permanently damaged. The very system 
that supports our Democratic society and consumers. That is why I stand 
here, for the consumers of America, for middle America, for those who 
cannot employ a trial attorney.

  I go right to that White House and why they changed, because the best 
story that came out was in the New York Times. I think it is dated just 
yesterday, June 30. It has this statement in here, that the Vice 
President, as he begins his campaign for the Presidency, was eager to 
rid himself of the ``taint'' of financial support from trial lawyers.
  No. 1, try to get some money out of that trial lawyer crowd, hard 
money. It is limited to $1,000. Soft money, let's go to Silicon Valley. 
There is Bush. He is there this morning, the Governor. This is the soft 
money bill. That crowd, he has $36 million. He has more than Gore, the 
Vice President, the President, and Bill Bradley all put together. One 
fellow has it. He can get that money. They know where to get soft 
money.
  I can't get much hard money out of that trial lawyer crowd. I want 
more from them, I want them to know. I have publicly stated that on the 
floor. But they don't have soft money.
  But the ``taint'' is the one I take exception to, because I am proud 
to be associated with trial lawyers. They are in there, down in the 
pits, on the front lines protecting middle America. All I hear in this 
Congress is about middle America--taxes, taxes, taxes. How about 
rights, rights, rights? They don't have the money for billable hours.
  A crowd such as we have up here in this Washington group, all the 
lobbyists, I am glad they put that list--is that the billable hour list 
the distinguished chairman just handed in for the record?
  So with the billable hour list, sure, they are lazy. They don't try 
cases. They continue cases. They go to the golf course. The clock runs 
and they send the bills. But you have to produce if you are a trial 
lawyer or you don't get anything. You take on all the expenses.
  This is a system that has worked for over 200 years at the State 
level. All the State authorities now are opposed to this Federal 
adulteration, but they are talking about how they are looking out for 
consumers and a victory for America and those kind of things.
  I am particularly shocked at my Republican chairman who has led the 
fight on campaign finance reform. I worked with him. I have a bill in 
for a constitutional amendment to try to legalize, if you please, the 
1974 act before it was made unconstitutional by the Supreme Court of 
the United States. In one line: The Congress of the United States is 
hereby empowered to regulate or control spending in Federal elections. 
Once we do that, we go back to the 1974 act, do away with the soft 
money, everything on top of the table, and we are limited on the amount 
of money--we, candidate--we are limited on buying the office. But the 
money to buy the office is bad enough when the money goes so far as to 
buy the principle. That is a shocking thing to me. If there is such a 
thing as campaign finance reform, then in the name of campaign finance 
reform, kill this conference report, because this is an abortion. There 
isn't any question in my mind. It is way worse than we have ever had in 
any particular measure.
  I want to say one word about the software industry, because I have 
worked in the Congress over the years with that particular industry, 
but they are learning a bad lesson now. They are learning they can buy 
anything, because they can change around State law, just them.
  I have been up here, 32, now going on 33, years. We have never done 
this for any special group. Here they agree something could be fixed in 
90 days. That is the provision in the bill.
  We are giving them still--you have July, August, September, October, 
November, December, almost 6 months to still get it fixed, rather than 
90 days. But they come in and demand this, when they now really are 
trying to demand everything.
  Everybody ought to know that the Internet was started by the 
antigovernment crowd, free market, free market. After we developed the 
Internet in 1968, with Dopper, thereupon, there came, later on, in the 
middle of the 1980s, none other than the

[[Page S8027]]

best of the best, President Reagan. He gave a voluntary restraint 
agreement to the semiconductor industry because they were going broke. 
Intel had given up one of their particular display chips, if you 
remember. They were going out of business. They hung on, and we 
instituted Semi-Tech. When I went into the Intel plant in Dublin, 
Ireland, the manager there, Mr. Frank McCabe, said: Senator, we would 
have never had all of this if you hadn't put the $500 million in Semi-
Tech. That is government.
  They are all talking about pork, pork, pork. I want to emphasize the 
pork about which my distinguished colleague always talks. We gave them 
that particular pork, and now they have come to town and they want 
estate tax cuts. They want the capital gains tax cut. They want to do 
away with taxing the Internet. If you buy something on Main Street, 
America, you have to pay the sales tax. But if you buy it on the 
Internet, there is no tax. It is a free ride. Don't tax the Internet. 
And by the way, don't hold me liable. Let's legalize negligence. Let's 
legalize fraud, with this particular bill, and then just repeal the 
tort system.
  This is a sad day for the Senate to come here with this particular 
conference report and talk in terms of a victory for America. It is a 
real bad setback by the White House, the leadership--not on the House 
side, I can tell you that. We have struggled over this thing. I tried 
to hold it up as much as I could, but the die has been cast.
  I will retain at this particular point the remainder of my time.
  The PRESIDING OFFICER (Mr. Smith of Oregon). The Senator from 
Connecticut.
  Mr. DODD. Mr. President, I don't think I know where the Senator from 
South Carolina stands on this issue, having listened to his eloquence. 
I disagree with him about this bill, but he is a wonderful Member of 
the Senate and a good friend. I always enjoy being a witness to his 
eloquence here on the floor of the Senate, even when I may be the 
object of some of that eloquence, along with my capital city of 
Hartford, CT.
  Let me begin by saying I support this conference report. I commend 
the chairman of the committee, Senator McCain, for his fine work. There 
was a tremendous amount of pressure on him last week. There were some 
who wanted to get this done about a week ago, with the hope there would 
be a veto. I guess they may have seen some political mileage if the 
bill had been vetoed. That would have been a victory in the minds of 
some. He willingly allowed us to have the weekend and the following few 
days to try to work out differences.
  None of us knew whether we would succeed. Frankly, we weren't very 
optimistic we could work out the differences, given a lot of the 
rhetoric associated with this bill. The fact that we were able to spend 
some time at it and see if we couldn't find common ground, I appreciate 
very much. I know most of the Members of this body and others do, as 
well.
  I also want to commend my colleague from Oregon, Senator Wyden, who 
did a very fine job. We worked very closely on this to try to find some 
language and some provisions which would build broader support for this 
legislation. Also, I want to recognize the efforts of a number of our 
colleagues whose support was also instrumental in the successful 
completion of this conference report: Senator Gorton, Senator Hatch, 
Senator Feinstein, my colleague, Senator Lieberman, and Senator 
Bennett, with whom I serve on the special committee on the Y2K issue, 
which was established by the majority leader and the minority leader, 
Senators Lott and Daschle, about a year and a half ago, to look at the 
issue of the Y2K problem.
  We have had some 22 hearings in that committee, examining all aspects 
of our society--government, the private sector, nonprofits, hospitals, 
telecommunications, transportation, utilities, financial markets--to 
determine to what extent this computer bug may affect people in this 
country and elsewhere. I think I can say with some degree of certainty 
that we think, at this juncture, things should not be too bad. A lot of 
work has been done at all levels in our society, from local communities 
to the States and the national government, to try to fix this problem 
so it doesn't cause the kind of disruptions that many thought could 
occur. But I can't stand here today and tell you we can say with 
absolute certainty there won't be disruptions and problems. There will 
be some. We just hope they aren't going to be as significant as some 
have predicted.
  One of the areas we were asked to look at is the potential for 
widespread litigation, the rush to the courthouse. It is no great 
secret in this country that we have become tremendously litigious; we 
like suing each other. It has become a problem that has grown over the 
years. Anybody who has been around certainly knows the statistics and 
the numbers that tell of the rush to solve every problem by a lawsuit. 
Certainly, I will be the first to recognize, as a member of the legal 
profession, that without an active and vibrant legal profession, a lot 
of consumer rights would be lost in this country. You need that. It 
can't all be done by the Justice Department, the Securities and 
Exchange Commission, or other agencies at the federal, State and local 
level. You need a vibrant private bar. That is essential.
  But it also has to be one that is tempered. You have to recognize 
certain fact situations as they occur and determine whether or not 
there may be a better way of trying to resolve some of these 
difficulties.
  That is what this bill is really all about. I will start out by 
saying it is a 36-month bill. This bill sunsets; every provision of 
this bill dies after 36 months. We are not writing something in 
concrete or marble here that is going to last in perpetuity. For 36 
short months, this bill will exist.
  During that period of time, of course, we will learn whether or not 
we are going to have as widespread a problem with this Y2K computer 
issue as some have anticipated. If we don't, then this bill really 
isn't that important. I hope that will be the case. Nothing would make 
me, as one of the coauthors of this bill, happier than to find next 
January, February, and March, that all of the fears that have been 
raised by the Y2K issue turn out to be nothing more than that--fears--
and that there would be no reason to litigate or to take 90 days to try 
to resolve the problems. If that is the case, then the bill will last 
for 36 months, but it won't have any significance.
  If, however, there are problems that go beyond what I think will be 
the case, we could end up with people racing to the courthouse to 
litigate the issues rather than trying to solve the problem. If 
businesses are spending money on legal fees rather than trying to spend 
money on technicians and others to solve the problem so that the users 
of their equipment will be made whole, then we could end up having the 
Y2K problem be a lot more serious than I think it is apt to be.
  This agreement, this conference report--even if you had no idea what 
was in it, I think you would be safe to conclude that it is probably a 
good one, for one basic reason: no one is fully satisfied. Everyone had 
to make concessions in this proposal.
  It is not perfect, by any stretch of the imagination. But that should 
not obscure the fact that it is an outstanding achievement, in my view, 
arrived at in a manner that is bipartisan, bicameral, and in 
cooperation with the executive branch.
  It is narrowly crafted to address the repercussions of an event that 
will only happen once in history: the changing of the calendar, 183 
days from today, to the new millennium. We don't know, as I said, with 
precision what the repercussions will be. We hope and trust that, for 
our citizens, they will be minimal. But we know there will be 
repercussions, affecting virtually every facet of our lives, from 
energy to health care, from food to telecommunications.

  We will encounter problems associated with the Y2K glitch. And in 
America, where there are problems, lawsuits are never far behind. The 
Y2K committee, as I mentioned earlier, which I cochair with Senator 
Bennett, heard hard evidence that some members of the trial bar have 
been gearing up for quite some time to usher in the new millennium not 
with a celebration, but with a subpoena. By some estimates, they will 
file claims totalling $1 trillion or more.
  While some of these suits will have merit, many, I am fearful, will 
not.

[[Page S8028]]

 They will become vehicles for profit by select members of the trial 
bar, not to rectify wrongs done to consumers or to businesses.
  Ultimately, an avalanche of frivolous lawsuits seeking to reap a 
bonanza from this Y2K problem could have a crippling effect on our 
economy, especially on the technology-based businesses that are 
creating the lion's share of new jobs in our Nation today.
  This bill would slow the knee-jerk rush to the courthouse. It says to 
those who would seek litigation as a first resort: Look before you 
leap. It focuses businesses and consumers on fixing the problems, not 
fighting over them, and getting on-line, rather than getting in line at 
the courthouse. It encourages them to resolve differences in a 
conference room, not a courtroom.
  This conference report is narrowly crafted to address frivolous Y2K-
related litigation, and only frivolous Y2K-related litigation. Its 
carefully circumscribed scope was acknowledged --albeit reluctantly--
the night before last by Mr. Mark Mandell, president of the Association 
of Trial Lawyers of America. He had this to say about the conference 
report:

       It is positive that this unique response to a unique 
     situation will be law for only three years and that the legal 
     rights of anyone who suffers a physical injury are preserved.

  I commend him for the responsibility of that statement. He is the 
head of the trial lawyers in this country. I quickly add that he is not 
endorsing this bill; he disagrees with it, but he has framed it right. 
It is a unique answer to a unique problem that, for 36 months, we want 
on the books to avoid the potential problems that can affect our 
society.
  These are two important points that deserve to be restated:
  First, as I said, this is only a 3-year bill. It works no permanent 
changes in our legal system. Second, it completely and totally exempts 
consumers who allege they have suffered physical injury as a result of 
a Y2K failure.
  In addition, the conference report contains several other responsible 
and modest provisions that weed out frivolous lawsuits, do no injury to 
tort law and, most important, allows America's businesses to continue 
to create jobs.
  This bill establishes a 90-day period before a suit can be filed to 
at least create an opportunity for the parties to remedy the defects 
and avoid expensive, time-consuming litigation.
  We are not going to guarantee the problem will get fixed in that 90 
days, but it will sort of call a timeout for 90 days, 3 months, to try 
to solve the problem. That is not a radical idea. It is not a radical 
idea at all to try to get people to work out their differences. That 
may be a radical idea if your motivation is to get to the courthouse as 
fast as you can. To that crowd, it is a radical idea. But to the 
businesses and consumers who would like to be made whole and have the 
problem fixed, having a cooling-off period for 90 days as we try to 
solve this problem is not asking too much in a 3-year bill.
  The bill also requires plaintiffs to plead with particularity about 
the nature of the harm allegedly done to them, and the monetary amount 
of damages they are seeking as a result of that harm. That is another 
``radical'' idea--that you have to allege with some specificity what 
caused the problem. I know that is a bad idea if you would like to sort 
of use boilerplate language and race to the courthouse. If you are a 
defendant, you ought to know what you are charged with, what the 
plaintiff thinks you have done wrong. That ought not to be a great 
radical deviation from the norm. For 36 months, we are going to require 
that. That ought to be permanent law, in my view, but in this bill it 
lasts only 36 months.
  The bill also prevents plaintiffs from recovering damages that they 
could have reasonably and foreseeably avoided. Another radical idea. To 
discourage plaintiffs from suing the so-called ``deep-pocket'' 
defendants, the bill establishes a rule of proportionate liability.
  As a general matter, it holds the defendant responsible only for the 
harm it causes, and not for the harm caused by other defendants. Again, 
what a radical idea that is. If you are fractionally responsible, they 
would like you to have to pay the whole tab. Again, I appreciate their 
desire to do so. So you shop all around, and, if you can find anybody 
with deep pockets who may have handled the box for 5 minutes, then you 
can get them in a court, and, boom, you can hit them for the total 
amount.
  That is what has caused as many problems as anything else--the lack 
of proportionality and balance.
  At the same time, we don't allow that provision of proportionality to 
apply across the board without exception. We make several reasonable 
exceptions in the interest of fairness.
  Plaintiffs who sue as individuals, rather than as members of a larger 
class, may recover jointly and severally from any defendant, even if 
they are marginally involved, thus helping to ensure that individual 
consumers will fully recover damages.
  The bill contains other provisions to ensure that irresponsible, 
reckless, or intentionally wrongful defendants are in no way shielded 
and are fully responsible for their actions. Defendants that commit 
intentional torts will be held jointly and severally liable, even if 
only fractionally, including for economic losses.
  In addition, defendants who knowingly make false statements about the 
Y2K readiness of their goods or services may not seek mitigation of 
damages when plaintiffs rely in good faith on such statements. That is 
yet another consumer protection contained within this conference 
report.
  There are still other improvements that have been made here, largely 
at the behest of the Administration--improvements, which, in my view, 
strengthen the legislation. For instance, the class action provisions. 
Members of a class of under 100 people, and with claims under $10 
million, can stay in State court.
  We made change after change to accommodate the concerns that were 
raised--many of them reasonable concerns, I might add--to make this a 
stronger and a better bill.
  We are trying to avoid frivolous lawsuits for 36 months. We are 
trying to solve the problem. I again want to thank the committee 
chairman and other colleagues who have played such an important role.
  Lastly, I thank this President of the United States. When I saw the 
President--not at 1:30 in the morning, but he was in my State last 
Monday--I mentioned this bill to him in a conversation that may have 
lasted 1 minute. I said: We will have the Y2K issue up in the next day 
or so. The President said: I would like to sign a bill. I think it is 
important to have one. But there have to be changes in this legislation 
before I can sign it. If you can get those changes and work with our 
staff, I will take a look at it.
  That is not an unreasonable statement for an American President to 
make on an issue like this that confronts our country in 183 days. We 
went to work that night and worked on these changes. It was late in the 
evening.
  When I, along with my colleague from Oregon, submitted the final 
proposal to the President of the United States, he said, to his credit: 
If you can make one more change in this particular area, then I think I 
could support this bill.
  That is how this happened.
  He is being ridiculed today because he tried to get a bill done to do 
something about a problem that affects, or will affect, or could 
affect, millions of people in this country. He ought not be ridiculed. 
He ought to be commended for it. Yes, he could have caved in and gone 
along. I know a lot of his staff and others didn't want him to sign 
this bill. But this President went to work, and he listened to the 
proposal. He made some suggestions, and he said: If you can accommodate 
or meet me part way here on some of these ideas, then I would be 
willing to sign this bill into law.

  As a result of those efforts, he could have said to me on Monday 
afternoon: I am sorry, there isn't anything you can do with this bill; 
I am just flat out against it. That would have been the end of it, 
frankly. I wouldn't have stayed up half the night trying to work out 
differences. But he said try. We did. And we reached that level of 
support, or a level of achievement which he thought he could support, 
and that brought us to the point of getting this legislation done.
  Again, there is nothing perfect about it. I am fully aware that there 
may be

[[Page S8029]]

some problems with it down the road. I think this is a good effort to 
try to minimize those difficulties, to avoid lawsuits and solve the 
problems, and make this country stronger when it comes to the interest 
of the 21st century.
  Let me again thank my colleagues who persisted in their efforts to 
reach this point. I also want to recognize the staff who were so 
instrumental in bringing us to this point, particularly: Marti Albright 
and Mark Buse of the Commerce Committee; Manus Cooney and Larry Block 
of the Judiciary Committee; Jeanne Bumpus with Senator Gorton; Robert 
Cresanti, Tania Calhoun, and Wilke Green of the Year 2000 Committee; 
Carol Grunberg with Senator Wyden; David Hantman with Senator 
Feinstein; Laurie Rubenstein with Senator Lieberman; and Steven Wall 
with Senator Lott.
  I thank my colleague for yielding, and I urge adoption of the 
conference report.
  Mr. HOLLINGS. Mr. President, I yield such time as necessary to the 
distinguished Senator from North Carolina.
  The PRESIDING OFFICER. The Senator from North Carolina.
  Mr. EDWARDS. Thank you, Mr. President.
  Let me say, first, that there are two very important reasons that 
this has been an extraordinarily difficult issue for me. The first of 
those reasons is that I have extraordinary respect for the Senator from 
Arizona, the Senator from Connecticut, and the Senator from Oregon. 
They are friends of mine. They are good Americans. They are good 
people. They care about this country. They care about it deeply. I 
don't question their motives for one moment. I believe they are doing 
what they think is right.
  The second reason is that I began this process myself desperately 
wanting to support some kind of Y2K bill.
  The problem with the way the debate has been conducted is that the 
focus of my colleagues from Oregon, from Arizona, and from Connecticut 
has been on things we all agree on. We all agree--speaking for myself--
that we should create incentives for computer companies to solve these 
problems, that we should create incentives for people who buy computers 
to work with those folks to solve problems, and to mitigate whatever 
damage or loss they may sustain.
  We all believe there ought to be a cooling-off period. At least I 
believe there should be a cooling-off period. I do not think we want 
folks rushing to the courthouse the first time a problem rears its ugly 
head. I think we should have reasonable, thoughtful alternative dispute 
resolution.
  I think all of those things are good things. They are laudable. They 
accomplish important goals. They are things I support and believe in. 
On those subjects, and on the subject of preventing frivolous 
litigation, I am totally in agreement with my colleagues who support 
this bill.
  The problem is, we are not focusing on the single, most fundamental 
problem in this bill, which is that in 99 percent of the cases small 
businesses and consumers who suffer losses as a result of an 
irresponsible act by a computer company in respect to Y2K can recover 
nothing but the cost of their computer. They can't recover their lost 
wages. They can't recover their actual lost profit. They can't recover 
their overhead. If they are run out of business, they are just stuck.
  Unfortunately, what we have here is what I am afraid happens too 
often in Washington. The little guy loses, and the big guy wins.
  There is no question that the computer industry has a powerful voice 
in this body. The people who are going to be damaged and hurt by this 
bill don't even know it yet. They largely are completely unaware of it. 
The small business men and women of this country and consumers in small 
towns all over North Carolina and across the United States don't even 
know that they are going to suffer losses, that they are going to be 
put out of business. They do not know that. My question to my colleague 
is, Who speaks for them?
  We have heard the voices loudly, clearly, powerfully, and 
articulately for powerful, big business. There are many things I will 
support industry on that I believe are in the best interests of 
America. The problem is, the people who are going to be injured by this 
bill, the people who are going to be put out of business, the people 
who by all accounts--my colleagues from Oregon and Connecticut have 
just conceded--will have real and legitimate losses, who speaks for 
them? I am afraid the answer is that no one speaks for them. They don't 
give big money to campaigns. They don't even know what is going to 
happen to them yet. They are out there and are innocent victims. Who is 
the voice for the little guy in this debate?
  These losses we have talked about--I am eliminating frivolous 
lawsuits, I am eliminating causes that ought to be resolved, things 
that ought to be resolved by discussion between the seller and the 
buyer, all of those things that we are all in agreement on--I am 
talking about that little business guy or woman in Murfreesboro, NC, 
who bought a computer believing that it was Y2K compliant, having been 
told that it is Y2K compliant, and the computer is not Y2K 
compliant. They lose their business. They have lost thousands and 
thousands of dollars, and they are literally out of business.

  That loss--no matter what we do in this Senate, no matter what we do 
in this Congress, and, with respect, no matter what the President signs 
in the Oval Office--that loss will not go away. It will be there, and 
it will not disappear.
  There is a fundamental concept we all have to recognize when we come 
to the well later today to vote. Those who vote for this bill have made 
a conscious decision. As long as we are willing to recognize that 
decision, I will respect the vote. That decision is this: We have made 
a conscious decision that losses --which are real and legitimate, out-
of-pocket losses suffered by small business men and women all over this 
country--that losses are going to be shifted. We are going to move them 
from the responsible party to the innocent party. In this case, the 
innocent party is a small business; is a consumer; is somebody who 
cannot pay their employees anymore; is somebody who has no cash-flow 
because their manufacturing operation has been shut down because of a 
Y2K problem.
  The bottom line is this: We are making a judgment on the floor of the 
Senate that those real and legitimate losses which everyone concedes 
are going to occur--that is the ``nut'' of this. Everything else we 
agree on. I agree with my colleagues about eliminating frivolous 
lawsuits, about alternative dispute resolution, about cooling off 
periods, about trying to do everything in our power to solve these 
problems. The nut of this problem is, what happens to the little guy 
who suffers a real loss?
  When this conference report passes on the floor of the Senate later 
tonight, we have made the judgment that we will shift that loss. We are 
going to shift it on to the people who have no voice, who don't even 
know they are victims. They are not sitting in our offices. They are 
not sitting there because they don't know they have been hurt yet. We 
are going to shift the loss to them. We are going to make sure it stays 
right with them. We are going to make sure that multimillion-dollar and 
multibillion-dollar businesses bear as little of that loss as possible. 
That is exactly what this bill does. It is that simple.
  For all of the rhetoric on the floor, it is not about lawyers. It is 
about the people who make computers. It is about the people who make 
computer chips. It is about the people who buy computers. Those are the 
parties to this transaction.
  The bill that came back from conference is worse than the bill that 
went to conference. It is worse for a very simple and fundamental 
reason: It creates multiple additional roadblocks to innocent people 
who get hurt by the Y2K problem. A job that was already extraordinarily 
difficult, for them to recover for what happened to them, has become 
almost impossible at this point.
  I say with complete respect to my colleagues who have argued 
vehemently on the floor that this is a 3-year bill, that it will sunset 
in 3 years, and for that reason it is not bad, that the argument is a 
smokescreen. Every Y2K problem that will come into existence will 
happen during that 3-year period--99 percent. By its very nature this 
problem will show its ugly head in

[[Page S8030]]

the year 2000 or the year 2001. Essentially, we are going to cover 
every single Y2K problem that can come into existence.
  One bit of language that has been referred to in the bill that 
proponents claim helps improve this report over the Senate-passed 
version has to do with the issue of recovery of economic losses such as 
lost profits, lost overhead, lost income. A phrase reads: ``A party to 
a Y2K action making a tort claim other than a claim of intentional 
tort''--up until then it is fine--``arising independent of a 
contract.''
  I have spent the last 20 years of my life as a practicing lawyer. 
This is what that phrase means. If a computer person walks into a small 
business anywhere in this country and makes a fraudulent 
misrepresentation, intentionally misrepresents the Y2K compliance of 
their product, lies, commits criminal fraud, and induces somebody to 
sign a contract on that basis, and in fact, if the contract itself 
contains fraudulent misrepresentations, what that person can recover is 
the cost of their computer.

  They are victims of criminal fraud. I want the American people to 
hear this. They are the victims of criminal fraud. What they can get 
back is the cost of their computer.
  This bill started with a good purpose. It is supported by Members of 
the Senate whom I have extraordinary respect for. I absolutely have no 
question about their motives. They are doing what they believe is 
right. They have made beautiful cases for it on the floor of the 
Senate. My concern has been and continues to be that there is a voice 
that is not being heard on the floor of the Senate. It is the voice of 
the victims; it is the voice of the consumers; it is the voice of the 
people who don't know yet that they are going to be put out of 
business. It is the voice of people who don't know yet that they have 
been lied to or misrepresented to, been induced to sign a contract 
under the specific language of this bill.
  As a result of this bill, they can recover absolutely nothing but the 
cost of their computer.
  It is wrong. It violates every concept of justice that exists in the 
United States and has existed for the last 200 years.
  We can do the things that my colleagues want to do: Get rid of 
frivolous lawsuits, induce people to solve these problems, get people 
to work together, not go into court. We can do all those things, and we 
can accomplish those things. But we can do it without gutting the right 
of the little guy who has a real and legitimate claim and has suffered 
a tremendous loss, been put out of business, without taking away that 
very fundamental right.
  Those people are going to be sitting in our offices. So I have one 
last question to my colleagues: When those men and women are sitting in 
your offices in February, March, and April of the year 2000, saying: I 
have been put out of business, who do I go see? Who do I go see about 
this? I am out of business. Computer people made fraudulent 
misrepresentations in my contract. They were reckless in the way they 
made their product. I never knew it. I am out of business.
  They are sitting on our couch in our offices, and they look in our 
eyes and say: Who do I go see about this problem? Maybe some of my 
colleagues have an answer to that question. Unfortunately, I do not.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. I have only been in this body for 13 years. I have never 
heard quite such a mischaracterization of legislation as the Senator 
from North Carolina just displayed.
  I yield 5 minutes to the Senator from Washington.
  Mr. GORTON. Mr. President, the success of legislation in a matter of 
considerable controversy in our society is always built upon the 
foundation of compromise. This relatively short debate on the final 
passage of H.R. 775 is a perfect example of that compromise. The 
Senator from Oregon, who was so responsible for the final form of this 
bill, listed all of the changes that he required in order to approve of 
this legislation. The Senator from Connecticut spoke eloquently of the 
way in which he worked with the administration to change a ``no'' into 
a ``yes,'' and make this legislation a reality. My very good friend, 
the chairman of the Commerce Committee, the Senator from Arizona, spoke 
of the fact that both the original House bill and the original Senate 
bill were much more sweeping and much more decisive in dealing with 
this Y2K problem. He deserves an extraordinary degree of our thanks and 
our admiration for working constantly and tirelessly toward a 
successful conclusion, even though that conclusion is not something he 
regards as wholly satisfactory.
  I fall on his side of that debate. I think we should have done much 
more. I am, in fact, a radical reformer in this whole litigation field, 
whether it is this narrow issue or the broader issue of product 
liability or medical malpractice or the questionable utility of 
punitive damages in civil litigation. I would go much further than this 
bill does. But what we have done is to bring people together to solve a 
problem in a way that we can deem a success, all the way through to the 
signature of the President of the United States.
  During the last 20 years, our society and our economy may have 
changed more dramatically than in any other similar period of history. 
We have become a computerized information society, due to the very 
technological developments that resulted in a Y2K challenge. But the 
Senator from North Carolina claims to speak for the voiceless. They are 
not voiceless. They played a major role in this debate. The coalition 
that has wanted far stronger legislation than this does, of course, 
consist of software and hardware companies. But it also consists of the 
great bulk of the representatives of the customers of those companies. 
The National Federation of Independent Business is the largest single 
organization of small business in this country. It favors this 
legislation. It favors legislation stronger than this. So whoever the 
Senator from North Carolina was speaking for, it was not the small 
businesspeople who do not look forward to a blizzard of litigation on 
this subject.
  Of course, in retrospect, this new technology might have thought 
about the Y2K problem earlier than it did. But at this point, our goal 
should be a solution to the problem, not a blizzard of second-guessing 
litigation, especially litigation that will almost certainly slow down 
the future development of the very technology that has been so 
responsible for the growth in the American economy and has caused such 
significant changes for the good in the lives of people all around the 
world.
  This bill is by no means perfect. In the view of this Senator it 
lacks that perfection because it is not all-encompassing enough. It is, 
however, at least a modest step in the right direction, one supported 
not only by the technology companies that are responsible for the 
computer revolution but by their customers and consumers as well.
  So with my colleagues on both sides of the aisle, I can 
wholeheartedly recommend the passage of this legislation to the Senate 
and look forward with satisfaction to the President's approval of this 
bill.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER (Mr. Bennett). The Senator from South Carolina.
  Mr. HOLLINGS. Mr. President, once again I do not yield from the 
statement made that this has been one shabby charade. I intended to, 
and did, take the President to task, and I do so. You don't send five 
veto messages and then come with a sorry bill, a worse compromise. It 
is obvious. You can look at it on the face of it. It did not take care 
of the consumers. Senator Leahy tried to. It was what we adopted in the 
Congress last year, in the securities bill, in the other measure; we 
always take care of the consumers. But here the one group penalized, 
sidelined, damaged, if you please, are the consumers of America.
  I ask unanimous consent to have printed in the Record the letter from 
Public Citizen, opposing the bill, opposing this report.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

                                               Public Citizen,

                                    Washington, DC, June 24, 1999.

               Please Oppose the Senate Y2K Immunity Bill

       Dear Representative: On behalf of Public Citizen's 150,000 
     members, we thank you for

[[Page S8031]]

     your vote against passage of H.R. 775, the Y2K immunity bill. 
     We urge you to continue to stand up for consumers and small 
     businesses by voting against the Senate-passed version of 
     this unfair legislation if it is brought to the House floor. 
     Although this measure is somewhat ``less extreme'' than the 
     version of the bill that you opposed when the full House 
     voted on this measure last month, the Senate bill is also 
     sweeping in scope, and its effect on individual and small 
     business consumers will be virtually the same as the House 
     bill: it will make it next to impossible for those with 
     legitimate Y2K claims to seek full and fair compensation in 
     state courts.
       Both the Senate and House Y2K bills bestow special legal 
     protections upon companies responsible for manufacturing and 
     selling technology products and computer systems that will 
     not work in the Year 2000--even to those companies that 
     knowingly sold Y2K defective products within the last few 
     years, and even to those that are still selling defective 
     products and systems today. This kind of blanket protection 
     from accountability is unfair and unwise. Not only will these 
     bills preempt important consumer protections under state law, 
     they are likely to undermine Y2K readiness by sending a 
     message that Congress will not allow companies to be held 
     accountable for their acts and omissions. They will lead to 
     more Y2K failures and injuries, not fewer.
       The Senate bill has not all, but many, of the same kind of 
     extreme provisions that made the House bill unacceptable. For 
     example, the Senate proposal contains:
       A mandate that, to receive punitive damages at all against 
     any defendant--even a huge corporation--a plaintiff must 
     prove applicable state law standards for punitive damages by 
     clear and convincing evidence--a higher burden of proof than 
     is required under many state laws; this provision would make 
     it harder to hold the most irresponsible defendants fully 
     accountable.
       In addition, the bill also imposes a cap on punitive 
     damages of $250,000 or three times actual damages, whichever 
     is less, in cases involving defendants with 50 or fewer 
     employees; this cap applies no matter how egregious the 
     defendant's behavior unless the plaintiff can prove by clear 
     and convincing evidence that the small business defendant 
     specifically intended to harm the plaintiff--an extremely 
     difficult standard for a plaintiff in a civil case to meet.
       The elimination of joint liability of defendants in most 
     instances--even for defendants that are substantially 
     responsible for causing a Y2K failure--with no requirement 
     that defendants take any steps to avoid Y2K failures in the 
     first place to receive this liability limitation; this change 
     in law would leave many injured individuals and small 
     business consumers without full compensation.
       A provision to allow defendants to remove most state law 
     Y2K class actions into federal court--a proposal opposed by 
     the Judicial Conference of the United States, chaired by U.S. 
     Supreme Court Chief Justice Rehnquist.
       Additional burdens on class action plaintiffs such as 
     heightened notice and pleading requirements and requirements 
     that courts find that the majority of class members' injuries 
     to be ``material'' at the outset of any litigation; these 
     requirements will make it harder for consumers to bring their 
     cases as a class, even if that represents the most efficient 
     way to adjudicate their cases.
       So-called ``bystander liability'' provisions, limiting the 
     liability of parties other than the product manufacturer or 
     seller by making it more difficult to prove claims of fraud, 
     negligent misrepresentation, interference with contract and 
     other claims where the defendant knew or should have known 
     about the Y2K failure at issue.
       A mandatory waiting period of 90 days before plaintiff can 
     bring a suit--with no requirement that defendants actually 
     fix any Y2K problems during that time, even though some 
     plaintiffs could suffer substantial losses during that 
     period, such as a small business that is forced to close.
       In addition, the Senate added more special protections for 
     defendants and one-sided provisions that make the Senate bill 
     even worse in some respects than the bill that passed the 
     House. These include:
       A complete one-way preemption of state law, preserving 
     every state law that gives more liability protections to 
     defendants while ensuring that the bill only wipes out all 
     current state law rights that benefit consumer and small 
     business plaintiff.
       A complete affirmative defense against governmental 
     enforcement actions for defendants that failed to comply with 
     most federally enforceable measurement or reporting 
     requirements because of a Y2K failure that was ``beyond the 
     reasonable control of the defendant;'' this applies to rules 
     of the Environmental Protection Agency, the Food and Drug 
     Administration, the Occupational Safety and Health 
     Administration and other agencies, unless the violation poses 
     an imminent threat to the environment, health, or safety.
       The suspension of federal penalties for any violation of 
     any federal regulation caused by a Y2K failure (except a rule 
     related to the banking or monetary system) for businesses 
     with 50 or fewer employees as long as that business did not 
     violate the same rule within the last three years and made 
     some ``good faith effort'' to avoid the Y2K problem.
       The only pro-consumer amendment added to the bill in the 
     Senate offers temporary protection against adverse actions by 
     financial institutions or credit agencies for individuals or 
     small businesses unable to meet a financial obligation, such 
     as making a mortgage payment or paying a credit card bill, 
     because of a Y2K failure. This is an important provision to 
     ensure that a person's credit is not ruined or a family 
     evicted because of an inability to make a payment through no 
     fault of their own. But this one pro-consumer amendment in no 
     way makes up for the overwhelming unfairness of the 
     underlying Senate bill to most consumers and small businesses 
     who will experience Y2K failures in products and services 
     they have purchased, or who suffer Y2K damages from chemical 
     spills or other Y2K-caused accidents.
       Please oppose the Senate version of H.R. 775.
           Sincerely,
     Joan Claybrook,
       President, Public Citizen.
     Frank Clemente,
       Director, Public Citizen's Congress Watch.

  Mr. HOLLINGS. Mr. President, this is the letter we received from the 
distinguished executive assistant, Mr. John Podesta. I ask unanimous 
consent this be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                              The White House,

                                        Washington, June 30, 1999.
     Re H.R. 775--the Year 2000 Readiness and Responsibility Act.

     Hon. Thomas A. Daschle,
     Democratic Leader, U.S. Senate,
     Washington, DC.
       Dear Mr. Leader: The nation faces the possibility that 
     widespread frivolous litigation will distract high technology 
     companies and firms throughout the economy from the important 
     work of preventing--and if necessary--repairing damage caused 
     by the inability of systems to process dates in the new 
     millennium. Special, time-limited legislation to deter 
     unwarranted Y2K lawsuits is important to our economy.
       Over the last few months, the Administration sought to 
     ensure that, while we deterred frivolous claims, we also 
     preserved important protections for litigants who suffer bona 
     fide harm. We believed that the Senate-passed bill failed 
     this test. The Conference Committee agreed to make a list of 
     changes that were important to provide necessary protections.
       The agreed-upon changes were translated into legislative 
     language extremely narrowly, threatening the effectiveness of 
     the negotiated protections. Nonetheless, we have concluded 
     that, with these changes, the legislation is significantly 
     improved. Specifically, as modified, the Conference Report: 
     ensures that individual consumers can be made whole for harm 
     suffered, even if a partially responsible party is judgment-
     proof; excludes actions brought by investors from most 
     provisions of the bill and preserves the ability of the SEC 
     to bring actions to protect investors and the integrity of 
     the national securities markets; ensures that public health, 
     safety and the environment are fully protected, even if some 
     firms are temporarily unable to fully comply with all 
     regulatory requirements due to Y2K failures; encourages 
     companies to act responsibly and remediate because those 
     defendants who act recklessly are liable for a greater share 
     of a plaintiff's uncollectible damages; and ensures that 
     unconscionable contracts cannot be enforced against unwary 
     consumers or small businesses.
       As a result, I will recommend to the President that he sign 
     the bill when it comes to his desk.
       In the normal course of business, the Administration would 
     oppose many of the extraordinary steps taken in this 
     legislation to alter liability and procedural rules. The Y2K 
     problem is unique and unprecedented. The Administration's 
     support for this legislation in no way reflects support for 
     its provisions in any other context.
           Sincerely,
                                                     John Podesta.

  Mr. HOLLINGS. We go to what we knew. They made the agreement, it was 
all signed up, and after the agreement was sent over to the White 
House, it was not what they agreed to even then. I read:

       The agreed-upon changes were translated into legislative 
     language extremely narrowly, threatening the effectiveness of 
     the negotiating protections. Nonetheless, we have concluded 
     that, with these changes . . . [we are going to sign the 
     bill].

  They were going to sign a bill. They were going to get a bill for the 
Vice President. We have to get this Silicon money. And they ought to be 
taken to task for this kind of performance here. We know what this is 
about. Like I say, no State, no Governor, no Attorney General, no 
legislature supports this effort. Let say that my distinguished friend 
from Connecticut is very effective. He says: What a radical idea when 
we have a unique problem.
  No, not at all. I am reading from the American Bar Association, all 
the lawyers:

       Traditionally, legal principles governing both tort and 
     contract actions have been the province of the States.


[[Page S8032]]


  Not the Federal Government. We all know that.

       The legal issues likely to be presented by the year 2000 
     problem are not unique.

  We know that. He said it is not unique, it is not a radical idea, it 
is not a radical idea to say what is wrong, specify in your complaint 
what is wrong. When the computer breaks down, I don't know what is 
wrong. Who does? It is like in the Food and Drug Administration, when 
there is bad food we have good product liability; we have a Food and 
Drug Administration. These products they have within their own purview, 
the proprietary information on the manufacturer, so if there is a 
product that breaks down, they know where it is. We cannot find it 
ordinarily. But here, they really sidelined middle America, consumers 
and the poor small businessman.
  They said that is a radical idea. It is a radical idea. It goes 
against the entire thrust of the safety principles we experience here 
in America. We have a safe society. You can depend on the food. You can 
depend on the products. The European Union is now following strict 
liability and joint and several liability that we have here in America. 
A radical idea to run to the courthouse? We are not running to the 
courthouse.
  It is a litigious society, but we will show tort claims are down and 
business suing business is up; domestic cases, rights cases for this 
right, that wrong; environment and otherwise, are up. But tort 
liability cases are down.
  This here really legalizes torts, it legalizes negligence, it 
legalizes fraud, all in the name of something that happens 6 months 
from now when, by their own measure they say we ought to have 90 days 
to fix it. Unreasonable? The Senator from California, she came and 
said: Let's get rid of all the lawyers, just use those 90 days to 
require the manufacturer to fix it; that's all we need. We need to get 
back in business. We do not need a rush to the courthouse.
  Rush to the courthouse? That implies you are going to get a rush 
judgment. Try to get 12 jurors to agree on anything today. You cannot 
get 12 Senators.
  They surely have gotten something very easily. Surely, it was not 
unreasonable to at least say you have to fix the problem, in return for 
expansive restrictions on plaintiffs' rights.
  Instead, they say you have to find out what is wrong and specify it 
before they do anything. Come on. They say that is in behalf of the 
consumers of America? And that is a good measure and it is a victory 
for America? No, Mr. President; this is a sad day when the moneys in 
campaigns are not just taken to get elected, are not taken just to buy 
the office, but when they buy the principles in order to cater to a 
crowd to pass this kind of legislation.
  How much time remains?
  The PRESIDING OFFICER. The Senator has 10 minutes 37 seconds.
  Mr. HATCH. Mr. President, I want to take a few moment to speak on 
behalf of the conference report. As you know, the negotiations over the 
details of the Y2K Act entered their final phase last Friday, during 
the weekend, and through Monday and Tuesday of this week. With the 
tremendous help and diligence, particularly of Senators McCain, Dodd, 
and Wyden, we were able to craft a compromise bill which addresses 
every one of the major concerns of the White House.
  Let me say that the final bill reflects the spirit of compromise. But 
I must admit that I believe the original Judiciary and Commerce 
Committee bills--along with the House bill--would have been far more 
effective in dealing with the problem of the expected frivolous and 
massive Y2K litigation--than the current compromise measure. But 
because of the overwhelming importance and need for this bill, both 
sides acted in good faith and reached an equitable agreement. Let me 
explain the depth and breadth of the changes that were made.
  First of all, the House, recognizing the urgent need to pass this 
legislation, acceded to the far more lenient Senate bill. In practice, 
this meant that twelve major provisions of the House bill were dropped, 
ranging from elimination of both caps on director and officer liability 
to caps on attorneys fees. In the conference negotiations, seven 
further important concessions were made. Finally, in negotiations with 
the White House led by Senator Dodd, we agreed to six further 
significant modifications to the bill. Mr. President, I have a list of 
these changes. I also have a letter from John Podesta to Senator Dodd, 
dated June 29, that enumerates the changes requested by the White House 
and--except for minor technicialities--agreed to by the conference. I 
ask unanimous consent that these two documents be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                              The Y2K Act


       1. Concessions Made On Y2K Act Since House & Senate Action

       House receded to the Senate, which means:
       No caps on Directors and Officers liability;
       Applies current state standards for establishing punitive 
     damages, instead of new preemptive federal standard;
       Cap on punitive damages no longer applies when defendant 
     specifically intended to injure the defendant;
       Removed caps on punitive damages for larger businesses;
       Restore principle of joint liability for defendants who 
     knowingly commit fraud. (House bill provided for several, but 
     not joint, liability);
       Definition of Y2K failure narrowed and targeted directly on 
     year-2000 date-related data;
       Dropped provisions dealing with attorneys fees;
       Added sunset provision limiting application of Act;
       Three major exceptions to proportional liability rule 
     added. These exceptions and, indeed, the proportionate 
     liability section itself, were taken from recent securities 
     law sponsored by Senator Dodd;
       Dropped the reasonable efforts defense or Federal rules for 
     admissibility of reasonable efforts;
       Dropped Federal rule for heightened state of mind 
     requirement;
       Confirms substitution of Federal question for minimal 
     diversity standard


                         2. Further Concessions

       Revised definition of Y2K action--strike ``harm or injury 
     resulted directly or indirectly'' and replace with the WH 
     formulation of ``harm or injury [that] arises from or is 
     related to'' an actual or potential Y2K failure. Add same 
     formulation to claims or defenses.
       Securities claims exclusion--Rejected WH formulation that 
     private securities claims should be exempted from the bill. 
     New provision would allow provisions of the securities law to 
     stand only it if conflicts with provisions of the Y2K Act. We 
     also agreed to exempt from the Y2K Act's application of 
     securities law the duty to mitigate section.
       Revised language on duty to mitigate--Added an exception 
     for intentional fraud (unless there was an unjustifiable 
     reliance on defendant's misrepresentations). Also exempted 
     securities claims from this section.
       Revised language on Economic Loss Rule--Adopted the 
     approach of the Kerry Amendment, which allow for economic 
     damages where the defendant committed an intentional tart 
     (except where the defendant committed misrepresentation or 
     fraud ``regarding the attributes or capabilities of the 
     project or service that forms the basis for the underlying 
     claims.''
       Warrany and contract preservation--Addition to existing 
     language, makes clear that contract terms can be voided by 
     state-law doctrines of unconscionability existing as of 
     January 1, 1999, in controlling judicial precedent of 
     applicable sate law.
       Proportion liability--new section which includes: Added 
     three provisions: (1) made clear that the provision does not 
     apply to contract provisions; (2) remove the 50% cap placed 
     on those whose shares are not collectable; (3) made clear 
     that all state law (common law as well as statutory) with 
     grater protection applies.
       Revised language on class actions--Two changes: (1) to 
     discourage the filing of all state class actions in federal 
     court, we increase the jurisdictional amount from $1 million 
     to $2 million. We also add a requirement that there must be 
     50 or more plaintiffs to remove state class actions to 
     federal court; and (2) to prevent elimination of state class 
     actions, which have been removed to federal court and the 
     judge remanded the class action as not proper in federal 
     court (does not meet the criteria of FRCP 23), such remands 
     will be without prejudice allowing the class action to be 
     refiled in state court (and, if appropriate, amended and 
     returned to federal court).
       Punitivies--Punitive damage cap for small business--50 or 
     less employees--which is the lesser of $250,000 or 3 times 
     compensatory damages. The cap does not apply if a defendant 
     acted with specific intent to injure the plaintiff.


                  concessions proposed by senator dodd

       Proportionate Liability; Double orphan share for all 
     solvent defendants; Triple orphan share for defendants proven 
     by plaintiffs to be had actors; Exempt individual consumers 
     in individual, but not class, actions.
       Class Actions; Increase monetary threshold to $5 million; 
     Increase class size exemption to 100 plaintiffs; Securities.
       Exempt all private security claims from Y2K Act, except 
     from bystander provision of that Act (Sec. 13(a) and (b)).
       Contract Enforcement: State law governing contracts of 
     adhesion and unconscionability remains enforceable.

[[Page S8033]]

       Economic Loss; Doctrine will not apply to claims of fraud 
     related to contract formation; Regulatory Relief (Gregg and 
     Inhofe amendments).
       Inhofe: Exemption applies so long as defendant could not 
     have known of the underlying violation because of a Y2K 
     failure of a reporting system. Similar approach with respect 
     to Gregg. (Specifics to be worked out with Administration and 
     others.)
                                  ____



                                              The White House,

                                    Washington, DC, June 29, 1999.
     Hon. Christopher J. Dodd,
     U.S. Senate, Washington, DC.
       Dear Senator Dodd: After our discussions regarding H.R. 
     775, the Year 2000 Readiness and Responsibility Act, to limit 
     liability resulting from Y2K failures, I am prepared to 
     recommend to the President that he sign legislation that 
     includes the following changes:
       Proportionate Liability--double orphan share for all 
     solvent defendants, triple orphan share for defendants proven 
     by plaintiffs to be bad actors, and exempt individual 
     consumers in individual, but not class, actions.
       Class Actions--Increase monetary threshold to $10 million, 
     and increase class size exemptions to 100 plaintiffs.
       Securities--exempt all private security claims from Y2K 
     Act.
       Contract Enforcement--State law governing contracts of 
     adhesion and unconscionability and contracts that contravene 
     public policy remain enforceable.
       Economic Loss--Doctrine will not apply to claims of fraud 
     related to contract formation.
       Regulatory Relief (Gregg and Inhofe amendments)--Changes 
     made to ensure that the provision would not endanger the 
     environment, public health or safety.
       Should the language of the legislation reflect our 
     understanding of the resolution of these issues, I would 
     advise that the President sign this bill. I am hopeful that 
     if these changes are made, legislation can be enacted on a 
     bipartisan basis.
           Sincerely,
                                                     John Podesta.

  Mr. HATCH. There can be no question that the final bill is more than 
a fair compromise. It balances the need to protect consumers against 
the need to safeguard business--particularly our high tech industries--
from the ravages of unrestrained predatory litigation. Indeed, some 
experts maintain that litigation over the Y2K bug could cost the world 
economy over one trillion dollars.
  I must emphasize the importance of this. One reason that our economy 
has been prospering is the beneficial effect of its increasing 
computerization. The Chairman of the Federal Reserve Board, Alan 
Greenspan, has asserted several times that the economy's increased 
productivity is in part due to computerization and the information 
revolution. And one of America's biggest exports is high technology 
goods and services. Without this bill, we would be strangling the 
proverbial goose that lays the golden egg. America must remain the 
pacesetter in high technology and the leader of the information 
revolution. Our security and national defense demands it.
  Because of the importance of this issue, I have stated that I want a 
bill and not a partisan issue. I believed that compromise was the only 
way to achieve a product that was both fair and that would pass 
Congress. The bill we produced is a good product. But, it could have 
been a better product if the administration had been more forthcoming. 
Despite frequent requests by myself, Chairman McCain, and other 
Senators, for the administration to become actively involved, the 
administration did not seriously enter into negotiations until last 
week. They now--after hours and hours of talks--reluctantly support the 
bill. Well, better late than never, I guess.
  I want to reiterate my thanks to Chairman McCain and Senators Dodd 
and Wyden. I also want to thank the other conferees, Senators Bennett, 
Thurmond, Gorton, Stevens, Burns, Leahy, Hollings, and Kerry, for all 
their hard work and efforts in making this bill fair, as well as, 
effective. Senator Bennett in particular was an early advocate for 
prompt and meaningful action on Y2K. I would also be remiss not to note 
my appreciation for the hard work and dedication of the cosponsor of my 
Senate Judiciary Y2K bill, Senator Feinstein.
  I also want to thank the House conferees for their hard work and for 
their wisdom and prudence. Finally, I want to thank the Senator and 
House staff for their dedication. I know the long hours they labored.
  I urge all Senators to support this compromise conference report.
  Mr. BOND. Mr. President, I rise to applaud my colleagues in the 
Senate and our friends in the House of Representatives for acting 
promptly to negotiate a conference report on the Y2K Act. As chairman 
of the Committee on Small businesses, I have paid particular interest 
to the small business community's concerns about the Y2K problems. 
While the ultimate consequences that will result from the Y2K problem 
are as yet unknown, small family-owned businesses are understandably 
concerned about their futures after the new year. They are concerned 
that their companies may be in danger either from the problem itself or 
from suits brought by trial lawyers concerned only with the fees they 
can obtain from settlements.
  These businesses have reason to worry that they will be bankrupted by 
never-ending litigation. Small, woman-owned and family-owned businesses 
are the most vulnerable from costly litigation, either as plaintiffs or 
defendants, because they do not have the time to devote to it and do 
not have excess revenue to afford it. In addition, small businesses do 
not want to sue companies with which they have long-standing 
relationships and whose survival is tied to their own. Yet, these 
vulnerable businesses see the looming specter of endless litigation on 
the horizon.
  Experts have estimated that total litigation costs related to the Y2K 
problem will be astronomical. For example, the Gartner Group, an 
international consulting firm has estimated that more than $1 trillion 
will be spent on Y2K litigation. Therefore, this legislation, by 
encouraging resolution of Y2K disputes outside the courtroom and 
decreasing the number of frivolous lawsuits that small businesses may 
have to face, will help to ensure that litigation arising from this 
problem will not devastate the millions of small businesses that are 
the engine of our nation's economy.
  The small businesses that are troubled about the prospects of Y2K 
litigation are located on Main Streets all across America, not just 
Silicon Valley. They are this country's mom and pop groceries, its dry 
cleaners and its hardware stores. The National Federation of 
Independent Businesses, the nation's largest small business 
association, strongly supports this legislation. The NFIB surveyed its 
members and found that an overwhelming 93 percent support capping 
damage awards for Y2K suits. The small business community is speaking 
with a unified voice in support of legislation to limit the impact of 
Y2K suits for the good of this nation and by voting for the conference 
report today we are not ignoring this voice.
  The conference report also contains an important amendment that was 
adopted in the Senate sponsored by Senator Gregg and co-sponsored by 
me. While the underlying bill will ensure that small businesses do not 
face financial ruin from costly litigation, the amendment will make 
certain that our own government does not bankrupt small businesses over 
the Y2K problem. This amendment will waive Federal civil money 
penalties for blameless small businesses that have in good faith 
attempted to correct their Y2K problems, but find themselves 
inadvertently in violation of a Federal regulation or rule, despite 
such efforts.
  Most experts that have studied the Y2K problem agree that regardless 
of how diligent a business is at fixing its Y2K problems, unknown 
difficulties are still likely to arise that may place the operations of 
such businesses at risk. The last thing this government should do is 
levy civil money penalties on small businesses that find themselves 
inadvertently confronted with Y2K problems. Many of these businesses 
will already have had their operations disrupted and may be in danger 
of going out of business entirely. The Gregg-Bond amendment in the 
conference report ensures that the Federal government does not push 
them over the edge. I urge all my colleagues to support the conference 
report for the sake of our country's small woman- and family-owned 
businesses and to ensure that the economic health of our nation is not 
imperiled by the Y2K problem in the coming year and beyond.
  Mr. KERREY. Mr. President, as I have stated before, the debate 
surrounding Y2K Liability is a very important one. The estimated cost 
associated with Y2K issues vary greatly,

[[Page S8034]]

ranging from $600 billion to $1.6 trillion worldwide. The amount of 
litigation that will result from Y2K-related failures is uncertain, but 
at least one study has guestimated the costs for Y2K related litigation 
and damages to be at $300 billion.
  With that in mind, Congress has been debating legislation which 
encourages companies to prevent Y2K failures and to remedy problems 
quickly if they occur, and to deter frivolous lawsuits. Although I 
support the goals of the bill that passed the Senate last month, I 
voted against that bill because I did not feel it provided enough 
protection for consumers.
  I am pleased to see that changes were made in the Conference Report 
that address my concerns and provide protection for consumers. Because 
of these important changes, I intend to support the Y2K Liability 
Conference Report. Many of my colleagues have pointed out positive 
changes to this bill. I would like to highlight just two provisions 
that will put consumers in a better position with respect to Y2K 
litigation.
  The first provision concerns proportionate liability. Exceptions to 
the general rule of proportionate liability were made to ensure 
ordinary consumers are protected and ``bad actor'' defendants are not 
rewarded. These bad actor defendants, those who act recklessly, will 
bear a higher proportion of liability for otherwise uncollectible 
damage claims. This both protects consumer plaintiffs and provides 
companies with an incentive to identify and remedy Y2K problems.
  The second provision deals with the duty to mitigate. Under the bill, 
plaintiffs have a duty to mitigate damages, which means that they have 
a duty to fix computer problems that could have been reasonably 
avoided. The Conference Report adds an important exception to this 
rule. Consumers who rely on fraudulent misrepresentations made by 
defendants about Y2K readiness will be exempted from this duty to 
mitigate. In other words, if a computer company tells a consumer in bad 
faith that his computer is ``Y2K compliant'' and that turns out to be 
false, the consumer will be in a better position to recover damages 
from that bad faith defendant.
  The Y2K issue is a very unique, once in a millennium, problem. 
Because it is so unique, I agree that legislation is needed. I believe 
this legislation now strikes a proper balance between consumers and the 
high tech industry---computer companies have an incentive to identify 
and remedy potential Y2K problems, and consumers have important 
protections when faced with bad actor defendants. Therefore, I will 
cast a vote in support of the Y2K Liability Conference Report.
  Mrs. FEINSTEIN. Mr. President, I am pleased that the long road to 
enacting this critical legislation is finally coming to an end.
  The conference report now before the Senate is the product of more 
than seven months of tough, complex negotiations between the high-tech 
industry, the White House, trial lawyers, consumer groups, computer 
consultants, countless Members of the House and Senate and other 
interested parties.
  The final, bipartisan bill--now supported by the President--will 
create a once in a millennium, three-year law. Without it, I believe we 
could see the destruction or dismemberment of America's cutting edge 
lead in technology.
  Mr. President, several well-known consultants and firms, including 
the Gartner Group, have estimated that Y2K litigation could quickly 
reach as high as one trillion dollars. This potential litigation flood 
could prevent companies from solving Y2K defects, and as a result could 
put the high-tech engine that has propelled our economy to new heights 
at risk.
  This bill is especially important to California, where over 20 
percent of the nation's high-tech jobs are located.
  And the problem extends beyond high tech companies into the lives of 
employees, stockholders and customers of a wide range of American 
business.
  We solved part of the Y2K problem last year when Congress 
overwhelmingly passed legislation to protect companies who make 
statements about Y2K problems in order to help others predict and solve 
these problems before they occur.
  But we must now take an extra step, in order to encourage companies 
to work to prevent and fix Y2K problems with minimum delay.
  Without this bill, companies may be forced to devote far too many 
resources to preparing for lawsuits rather than mitigating damages and 
solving Y2K problems.
  And many consultants have come to us and said that they have refused 
to become involved in helping companies solve Y2K problems, for fear 
that they will open themselves up to being sued later on. They would 
rather just not get involved.
  As a result, the very people capable of fixing Y2K defects are 
unavailable to perform those fixes.
  I believe we face a real problem, and we have tried to craft a real 
solution.
  And crafting that solution has not been easy. On almost a daily 
basis, Senate staffers, industry representatives, opponents of the bill 
and others have met for hours at a time to hammer out differences, 
clarify language, and make significant, substantive changes to the 
early versions of these bills.
  In fact, even before the Conference Committee met over the last week, 
the original sponsors of Y2K litigation reform, including myself and 
Senators Hatch, McCain and Wyden, made dozens--if not hundreds--of 
changes to these bills. We addressed every concern we could, we 
significantly limited the scope of the bills, and we clarified many 
sections to ensure that plaintiffs and defendants alike will find an 
even, uniform playing field once the bill passes.
  And it is important to remember that nothing in this bill is 
permanent--rather, it is a three-year bill limited to certain specific 
cases. The bill applies only to Y2K failures, and only to those 
failures that occur before January 1, 2003.
  This bill contains a number of key provisions meant to deter 
frivolous suits and encourage remediation, arbitration, and problem-
solving.
  Most of these provisions have been modified or limited during the 
negotiations that have taken place over the last seven months. Several 
changes were made as late as this week, during negotiations with the 
White House.
  The bill provides a 90-day ``cooling off period'' during which time 
no suit may be filed, so that businesses can concentrate on solving Y2K 
problems rather than on fending off lawsuits.
  Only one 90-day period may be invoked per lawsuit, and the 90-day 
period does not delay any injunctive relief--a plaintiff may 
immediately file for a temporary restraining order or any other type of 
injunctive relief.
  The purpose of this section is to give both parties an opportunity to 
focus on identifying and then correcting any Y2K problems quickly and 
efficiently.
  The bill also provides for proportionate liability in many cases, so 
that defendants are punished according to their fault, and not 
according to their ``deep pockets.''
  Under our current system of joint and several liability, a defendant 
found to be only twenty, ten or even one percent at fault can 
nonetheless be forced to pay 100 percent of the damages.
  This system often encourages plaintiffs to go after ``deep pocket'' 
defendants first, in order to force a quick settlement.
  I believe that this system is fundamentally unfair, and I am pleased 
to say that this bill eliminates joint and several liability in many 
Y2K cases.
  Under the new system, defendants will be responsible only for that 
portion of damages that can be attributed to them.
  However, the bill does have several specific exceptions to the 
elimination of joint and several liability.
  First, any plaintiff worth less than $200,000 and suffering harm of 
more than 10 percent of that net worth may recover against all 
defendants jointly and severally. This exception in the bill protects 
those plaintiffs with a low net worth, but will not unduly injure 
defendants because the damages recovered will not be great.
  Second, any defendant who acts with an intent to injure or defraud a 
plaintiff loses the protections under this bill and is again subject to 
joint and several liability. We do not want to protect those acting 
with an intent to harm.
  Finally, the original Senate bill provided a compromise for those 
cases in

[[Page S8035]]

which certain defendants are ``judgement-proof.'' In cases where a 
plaintiff cannot recover from certain defendants, the other defendants 
in the case would each liable for an additional portion of the damages. 
However, in no case could a defendant be forced to pay more than 150 
percent of its level of fault. The Conference Committee increased that 
cap to 200 percent, making it even easier for plaintiffs to recover the 
fullest possible extent of their damages.
  The Conference Committee also inserted provisions in the bill, at the 
request of the White House, that will allow any individual consumer to 
recover jointly and severally against defendants for any share of 
damages that are uncollectible from other, judgment-proof defendants.
  And for Y2K class action suits, the bill requires that a majority of 
plaintiffs have suffered some minimal injury, in order to avoid cases 
in which thousands of unknowing plaintiffs are lumped together in an 
attempt to force a quick settlement.
  The bill moves many Y2K class actions into federal court for purposes 
of uniformity, but at the request of the White House the Conference 
Committee increased the threshold to get to federal court from the one 
million dollar level found in the Senate bill to ten million now. 
Furthermore, the number of required plaintiffs required to move a class 
action to federal court has been doubled from fifty to one hundred.
  And the punitive damages section, which has been severely curtailed 
since early versions of the bill, now caps punitive damages for small 
businesses only--to $250,000 or three times compensatory damages, 
whichever is lesser.
  Another change made to the bill in Conference exempts most 
intentional torts from the limits on recovery for economic loss.
  Finally, the conference report provides that state laws on 
unconscionability will not apply to cases in which individual terms 
within a contract should not be enforced--a move further protecting the 
plaintiff's right to recover.
  Each of the changes made before and during the Conference Committee 
negotiations has narrowed the focus and effect of the bill, while still 
maintaining the bill's clear intent to allow companies to prevent, 
solve and remediate Y2K problems without undue delay stemming from 
frivolous lawsuits and meritless claims.
  The ``one trillion dollar litigation headache'' is rapidly 
approaching, and this Congress can provide some preventative medicine 
and some anticipatory pain relief in the form of the reasoned, fair, 
and thoughtful compromise before us.
  The bill sets forth clear rules to be followed in all Y2K cases, and 
the bill levels the playing field for all parties who will be involved 
in Y2K suits--plaintiffs and defendants.
  Companies and individuals alike will know the rules, and will know 
what they have to do. And most importantly, the stability that will 
come from this bill will allow companies to prevent Y2K problems when 
possible, fix Y2K defects when necessary, and proceed to remediation of 
damages in an orderly and fair manner.
  This bill has been through a tortuous legislative drafting process, 
with criticisms, suggestions and changes made from every side and by 
every sector of our society.
  So let us pass this conference report today, let us send it to the 
President, and let us show this nation that the Y2K crisis will not 
cripple our courts, will not disrupt our economy, and will not put a 
halt to the technology engine driving our progress towards the twenty-
first century.
  Mr. LOTT. Mr. President, as the Senate prepares to vote on the 
Conference Report on H.R. 775, the Y2K Act, I want to praise the 
bipartisan efforts of so many Senate and House Members who have worked 
diligently to construct an effective, fair bill that will address the 
important issue of liability as it relates to the possible Year 2000--
or Y2K--computer problems. This has been a group effort, teaming 
members on both sides of the aisle with the private sector. The 
coalition of high technology businesses, large businesses, small 
businesses, and others provided the initiative and momentum that pushed 
this bill across the finish line.
  This bill is constructive, positive legislation. It allows companies 
in the information technology industry to focus their limited resources 
on solving Y2K related problems in computer software by preventing 
frivolous litigation. Litigation which would divert those limited 
resources away from solving Y2K programming deficiencies.
  Mr. President, so many Senators and their staffs have worked to 
insure the success of this legislation, even when faced with difficult 
hurdles and odds. The efforts of Senator McCain, Senator Wyden, Senator 
Gorton, Senator Bennett, Senator Dodd, Senator Hatch, Sentor Feinstein 
and others, along with the efforts of the House sponsors and conferees, 
have brought us to this point.
  Mr. President, I am pleased that the House has passed this important 
bill today by a vote of 404-24. With only 183 days left until the globe 
turns the page on the calendar to a new century and a new millennium, I 
urge my colleagues to vote for this important bill. I am confident that 
this Conference Report will pass the Senate by a wide margin, just as 
in the House, and I urge the President to sign this bill into law when 
he receives it.
  Mr. HOLLINGS. Mr. President, we have some demands on this side of the 
aisle and some obligations.
  I yield back the remainder of our time.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Mr. President, I congratulate the Senator from South 
Carolina for his spirited and impassioned defense of his position. It 
is a great privilege to do combat with him, both in the committee and 
on the floor. I appreciate his eloquence as always. Since this time I 
believe we have the votes, I yield back the remainder of my time.
  Mr. HOLLINGS. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. All time having been yielded back, the 
question is on agreeing to the conference report. The yeas and nays 
have been ordered. The clerk will call the roll.
  The legislative assistant called the roll.
  Mr. NICKLES. I announce that the Senator from Alaska (Mr. Murkowski) 
is necessarily absent.
  The result was announced--yeas 81, nays 18, as follows:

                      [Rollcall Vote No. 196 Leg]

                                YEAS--81

     Abraham
     Allard
     Ashcroft
     Baucus
     Bayh
     Bennett
     Bingaman
     Bond
     Boxer
     Brownback
     Bryan
     Bunning
     Burns
     Byrd
     Campbell
     Chafee
     Cleland
     Cochran
     Collins
     Conrad
     Coverdell
     Craig
     Crapo
     Daschle
     DeWine
     Dodd
     Domenici
     Dorgan
     Enzi
     Feinstein
     Fitzgerald
     Frist
     Gorton
     Graham
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Harkin
     Hatch
     Helms
     Hutchinson
     Hutchison
     Inhofe
     Inouye
     Jeffords
     Kennedy
     Kerrey
     Kerry
     Kohl
     Kyl
     Lautenberg
     Lieberman
     Lincoln
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Mikulski
     Moynihan
     Murray
     Nickles
     Reed
     Robb
     Roberts
     Roth
     Santorum
     Schumer
     Sessions
     Smith (NH)
     Smith (OR)
     Snowe
     Stevens
     Thomas
     Thompson
     Thurmond
     Voinovich
     Warner
     Wyden

                                NAYS--18

     Akaka
     Biden
     Breaux
     Durbin
     Edwards
     Feingold
     Hollings
     Johnson
     Landrieu
     Leahy
     Levin
     Reid
     Rockefeller
     Sarbanes
     Shelby
     Specter
     Torricelli
     Wellstone

                             NOT VOTING--1

       
     Murkowski
       
  The conference report was agreed to.
  Mr. LOTT. Mr. President, I move to reconsider the vote, and I move to 
lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The majority leader is recognized.

                          ____________________