[Congressional Record (Bound Edition), Volume 145 (1999), Part 11]
[House]
[Pages 14975-14984]
[From the U.S. Government Publishing Office, www.gpo.gov]




 CONFERENCE REPORT ON H.R. 775, YEAR 2000 READINESS AND RESPONSIBILITY 
                                  ACT

  Mr. GOODLATTE. Mr. Speaker, pursuant to House Resolution 235, I call 
up the conference report on 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.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore (Mr. LaHood). Pursuant to House Resolution 
234, the conference report is considered as having been read.
  (For conference report and statement, see proceedings of the House of 
June 29, 1999 at page H5066.)
  Mr. LaHOOD. The gentleman from Virginia (Mr. Goodlatte) and the 
gentleman from Michigan (Mr. Conyers) each will control 30 minutes.
  The Chair recognizes the gentleman from Virginia (Mr. Goodlatte).


                             General Leave

  Mr. GOODLATTE. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks and to include extraneous material on the legislation under 
consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Virginia?
  There was no objection.
  Mr. GOODLATTE. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, today is day 182 of 1999, half way through the year.

                              {time}  1330

  Over the past 6 months, Congress has climbed the mountain of Y2K 
liability reform legislation, and as we stand at the legislative 
summit, ready to pass legislation that Republicans, Democrats and the 
White House can support, we can only hope that our work will help those 
who are climbing an ever-larger mountain, those who are trying to fix 
their Y2K bugs before they hit.
  Our job is now done. For the next 6 months, we can only hope that 
this legislation, which will greatly reduce the threat of frivolous Y2K 
lawsuits, will allow our Nation's businesses to pour their energies 
into avoiding Y2K failures instead of planning their Y2K legal 
defenses.
  Frankly, I did not think that this moment would actually arrive. Just 
last week, we stood here facing the wide gulf of a weaker Senate-passed 
bill. We faced an even wider gulf with the White House which, up until 
last week, was nowhere to be seen in the negotiations and was backing 
badly defeated Senate proposals that provided nothing but smoke and 
mirrors for addressing the Y2K problem. Fortunately, all parties 
eventually realized that compromise is an essential part of successful 
legislating. Both the House and the White House moved significantly 
from their original positions to reach an agreement closely resembling 
the Senate-passed legislation.
  The final conference report is a model of compromise. Not only did 
the White House get many of the concessions it sought, but the core 
pieces of the House-passed legislation remain firmly in place. Caps on 
punitive damages, reform of class action lawsuits, proportionate 
liability, a 90-day waiting period, and contract preservation all 
remain in this legislation.
  Mr. Speaker, I want to congratulate all those who have worked hard 
over the past week and over the past 6 months to make this bill happen. 
I want to commend my colleagues who worked on this, including the 
sponsor of the bill, the gentleman from Virginia (Mr. Davis), the 
gentleman from California (Mr. Dreier), the gentleman from California 
(Mr. Cox), the gentleman from Wisconsin (Mr. Sensenbrenner) and the 
Democratic sponsors, the gentleman from Virginia (Mr. Moran), the 
gentleman from California (Mr. Dooley) and the gentleman from Alabama 
(Mr. Cramer). I also want to thank Senators McCain, Hatch and the other 
Senate conferees for working so hard to get a good piece of legislation 
that the White House would sign.
  Finally, I want to commend the House and Senate personal and 
committee staffs on both sides of the aisle who worked so hard to make 
this legislation happen. They are to be commended for a job well done.
  Mr. Speaker, this conference report is a victory for small businesses 
and a victory for consumers. One hundred eighty-two days down and 183 
to go, now Americans can begin the homestretch in their efforts to keep 
the Y2K problem from becoming a reality.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CONYERS. Mr. Speaker, I yield myself such time as I may consume.
  I want to stand here today to congratulate the gentleman from 
Virginia (Mr. Goodlatte) on the committee; the gentleman from Virginia 
(Mr. Davis), who has put this bill before us and brought it to our 
attention; and all of those in this House and in the other body who 
have helped make this a day that a conference report can be brought to 
the floor for support. It represents a marked improvement over the 
House-passed version of the bill of which I was not able to support in 
the House form. The bill was improved first in the Senate at the 
insistence of many Democrats and again in conference at the insistence 
of the administration.
  As has been suggested, a lot of work went into this, including 
members of the staff, and I think we now have a bill, though far from 
perfect and despite some last-minute drafting glitches, I believe it 
will achieve the purpose of allowing high-tech companies to focus on 
the fixing of the Y2K problem without trampling on consumer rights.
  I am glad the administration met with the conferees over the past 
weekend to achieve this compromise. Had we taken up the Senate-passed 
bill as some in this body were proposing, we would be facing a 
drastically worse bill which would surely have faced a presidential 
veto. More importantly, I can support this legislation because it 
represents a one-time Federal response to a unique nationwide problem 
relating to possible year 2000 computer failures and does not serve in 
any way as precedent for broader-ranging changes in our tort laws. In 
addition, the bill will have no force or effect with respect to actions 
stemming from any harm occurring after January 1, 2003.
  In my judgment, the final conference report is far closer in text and 
in spirit

[[Page 14976]]

to the Democratic substitute offered by the gentlewoman from California 
(Ms. Lofgren), the gentleman from Virginia (Mr. Boucher) and myself, 
which received 190 votes here in the House, than it is to the more 
extreme bill that was originally passed by the House.
  The conference report improves upon the House-passed bill in a number 
of respects. First, it deletes the so-called reasonable defense effort. 
Under this defense, of course, a defendant who was grossly negligent 
could completely avoid liability as long as he took minimal steps to 
fix the problem, even if these efforts did not result in a cure and 
caused substantial damages.
  It also deletes the ``loser pays'' defense requiring a litigant to 
pay the other side's attorneys fees if they rejected a pretrial 
settlement and ultimately obtained a less favorable verdict. The 
provision would operate as a tremendous disincentive to small 
businesses and poor and middle-class victims of Y2K failures because 
they have far less financial resources and cannot afford the risk of 
paying a large corporation's legal fees based on the outcome of a 
trial.
  The conference report also significantly narrows the doctrine of 
joint and several liability limitation. The House bill, my colleagues 
will recall, would have wiped out the doctrine of joint and several 
liability. Fortunately, the conference report excludes individual 
consumers from this limitation and incorporates several changes 
designed to protect innocent plaintiffs and help ensure that ``bad 
actors'' are not rewarded.
  Finally, the conference report significantly narrows the bill's 
punitive damages limitations. The Committee on the Judiciary reported a 
bill that would have prevented any plaintiff from ever receiving 
punitive damages in a Y2K action. The conference report is far fairer 
and caps punitive damages at the lesser of three times the compensatory 
damages or $250,000 and only applies caps to small business defendants.
  So although the legislation is not perfect, on balance I believe it 
will help protect the Nation's high-tech community against frivolous 
lawsuits and encourage businesses to remedy their Y2K problems without 
unduly infringing on the rights of small business and individual 
plaintiffs.
  Mr. Speaker, I include for the Record a letter from John Podesta to 
myself dated June 30, 1999, as well as a section-by-section description 
of the Y2K conference report, as follows:

                                              The White House,

                                        Washington, June 30, 1999.
     Re H.R. 775--the Year 2000 Readiness and Responsibility Act.
     Hon. John Conyers, Jr.,
     House of Representatives,
     Washington, DC.
       Dear Representative Conyers: 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.
                                  ____


        Section by Section Description of Y2K Conference Report

       Section 1. Short Title; Table of Sections.--Sets forth the 
     title and table of contents.
       Section 2. Findings and Purposes.--Sets forth a variety of 
     findings designed to establish a constitutional nexus for the 
     legislation.
       Section 3. Definitions.--Among other definitions, this 
     section defines a ``Y2K action'' as any civil action in which 
     the alleged harm arises from or is related to an actual or 
     potential Y2K failure.
       This reflects a change suggested by the White House which 
     deletes language which would have permitted the bill to apply 
     to lawsuits which only indirectly involved Y2K actions.
       Section 4. Application of Act.--This includes nine separate 
     subsections. The most important provisions are as follows:
       (a) General Rule.--Act only applies to Y2K failures which 
     occur before January 1, 2003.
       This means that the bill represents a one time change in 
     tort and contract related actions limited to harm caused 
     during a narrow three year window. This represents a critical 
     improvement over the House passed bill which had no 
     termination date.
       (c) Claims for Personal Injury or Wrongful Death 
     Excluded.--Specifies that the bill does not apply to claims 
     for personal injury or wrongful death.
       This reflects an improvement over the House passed bill 
     which only excluded personal injury claims. The existence of 
     this important carve out in the bill illustrates that the Y2K 
     problem presents a unique one time issue, and the legislative 
     response should not apply to ordinary consumers suffering 
     personal injuries. In this respect, it cannot be seen as a 
     precedent for broader tort reforms.
       (d) Warranty and Contract Preservation.--Specifies that 
     contract terms shall be strictly enforced, unless such 
     enforcement is inconsistent with state statutory law, or the 
     state common law doctrine of unconscionability, including 
     adhesion, in effect on January 1, 1999.
       This is a variation of a provision originally included in 
     the House Democratic substitute (offered by Reps. Lofgren, 
     Boucher, and Conyers). Preserving state laws concerning 
     unconscionability and adhesion reflects an important change 
     suggested by the White House.
       (g) Application to Actions Brought by a Government 
     Entity.--This provision provides limited relief from 
     penalties for Y2K related reporting or monitoring violations. 
     Because the provision is limited to a defense to penalties, 
     the government would be allowed to seek injunctive relief to 
     require compliance and to correct violations. In addition, 
     the defendant would have to show, among other things, that 
     the noncompliance was both unavoidable in the face of an 
     emergency directly related to a Y2K failure and necessary to 
     prevent the disruption of critical functions or services that 
     could result in harm to life or property. Other safeguards 
     further limit the applicability of the defense. For example, 
     the defendant would not obtain the benefit of the defense if 
     the reporting or monitoring violations constitute or would 
     create an imminent threat to public health, safety, or the 
     environment. The defendant would also be required to 
     demonstrate that it previously made a reasonable good faith 
     effort to anticipate, prevent and effectively correct a 
     potential Y2K failure; that it has notified the agency within 
     72 hours of the violation; and that it has fixed it within 15 
     days. The defense does not apply to any reporting or 
     monitoring violations occurring after June 30, 2000.
       Many of the safeguards against misuse of this defense were 
     added at the insistence of the White House. Absent these 
     changes, the Senate bill could have provided corporate 
     polluters and others responsible for health and safety 
     requirements with complete defenses to these reporting or 
     monitoring violations.
       (h) Consumer Protection From Y2K failures.--Ensures that 
     homeowners cannot be foreclosed on due to a Y2K failure.
       This provision did not appear in the House passed bill or 
     the House Democratic substitute. The Senate passed language 
     was modified in conference to limit the provision's 
     applicability to residential mortgages, to require consumers 
     to provide notice of the Y2K failure and their inability to 
     pay, and to limit the applicability to transactions occurring 
     between December 16, 1999 and March 15, 2000.
       (i) Applicability to Securities Litigation.--Specifies 
     that, other than the bystander liability provisions (section 
     13(b)), the bill does not apply to securities actions.

[[Page 14977]]

       Many of the bill's restrictions only make sense in the 
     context of ordinary tort or contract suits, not securities 
     actions which Congress has reformed twice in recent years. 
     This improvement was suggested by the White House.
       Section 4 also includes technical subsections specifying 
     that the bill does not create a new cause of action; only 
     preempts state law to the extent it establishes a rule that 
     is inconsistent with state law; and does not supersede 
     legislation concerning Y2K disclosure passed on a bipartisan 
     basis last year.
       Section 5. Punitive Damage Limitations.--Provides that 
     defendants shall not be subject to punitive damages unless 
     such damages are proved by ``clear and convincing evidence.'' 
     Also caps punitive damages against ``small businesses'' at 
     the lesser of 3 times compensatory damages or $250,000. 
     ``Small business'' is defined as individuals having a net 
     worth of less than $500,000 and businesses with fewer than 50 
     employees. The cap does not apply where the defendant acted 
     with specific intent to injure.
       This reflects a significant improvement over the House 
     passed bill which would have capped punitive damages against 
     all defendants, regardless of their size; and the House 
     Judiciary Committee approved bill which would have completely 
     eliminated the plaintiff's ability to recover any punitive 
     damages.
       Section 6. Proportionate Liability.--Sets forth a general 
     rule that defendants are liable only for their proportionate 
     share of liability (in lieu of the common law rule of joint 
     and several liability applicable in some states). This 
     general rule does not apply in cases where the defendant 
     acted with specific intent to injure the plaintiff or 
     knowingly committed fraud. In addition, if portions of the 
     plaintiff's damage claim ultimately prove to be 
     uncollectible, and the plaintiff is an individual with a net 
     worth of less than $200,000 (a so called ``widow or orphan'') 
     and damages are greater than 10% of a plaintiff's net worth, 
     a solvent defendant is responsible for paying an additional 
     100% share of their liability, or an additional 150% of this 
     amount if they acted with ``reckless disregard for the 
     likelihood that its acts would cause injury.'' Also, the 
     general proportionate liability rule does not apply to suits 
     by consumers who sue individually rather than as part of a 
     larger class (brought on behalf of ten or more individuals). 
     Although the section is one-way preemptive of state law, it 
     is not intended to allow a defendant to assert that it is 
     subject to some but not other subsections.
       This provision is somewhat similar in operation to a 
     section included in the House Democratic substitute which 
     gave the court discretion to avoid joint and several 
     liability depending on the defendant's overall conduct and 
     share of liability. The exceptions to the general rule of 
     proportionate liability reflect changes suggested by the 
     White House to make sure that ordinary consumers were 
     protected and so-called ``bad actors'' were not rewarded. 
     This represents an effort to encourage remediation which, of 
     course, is unique to the Y2K problem. The final provisions 
     represent an improvement over the House passed bill which 
     would have eliminated joint and several liability in 
     virtually all cases.
       Section 7. Prelitigation Notice.--Y2K actions would not be 
     permitted to proceed to trial until the defendant has had an 
     opportunity to fix the Y2K failure within 90 days after 
     receiving notice in writing with the problem described with 
     particularity. The 90 day period includes an initial 30 day 
     notice period, and a subsequent 60 day period in which to 
     remedy the defect.
       This provision is substantially identical to the House 
     Democratic substitute.
       Section 8. Pleading Requirements.--Requires greater 
     specificity in the notice of damages sought in Y2K actions; 
     the factual basis for the damages claim; a statement of 
     specific information regarding the manifestations of the 
     material defect and the facts supporting such material 
     defect; and a statement of facts showing a strong inference 
     that defendant acted with a required state of mind.
       This provision is substantially identical to the House 
     Democratic substitute.
       Section 9. Duty to Mitigate.--Provides that damages awarded 
     in Y2K actions exclude compensation for damages the plaintiff 
     could reasonably have avoided in light of any disclosure or 
     other information of which the plaintiff was or reasonably 
     should have been aware. This limitation on damages does not 
     apply where the defendant has engaged in fraud.
       This provision is similar to a provision included in the 
     House Democratic substitute. It includes a suggestion made by 
     the White House that the protection not apply to so-called 
     fraudulent ``bad actors.'' Again, this is an effort to 
     encourage remediation by all parties, which is a unique issue 
     to Y2K liability.
       Section 10. Application of Existing Impossibility or 
     Commercial Impracticability Doctrines.--Freeze state law on 
     these doctrines as of January 1, 1999.
       This provision represents an effort to insure that states 
     do not alter their laws to take advantage of the Y2K problem 
     to make it easier to bring suits against ``deep pocket'' Y2K 
     defendants. This provision is substantially identical to a 
     provision included in the House Democratic substitute.
       Section 11. Damages Limitations by Contract.--Provides 
     that, in Y2K contract actions, damages are limited to those 
     provided in the contract, or, if the contract is silent, to 
     those provided under state law.
       This provision was not included in the House passed bill or 
     the House Democratic substitute.
       Section 12. Damages in Tort Claims.--Codifies the so-called 
     ``economic damages'' rule, which prohibits tort plaintiffs 
     from seeking economic or consequential damages (e.g., lost 
     profits stemming from a Y2K failure) unless such damages are 
     permitted by contract. This rule does not apply in cases of 
     intentional torts arising independent of a contract.
       This reflects a variation of a suggestion by the White 
     House to protect persons who have claims for separately 
     cognizable torts, such as some forms of fraud. This is 
     similar to a provision included in the House Democratic 
     substitute.
       Section 13. State of Mind; Bystander Liability; Control.--
     Subsection (a) freezes state law concerning the standard of 
     evidence needed to establish defendant's state of mind in a 
     tort action (e.g., negligence) as of January 1, 1999. 
     Subsection (b) provides that Y2K service providers are not 
     liable to third parties who are not in privity with them 
     unless the defendant actually knew, or recklessly disregarded 
     a known and substantial risk, that a Y2K failure would occur. 
     This would make it more difficult for a customer of business 
     that was certified to be Y2K compliant to sue the consultant 
     who so certified. Subsection (c) provides that the fact that 
     a Y2K failure occurred in an environment within the control 
     of the defendant shall not be permitted to constitute a sole 
     basis for the recovery of damages.
       Other than bystander liability, these provisions were not 
     included in the House passed bill or the House Democratic 
     substitute.
       Section 14. Appointment of Special Masters or Magistrate 
     Judges for Y2K Actions.--Includes a technical change which 
     would merely authorize federal courts to appoint special 
     masters to consider Y2K matters.
       This provision was not included in either the House passed 
     bill or the House Democratic substitute.
       Section 15. Y2K Actions as Class Actions.--Subsection (a) 
     only permits class actions involving material product 
     defects. Subsection (b) requires class members to receive 
     direct notices of class actions (which shall include 
     information on the attorney's fee arrangements).
       Subsection (a) is substantially identical to a provision 
     included in the House Democratic Substitute.
       Subsection (c) places all Y2K class actions in federal, 
     rather than state court. The only exceptions are where (1) a 
     substantial majority of members of the plaintiff class are 
     citizens of a single state, the primary defendants are 
     citizens of that state, and the claims asserted will be 
     governed primarily by the laws of that state; (2) the primary 
     defendants are states or state officials; (3) the plaintiff 
     class does not seek an award of punitive damages and the 
     amount in controversy is less than $10 million; or (4) there 
     are less than 100 members of the class. The burden is on the 
     plaintiff to establish that any of these four exceptions 
     apply.
       The idea behind this provision is that Y2K actions are 
     inherently interstate and the problem is uniquely nationwide 
     and federal in its source and impact. This provision 
     incorporates some White House suggestions that safeguards be 
     built into the rule to allow some class actions which have a 
     state focus be permitted to be brought in state court.
       Section 16. Applicability of State Law.--Specifies that the 
     bill does not supercede any state law with stricter damage 
     and liability limitations.
       This provision was not included in either the House passed 
     bill or the House Democratic substitute.
       Section 17. Admissible Evidence Ultimate Issue in State 
     Courts.--Applies Rule 704 of the Federal Rules of Civil 
     Procedure (concerning the use of expert testimony) to State 
     courts.
       This provision was not included in either the House passed 
     bill or the House Democratic substitute.
       Section 18. Suspension of Penalties for Certain Y2K 
     Failures by Small Business Concerns.--This section provides 
     for civil penalty waivers for first-time violations by a 
     small business (50 employees or fewer) of federally 
     enforceable rules or requirements that are caused by a Y2K 
     failure. In order to obtain a waiver, small business must 
     meet certain strengthened standards, including, among other 
     things, that it made a reasonable good faith effort to 
     anticipate, prevent and effectively remediate a potential Y2K 
     failure; that the first-time violation occurred as a result 
     of a Y2K failure significantly affecting its ability to 
     comply and was unavoidable in the face of a Y2K failure; that 
     the small business initiated reasonable and prompt measures 
     to correct the violation, notified the agency within 5 
     business days, and corrected the violation within a month of 
     notification.

[[Page 14978]]

       As was the case with section 4(g), the Administration 
     insisted on developing common sense safeguards so that the 
     provision would not create new health, and environmental 
     problems. For example, the Administration obtained changes 
     that clarified that it is the government that determines 
     whether a small business meets the standards for a civil 
     penalty waiver; that an agency may impose a civil penalty if 
     the noncompliance resulted in actual harm (in addition to 
     creating an imminent threat to public health, safety, or the 
     environment); and that the civil penalty waiver does not 
     apply to any violations occurring after December 31, 2000.
       The following anti-consumer provisions were dropped 
     entirely by the Conference from the Republican bill approved 
     by the House.


  a. reasonable efforts defense for defendants (Section 303 of House 
                              passed bill)

       Under the so-called ``reasonable efforts'' defense in the 
     original House passed bill, the fact that a defendant took 
     reasonable measures to prevent the Y2K-related failure was a 
     complete defense to liability. Thus, despite the defendant's 
     level of fault, if it made reasonable efforts to fix the 
     problem--even if those efforts did not result in a cure--it 
     would have had no responsibility for damages suffered by the 
     plaintiff. Even if a defendant takes only minimal steps to 
     remedy a Y2K problem, it would have served as a complete 
     defense against a tort action, thereby undercutting 
     incentives to prepare for and prevent Y2K errors. The defense 
     was so broad it would even cover intentional wrongdoing or 
     fraud, so long as the misconduct was eventually papered over 
     by some sort of post-hoc reasonable effort.


 b. limits the liability of corporate officers and directors (section 
                       305 of house passed bill)

       The original House passed bill also capped the personal 
     liability of corporate directors and officers at the greater 
     of $100,000 or their past 12-months' compensation. This 
     provision was unnecessary because under current law the 
     ``business judgment rule'' already insulates officers and 
     directors from liability for their business decisions as long 
     as they acted reasonably in governing the affairs of the 
     corporation. The provision also would have protected 
     irresponsible and reckless Y2K behavior.


    c. loser pays and fee disclosure (title v of house passed bill)

       The House passed bill also included a ``loser pays'' (or 
     ``English Rule'') provision requiring a litigant to be liable 
     to pay the other side's attorneys fees if they rejected a 
     pre-trial settlement offer and ultimately secured a less 
     favorable verdict. Because small businesses and individuals 
     have far less financial resources than large defendant 
     corporations and cannot afford the risk of paying a large 
     corporation's legal fees based on the outcome of a trial, the 
     provision would have operated as a tremendous disincentive to 
     small businesses and poor and middle class victims of Y2K 
     failures. The provision was so onerous that it would even 
     apply to a harmed party that prevails in a Y2K action so long 
     as they obtained less than a pre-trial settlement--in this 
     respect it could actually operate as a ``winner pays'' 
     provision. The bill also included a number of procedural 
     restrictions that would have governed the attorney-client 
     relationship--such as the requirement that attorneys disclose 
     to their clients the fee arrangement up-front, and the 
     requirement that attorneys provide a monthly statement to 
     clients regarding the hours and fees spent on the case. The 
     original House Republican bill also would have regulated 
     attorneys fees for plaintiffs (but not defendants) in Y2K 
     actions.

  Mr. Speaker, I reserve the balance of my time.
  Mr. GOODLATTE. Mr. Speaker, I am pleased to yield 1 minute to the 
gentleman from California (Mr. Royce).
  Mr. ROYCE. Mr. Speaker, as the clocks move forward on December 31, 
there is a strong likelihood that some computers will fail to recognize 
the year 2000, instead rolling back to January 1, 1900. A Y2K-initiated 
computer crash could have disastrous impacts on many aspects of daily 
life, ranging from transportation and aviation, data processing, health 
care and financial services. Indeed, American society could be 
confronted by an extended period of technological and economic duress.
  Instead of taking a proactive approach to solving the Y2K problem, 
many businesses, large and small, find themselves expending time and 
energy on liability issues. This bipartisan legislation, of which I am 
an original cosponsor, addresses this concern and creates incentives 
for businesses to address the impending Y2K problem by creating a legal 
framework by which Y2K-related results will be resolved.
  We must not permit a climate to foster in which businesses, paralyzed 
by fear of unrestrained lawsuits, fail to take action that would 
adequately address this problem.
  Mr. GOODLATTE. Mr. Speaker, I am pleased to yield 5 minutes to the 
gentleman from Wisconsin (Mr. Sensenbrenner), a member of the 
conference committee and a senior member of the Committee on the 
Judiciary.
  Mr. SENSENBRENNER. Mr. Speaker, I rise today in support of the 
conference report to H.R. 775, the Y2K Act. This bill, while markedly 
different from when it was first introduced, has retained several key 
core principles: The establishment of uniform legal standards for all 
businesses and users of computer-related technologies; the 
encouragement of alternative dispute resolution to avoid costly and 
time-consuming lawsuits; the lessening of the burden on interstate 
commerce by discouraging frivolous lawsuits while preserving the 
ability of individuals and businesses who have suffered injury to 
obtain relief.
  The year 2000 computer problem, commonly referred to as the Y2K bug, 
presents grave challenges to both the private and public sectors 
throughout the United States. H.R. 775 has had a difficult history in 
Congress. Substantial changes were made during every step of the 
process, in committees, on the House floor, in the other body, and 
finally in conference committee in an effort to deal with this pressing 
issue in a way that is fair and equitable to all parties involved, both 
potential plaintiffs and defendants in Y2K-related disputes.
  The reason we are here today is because of the persistence of the 
House and the other body to enact legislation far enough in advance of 
the year 2000 to stem the potential litigation explosion over the Y2K 
bug, one that has been estimated as costing our economy a potential $1 
trillion. Throughout this whole process, the administration has 
remained cool to the idea of passing any legislation dealing with Y2K 
liability. In addition, the administration was noticeably absent at 
every junction of this debate.
  The White House was invited to testify before the House Committee on 
the Judiciary on this legislation but declined. Instead of active 
participation, the administration chose to issue veto threats to even 
the amended bipartisan Senate-passed version of the bill with only 
general descriptions on which provisions they found to be 
objectionable. In all, the administration sent five veto threats, with 
the fifth being issued on June 24 by the President's chief of staff 
just prior to the conferees meeting on that day.
  At the first meeting of the House-Senate conference, the House 
conferees accepted the Senate amendments to H.R. 775 and added two 
additional amendments. It was at this conference after the train had 
already left the station that the White House finally got serious and 
requested additional time to work out a compromise. The chairman of the 
conference postponed further proceedings until the drop-dead date of 
June 28 in a good-faith effort to see this bill enacted without the 
potential of a White House veto. Finally, the administration gave 
specifics on what they found to be objectionable and suggestions on how 
to change these provisions in order for the President to support it.
  Fortunately, the administration's differences with Congress were 
resolved, which allows the conference report to be brought to the floor 
today without the uncertainty of a veto. The conference report has the 
support of the broad-based Year 2000 Coalition and the Information 
Technology Industry Council.
  The conference report includes the following key provisions which 
warrant its adoption by the House of Representatives:
  It allows class action suits for Y2K claims to be brought into 
Federal courts if they involve $10 million in claims or at least 100 
plaintiffs. It creates a proportionate liability formula for assessing 
blame so companies would be penalized for their share of any Y2K 
damage. This formula would make whole individual consumers even if one 
of the defendants went bankrupt. It caps punitive damages at $250,000, 
or three times the amount of compensatory damages, whichever is less, 
for

[[Page 14979]]

individuals with a net worth of up to $500,000 and for companies with 
fewer than 50 employees. And it applies current State standards for 
establishing punitive damages instead of creating a new preemptive 
Federal standard.
  In addition, the conference report requires plaintiffs to mitigate 
damages, defines the term ``economic loss,'' but does not place caps on 
directors and officers liability.
  In summary, while H.R. 775 has been whittled down by the 
administration's efforts to accommodate trial lawyers, enough 
substantial provisions remain to warrant support by the House of 
Representatives.

                              {time}  1445

  Ms. LOFGREN. Mr. Speaker, I yield 4 minutes to the gentlewoman from 
Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I thank the distinguished 
gentlewoman from California.
  Let me just as a manner and focus on the proceedings that we have had 
over these past couple of months.
  As a Member of the House Committee on Science and the House Committee 
on the Judiciary, I have had the privilege of sitting through a number 
of hearings, I particularly want to thank the gentlewoman from Maryland 
(Mrs. Morella) for carrying on with such informative hearings on the 
Y2K matters, bringing forward so many different witnesses from the 
business community, the legal community and, of course, a consumer 
community.
  Through those hearings I think I can articulate today that it has 
taken enormous amount of work to bring us to where we are at this 
juncture, and I would like to lend my thoughts and appreciation to the 
gentlewoman from California (Ms. Lofgren), the gentleman from Michigan 
(Mr. Conyers) and the gentleman from Virginia (Mr. Boucher) who did 
craft legislation in which the White House was actively engaged and did 
support and had all the elements of being able to solve the problems 
that so many of us were concerned about.
  I am disappointed that we did not prevail on that legislation, but I 
thank them for their leadership. I thank the gentleman from Virginia 
(Mr. Davis) and the gentleman from Virginia (Mr. Goodlatte) for where 
we are today, and I hope that this House will pass this bill because I 
oppose the original version of the bill, and I oppose the bill on its 
final passage, but it does not mean that we cannot try and improve it. 
I was delighted to be able to get a technical amendment passed on the 
floor of the House, but it would have been good to have had other 
improvements, and I felt the bill could have been made acceptable.
  We know there will be a Y2K situation, if my colleagues will, but I 
do not know if we can rely upon all the testimony that was presented to 
establish it as a precedent for changing all of the tort laws of this 
Nation, nor can we isolate Y2K and suggest that it has no limitations 
on the legislation that we are making.
  In particular, I am very delighted that the legislation we are 
bringing forward now has a sunset provision acknowledging the fact that 
this is a limited issue and should be isolated to a certain period of 
time. It protects the consumers by having in homeowner protection, a 
provision that protects homeowners from being evicted because of a Y2K 
failure that is imperative.
  It also responds to preventive lawsuits. A provision was added to 
allow suits before Y2K failures. We heard the testimony of a small 
grocer in Michigan who said, ``If I don't have an opportunity for 
relief before I collapse, then you've done nothing for me.''
  I also want to make it clear that I tried to remain open on the bill 
in recognition of the unique problem that it attempts to address. I 
understand the plight of many of our software developers and Y2K 
solution providers who do not want to take on additional clients 
because they fear a costly lawsuit. That is understandable. But as a 
member of the Committee on Science who has sat through numerous 
hearings on this subject, I do not feel that we need to pass open-ended 
legislation that could be used too, used by corporate America to 
protect themselves from liability that they have rightfully incurred. I 
think it is important to strike a balance.
  One of the amendments that I introduced and I truly hoped we would 
have a chance to debate on the floor was a sunset amendment, and I am 
delighted, as I indicated earlier, that a 3-year sunset provision was 
placed in the bill. Although I feel that the sunset provision in the 
bill which is actually contained in the definition section of H.R. 775 
is not as cleanly implemented as I would have liked, the provision does 
allay many of the concerns that I had about the original bill.
  But let me not be misleading. There are some concerns, the caps on 
punitive damages, and it is interesting that this would be noted in the 
context of trial lawyers. I think it is important to note that trial 
lawyers do not decide punitive damages, it is courts that do so. I hope 
we will be able to find sufficient relief in this legislation that will 
allow plaintiffs to be able to secure the relief that they need and to 
make themselves whole.
  The bill also contains modifications to the longstanding, well-
accepted court doctrine of joint and several liability. The doctrine 
was established in order to keep plaintiffs who have been wronged by 
multiple parties from having to enter into lawsuit after lawsuit 
against different defendants in order to make them whole.
  We should consider these issues as we monitor this legislation, but 
thankfully, however, the version that has come back to us from the 
conference committee contains a more narrow set of joint and several 
liability modifications. Included in the new version is a clause which 
protects consumers who are innocently victimized by Y2K solution 
providers who act in bad faith.
  It is my hope that the definitional structure of what will constitute 
a Y2K action for the purpose of these lawsuits, along with the sunset 
provision, will help balance between the consumer and, of course, our 
providers.
  I urge my colleagues to vote for this conference report. I want to 
thank all those who brought us to the table of resolution, and I want 
to acknowledge the White House was intimately and actively involved. 
They just wanted to come down, as we all did, on the side of a very 
good bill. I am watching and monitoring as well, as I indicate as we 
all are, for the Y2K event, but I hope that we will watch it together 
being reflective of the fact that we voted today for a solution that 
would help us move into the 21st century with the minimum amount of 
concern.
  Mr. Speaker, I rise to speak in support of this Conference Report, 
but first I would like to thank the Conferees who worked very hard to 
find a compromise on certain key issues raised in this bill.
  At the outset, let me say that I opposed the version of this bill 
that was introduced in the House. I opposed the version that came out 
of the Judiciary Committee. And I opposed the bill on final passage. 
But that does not mean that I did not try to improve the bill at every 
stage. I was able to pass a technical amendment on the floor of the 
House, but there were other improvements that I would have preferred to 
have made--that I felt would make the bill much more acceptable.
  I also want to make clear that I tried to remain open this bill--in 
recognition of the unique problem that it attempts to address. I 
understand the plight of many of our software developers, and Y2K 
solution providers who do not want to take on additional clients 
because they fear a costly lawsuit. That is understandable. But as a 
Member of the Committee on Science who has sat through numerous 
hearings on this subject, I do not feel that we needed to pass open-
ended legislation that could be used by corporate America to protect 
themselves from liability that they have rightfully incurred.
  One of the amendments that I introduced, and that I truly hoped we 
would have a chance to debate on the floor, was a sunset amendment. I 
am happy to hear that a three-year sunset provision was placed in this 
bill in conference. Although I feel that the sunset provision in the 
bill, which is actually contained in the definitions section of H.R. 
775, is not as cleanly implemented as I would like, the provision does 
allay many of the concerns I have about the original bill.
  But let me not be misleading--the bill still contains dangerous 
measures. It still retains caps on punitive damages, but the caps only

[[Page 14980]]

protect small business whose net worth is less than $500,000. Large Y2K 
solution providers do not need this sort of protection--they have the 
resources to responsibly remediate Y2K problems that manifest 
themselves. This bill allows plaintiffs to hold them fully responsible, 
should they choose to behave in a manner befitting of punitive damages.
  The bill also contains modifications to the long-standing and well-
accepted court doctrine of joint and several liability. The doctrine 
was established in order to keep plaintiffs, who have been wronged by 
multiple parties, from having to enter into lawsuit after lawsuit, 
against different defendants, in order to be made whole. In the 
original version of the bill, joint and several liability was basically 
eliminated. Thankfully, however, the version that has come back to us 
from the Conference Committee contains a narrowed set of joint and 
several liability modifications. Included in the new version is a 
clause which protects consumers who are innocently victimized by Y2K 
solution providers who act in bad faith.
  It is my hope, that the definitional structure of what will 
constitute a Y2K action for the purposes of these lawsuits, along with 
the sunset provision, will contain the anti-consumer provisions 
contained in this bill. I also hope that the changes that have been 
made to the punitive damages and proportional liability sections in the 
bill keep this from becoming the bloated tort-reform bill we all feared 
when it was originally introduced.
  With that, I urge my colleagues to vote for this Conference Report, 
and to continue to work together to protect our constituents from 
discomfort stemming from the Y2K bug.
  Mr. GOODLATTE. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
Maryland (Mrs. Morella).
  Mrs. MORELLA. Mr. Speaker, I thank the gentleman for yielding this 
time to me. I rise in strong support of the conference support on the 
Y2K Act. I also want to take a moment to congratulate the gentleman 
from Virginia (Mr. Goodlatte), the gentleman from Virginia (Mr. Davis), 
the gentleman from Wisconsin (Mr. Sensenbrenner), the conferees and 
those who worked so hard on this piece of legislation. I am honored to 
be one of the cosponsors of the bill, and I am glad the conference 
committee has reached an accord with this issue.
  As my colleagues know, it was over 3 years ago that we started with 
my Committee on Science's Subcommittee on Technology and the Committee 
on Government Reform and Oversight's Subcommittee on Government 
Management, Information and Technology chaired by the gentleman from 
California (Mr. Horn) to have a complete review of the Y2K problem, and 
in the course of these hearings it became undeniably clear that the 
prevalence of potential Y2K litigation could adversely impact our 
Nation's currently robust economy and tie up our legal system long 
after the problem has been fixed in the computers, and that is why I am 
very pleased that a compromise was able to be crafted that satisfies 
the concerns of both congressional chambers and the White House to 
address the millennium bug and its legal after effects.
  The conference report reflects the changes of the High Technology 
Association's industry the Chamber of Commerce believe are necessary to 
close the floodgates of frivolous litigation and protect companies that 
have engaged in good faith remedial efforts, and it does so without 
taking away an aggrieved party's right to bring a legitimate lawsuit 
for negligent Y2K failures. This is a legislative solution that will 
ensure that the year 2000 problem does not extend well into the new 
millennium.
  I urge all of my colleagues to support the conference report. This 
will greatly assist us to be Y2K okay.
  Ms. LOFGREN. Mr. Speaker, I yield such time as she may consume to the 
gentlewoman from California (Ms. Eshoo), my colleague from Silicon 
Valley.
  Ms. ESHOO. Mr. Speaker, I thank my colleague and wonderful leader on 
this issue and so many others from the Committee on the Judiciary, the 
gentlewoman from California (Ms. Lofgren). I rise in support of the 
conference report, and I first of all want to salute everyone that has 
worked on bringing this resolution forward. I think it is a much 
improved version of the House bill. I did not support the House bill, 
and I was reluctant in doing that, and I think many people were 
surprised that I rose in opposition to it, especially because I 
represent so much of the high technology industry. I thought it was an 
effort that could be improved upon, and we have that here today, 
because after all, with the year 2000 Y2K problem, which has now become 
part of our day-to-day language across America, we wanted legislation 
that would help American business spend its time and its resources 
repairing the problem and not moving over into their legal departments 
to continually litigate it.
  This legislation provides limits on the lawsuits while providing 
redress for real damages, which is what the American people want and 
need. It encourages remediation and alternative dispute resolution over 
litigation, which I think is really fairly enlightened in an area that 
we need to build upon and do more and more with. It provides 
protections to companies that have acted in good faith while ensuring 
that bad actors will be liable for the damage they have caused.
  I want to take just a brief moment to salute my colleague in the 
other body, Senator Dodd, who has been a real leader on this issue and 
has worked on a bipartisan basis in the other body coupled with the 
hard work done, of course, with those that I have mentioned here in the 
House and finally in the White House. I am very pleased that the 
President has signaled that he will sign this legislation into law. It 
would not be effective if it were passed in the year 2001.
  So now is the moment, and I am proud to support the conference 
report.
  Mr. GOODLATTE. Mr. Speaker, I yield 6 minutes to the gentleman from 
Virginia (Mr. Davis) the chief sponsor of the legislation.
  Mr. DAVIS of Virginia. I thank my friend for yielding the time.
  Mr. Speaker, obviously if we had a different President and Vice 
President, we would have a stronger bill here today, but I think it 
shows the willingness of our side of the aisle to try to get some kind 
of bill and some kind of protections for American industry, 
particularly the high technology industries that are so at risk with 
the Y2K bug that we are here today with the bill that the President can 
sign, and now that he has indicated he will sign it, he has given 
permission to Democrats who opposed this to vote for it.
  I think, as I look at this, going back to what was originally offered 
on the House side, their original bill, this is a much stronger bill in 
final than was offered on the other side of the aisle in their 
substitute originally. I just want to highlight some of those.
  The conference report, for example, grants benefits in consumer and 
business. They excluded consumer exceptions, cases from the protections 
of this bill. The original bill on the Democratic side, their 
substitute that they tendered, liability of defendants is joint and 
several subject to the court's discretion in that it should be 
proportional for a defendant of minimal responsibility.
  This mandates proportional liability unless there are insolvent 
defendants, in which case the injured party is made whole. This is a 
far more complete protection to companies than was originally offered 
on the other side. Had we gone in with their entry, we would not be 
here where we are today with the strengths of this bill. The 
administration was willing to come further than their colleagues were 
on the other side of the aisle.
  Or this bill has a limitation on punitive damages for small 
businesses and no punitive damage awards available against governmental 
entities. Their original provision offered no protections at all in 
this area, at all. So we have that as well. We were able to work with 
the administration.
  We have Federal jurisdiction over class actions now Federalizing 
class actions with over 100 plaintiffs who are claiming more than $10 
million with special notice requirements to class members. There was 
nothing offered on the other side when this was offered as their 
substitute.
  And we also offer in this legislation regulatory relief for small 
businesses, protection for individuals who cannot

[[Page 14981]]

make their mortgage payments because of a Y2K problem. Nothing was 
offered in the original tender from the other side on this issue, so I 
am grateful for the support that we have received from the 236 Members 
of this body, from both sides of the aisle, who were willing to start 
out and support this legislation and not support the fig leaf that was 
offered up on the other side in the original legislation.
  I also want to thank the U.S. Chamber of Commerce, Tom Donohue and 
Lonnie Taylor, in particular, who worked very hard on this, National 
Association of Manufacturers and Jerry Jasinowski and their group, the 
Information Technology Industry Counsel and all of my companies out in 
northern Virginia, dozens of them, who supported this legislation and 
felt that this is an appropriate, common sense route even in its 
weakened state as we move forward.
  And I want to thank the administration for coming and meeting us 
halfway on this and moving on a number of issues where they appeared 
intransigent just 2 or 3 months ago. It takes two to tango, and at the 
end of the day I am glad that we are all singing from the same sheet of 
music.
  As the lead sponsor of H.R. 775, the year 2000 Readiness and 
Responsibility Act, I am pleased to voice my strong support for this 
conference report. I want to congratulate my colleagues who serve on 
the Committee on the Judiciary and their staffs for the long hours and 
late nights that they invested over the last few days and bringing the 
White House around to making real and significant compromises that will 
allow this critical legislation to become law in the very near future. 
And I want to thank Amy Heerink, Trey Hardin from my staff who worked 
very hard on this as well.
  More than 6 weeks ago this body passed a strong and balanced 
bipartisan legislation that will encourage businesses across the Nation 
to pursue Y2K repair and remediation efforts without fear of frivolous 
litigation that would otherwise threaten the competitiveness of the 
fastest growing segments of the U.S. economy. The President said he 
would veto the House bill. Following passage on May 12, the weaker 
bipartisan compromise crafted in the Senate faced a veto after two 
failed cloture votes before garnering the votes of 12 courageous 
Democratic senators and passed 62-37.
  During that time, the Senate debated and rejected an offer by Senator 
Kerry from Massachusetts that had the support of the President, but I 
liken it to the House substitute offered up on the other side. It 
failed to win a support of even the majority of the Senate by a fairly 
substantial margin. I would also note that the Kerry proposal, like the 
substitute offered here, was soundly rejected by the year 2000 
Coalition who supported the original legislation including the vast 
remnants of the high technology industry.

                              {time}  1400

  Despite modifications made to the Y2K Act by the bipartisan 
cosponsors in the other body responding to nearly all of the 
President's objections, the White House still insisted the President 
would veto the Senate measure. The President's statement of 
administration policy is that he would accept the modified version of 
proportionate liability in the Senate bill. He opposed liability caps 
on directors and officers. Those were eliminated.
  The punitive damage caps were severely modified to only apply to 
small businesses with fewer than 50 employees and individuals with a 
net worth of less than half a million dollars; and when the defendant 
is found to have intentionally injured a plaintiff, by the jury, the 
sky is the limit.
  In recognizing the need to have a bill enacted into law as soon as 
possible, the House conferees accepted the Senate amendments to the 
House bill and adopted the Y2K Act with two technical amendments. But 
due to the White House's failure up to that point to come forward with 
any substantive suggestions for a compromise, we in the House urged 
them to come to our conferees in good faith and provide us with 
specific language that we would consider in order to get a bill passed 
and working to encourage businesses to spend their dollars on fixing 
the Y2K problem, not in frivolous litigation.
  Understanding that, the House and Senate conferees were moving 
quickly to produce the conference report in this legislation. We wanted 
to get it passed and through before the July 4 recess; and I want to 
congratulate the White House on recognizing the necessity for this 
legislation, for a vast turnaround from their earlier testimony before 
one of our committees where they said no such problem exists.
  I urge all of my colleagues to vote yes on the conference report for 
H.R. 775, the Y2K Act.
  Finally, I want to thank my colleague, the gentleman from Virginia 
(Mr. Goodlatte), who steered this through the Committee on the 
Judiciary and the House. Without the gentleman from Virginia (Mr. 
Goodlatte), this would not be here; and I appreciate his good work.
  Ms. LOFGREN. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman 
from Virginia (Mr. Moran).
  Mr. MORAN of Virginia. Mr. Speaker, as one of the lead Democratic 
sponsors of the Year 2000 Readiness and Responsibility Act, I rise 
today in strong support of this legislation. Anybody that has followed 
this legislation knows that the debate surrounding it on both sides of 
the aisle has at times been driven more by political maneuvering than 
substantive policy concerns. That is why we are so pleased that this 
truly bipartisan compromise conference report has been worked out with 
both Chambers and the White House.
  It was done because all involved decided it was more important to our 
Nation and our economy to pass Y2K litigation reform than to play 
politics as usual.
  Currently, American businesses, governments and other organizations 
are tirelessly working to correct potential Y2K failures. It involves 
reviewing, testing and correcting billions of lines of computer code. 
American businesses will spend an estimated $50 billion to reprogram 
their computers, but despite these efforts many of the Y2K computer 
failures will occur because of the interdependency of the United States 
and world economies.
  In contrast to other problems that affect some businesses or even 
entire industries engaged in damaging activity, the Y2K problem will 
affect all aspects of our economy, especially the most productive high-
tech industries.
  As the Progressive Policy Institute said, this is a unique, one-time 
event, best understood as an incomparable societal problem rooted in 
the early stages of our Nation's transformation to the digital economy. 
That is why it is so important that we do the right thing on this 
legislation.
  Without this legislation, it has been estimated by legal experts that 
the litigation surrounding the Year 2000 could be in excess of $1 
trillion. If this bill does not prevent economic damage recoveries, 
injured plaintiffs will still be able to recover all of their damages 
and defendant companies will still be held liable for the entire amount 
of economic damages that they cause.
  Additionally, all personal injury claims are exempt from this 
legislation.
  This is the time for Congress to act to protect American jobs and 
industry, and that is what this bill does.
  The goal of Congress should be to encourage economic growth and 
innovation, not to foster predatory legal tactics that will only 
compound the damage of this one-time national crisis. Congress owes it 
to the American people to do everything we can to lessen the economic 
impact of the worldwide Y2K problem and not let it unnecessarily become 
a litigation bonanza.
  In summary, in the State of the Union address, President Clinton 
urged Congress to find solutions that would make the Year 2000 computer 
problem the last headache of the 20th century rather than the first 
crisis of the 21st.
  This legislation accomplishes that objective. It is good legislation. 
We should get a unanimous vote for it.
  Mr. GOODLATTE. Mr. Speaker, I yield 1 minute to the gentleman from

[[Page 14982]]

Iowa (Mr. Leach), the chairman of the House Committee on Banking and 
Financial Services.
  Mr. LEACH. Mr. Speaker, I thank my distinguished friend, the 
gentleman from Virginia (Mr. Goodlatte), for yielding me this time.
  Mr. Speaker, let me just stress that no one knows at this time either 
in America or worldwide if this is not the most exaggerated or the most 
understated issue in the history of the American or world economy.
  On the other hand, what this bill does is move in the direction of 
trying to deal with some potential problems which may arise, and in 
this regard, I would like to express particular thanks to the 
extraordinary leadership of the gentleman from Virginia (Mr. Davis) and 
the gentleman from Virginia (Mr. Goodlatte) and the constructive 
involvement of my good friend, the gentleman from Virginia (Mr. Moran).
  Mr. Speaker, I would like to submit additional comments on one very 
subtle aspect of this particular bill.
  These comments relate to Section 4(h) of the Senate amendment.
  A June 23, 1999, letter from four federal financial regulatory 
agencies--the Federal Reserve Board, the Federal Deposit Insurance 
Corporation (FDIC), the Office of the Comptroller of the Currency 
(OCC), and the Office of Thrift Supervision (OTS)--warned that in their 
view, Section 4(h) was ``drafted so broadly that it could lead to 
significant unintended consequences having the potential to adversely 
affect the safety and soundness of the banking system and the national 
economy.'' In fact, the letter went so far as to assert that, ``. . . 
it is difficult to overstate the disruptions that a broad reading of 
this amendment could cause.''
  Given that assessment, we worked closely with House and Senate 
Judiciary committees and with the federal regulatory agencies to 
develop compromise language which the conferees have adopted. The new 
language focuses narrowly on consumer mortgages and prohibits any party 
from taking action to foreclose on residential property if an actual 
Y2K failure early next year interferes with timely and accurate 
mortgage payments. A consumer who becomes aware that a Y2K failure has 
occurred, and that his or her mortgage payment was lost or delayed as 
result of that failure, will have seven business days to notify the 
mortgage service company in writing. The parties to the transaction 
will then have four weeks to work out a solution. This amendment in no 
way excuses anyone from fulfilling their legal and financial 
obligations but will allow for extra time to resolve what may be a 
once-in-a-lifetime problem.
  The bottom line is that this language accommodates potential 
homeowner concerns without having disruptive implications for how 
financial services are delivered or posing a litigative nightmare. I 
urge adoption of the conference report.
  Before concluding, I might add that yesterday, June 30, 1999, was a 
bellwether day in the banking industry's Y2K readiness program. Bank 
regulators had told financial institutions across the country that they 
were expected to finish fixing their mission critical systems and 
testing them for Y2K bugs by that date. The Committee expects to have 
data by Monday, July 26, on the numbers of institutions which met the 
deadline. I am hopeful that the regulatory agencies and the banking and 
financial services industry will prove to be sufficiently prepared that 
no homeowner will find it necessary to avail themselves of the relief 
in this bill.
  Ms. LOFGREN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I am happy that we are here today and about to approve 
this conference report with what I'm certain will be a very wide margin 
of votes in support. Just a week ago, I was not at all confident that 
we could achieve what we are about to achieve here today. People had 
dug in and compromise seemed unlikely.
  I was actually a member of the conference committee, as the Speaker 
well knows. It was the first conference committee I had ever been a 
member of, and I could easily observe at our first and only meeting 
that there was a great deal of anger in the room. People were fed up 
with the process that brought them there, to that meeting. Without 
going into who did what to whom, and how it could have been improved, 
we got past that anger.
  Many have been mentioned for their contributions to this process. I 
want to give special thanks to my colleague and my leader on the 
Committee on the Judiciary, the gentleman from Michigan (Mr. Conyers), 
the ranking member, whom I think, showed great serenity and leadership 
as he tried to sort through the many complex issues that comprise Y2K.
  I also want to mention someone who has not been praised by anyone 
else today, and that is Senator Hatch. His cool voice of reason and 
comity suggested that the White House should be invited to sort through 
these issues with the conference staff last Friday and through the 
weekend and all through Monday night. Senator Hatch was therefore 
enormously helpful in getting people together.
  I also want to thank the staff. As I just said, the White House 
lawyers and staff were up all Monday night working on this settlement, 
and I think the Committee on the Judiciary staff put in similar hours, 
and this is true on both sides of the aisle. I appreciate the effort 
that they put into this.
  I also want to mention my own special counsel, John Flannery, who put 
in extraordinary efforts trying to keep people working together on 
this.
  This conference report, as I said earlier this morning when we were 
discussing the rule, could have been approached in a variety of ways. I 
am happy to support this one. I think this bill is narrowly crafted to 
deal with this Y2K event, only months away. As the chairman of the 
Committee on Banking and Financial Services just said, we do not know 
what is going to happen when the Year 2000 arrives, or strikes, as the 
case maybe. There are many people in Silicon Valley, many CEOs, who do 
not believe anything much is going to happen when the Year 2000 
strikes. Then there are others who believe a lot may happen. None of us 
will know--until the event occurs.
  It is because of the latter possibility, what could go really wrong 
that makes it so very important we take this step to prepare for the 
possible litigation that may accompany this worst-case possible 
scenario.
  I want to underscore, however, the fact that the parties have come 
together on this issue at this time does not mean there will be 
agreement on a wide diversion of seemingly related issues. Pending in 
the Committee on the Judiciary are a variety of measures that would 
change tort law, change civil law in America dramatically. Some of the 
people who are going to vote for this conference report will not, in 
fact, support a wholesale change of American civil law.
  Let me explain why. When I was thinking about this conference report 
and the underlying bill, I was reminded of President Abraham Lincoln. 
In the Civil War, President Lincoln suspended habeas corpus because the 
threat to the Union was so severe that the President believed he had to 
resort to this extraordinary remedy. That does not mean that we held 
the habeas clause any less dear as a guarantor of our liberty, but we 
had a crisis that prompted this action.
  If bubonic plague were to break out, the health officers would not 
need to get a search warrant when, in pursuit of the plague, they had 
to gain entry. That would not mean we had any less affinity or 
affection for the fourth amendment, which helps keep our country free.
  In this sense, the Y2K event is similar. Although none of us will be 
around at the next millennium, after the Year 2000 this will hopefully 
not be an issue. If it is, we can say here and now, that at least once 
a millennium, we will make a special exception to deal with this kind 
of crisis.
  I appreciate the fact that the White House has sorted through these 
same policy issues and said as much.
  I think that what we have before us is a fair and reasoned response 
that will provide useful benefit to the high-tech community and to our 
economy, because the real underlying issue is, if we do experience the 
worst-case scenario, the hit on our economy would be so enormous, that 
it would require the remedy and relief provided for in this bill.
  I am proud to say that this conference report has the support not 
only of myself but of the ranking member, the gentleman from Michigan 
(Mr.

[[Page 14983]]

Conyers), and many, many others, including our friends across the aisle 
and on this side of the aisle. I think it is something that we can be 
proud of and I sincerely hope and expect it shall in the near future 
serve as a model for additional legislative collaboration.
  Mr. Speaker, I yield back the balance of my time.
  Mr. GOODLATTE. Mr. Speaker, I yield 2 additional minutes to the 
gentleman from Virginia (Mr. Davis).
  Mr. DAVIS of Virginia. Mr. Speaker, let me just say when this came 
up, we sent the conferees last week, the gentlewoman from California 
(Ms. Lofgren) and others had said, please work with us. I know there 
was skepticism, but at the end of the day I think we recognized that 
this legislation is far better than the current status quo in terms of 
the protection it gives to companies and people who have acted 
innocently and in good faith to try to fix the Y2K problem.
  So we took their suggestions. They have come over and have met us 
halfway. I think we have the final product.
  I would like to rehash this because I think it is important for 
American industry to know where the people come from as they try to 
decide these things, and I went through it in that manner. But we are 
here today because we recognize that there is a need and because they 
were ready to meet us halfway on that issue. So I am glad we have this 
final product.
  I am proud to stand up here as the chief sponsor of the legislation 
and say we have a product that I think does, in large part, what we 
intended for it to do when we started out. It does not do everything we 
wanted, for the reasons I outlined before, but again I want to urge all 
of my colleagues to vote yes on this.
  Mr. GOODLATTE. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, first I would like to commend the gentleman from 
Virginia (Mr. Davis) for his leadership on this issue from start to 
finish. Sometimes individuals introduce legislation and it goes to a 
committee that they are not a member of and it goes through the process 
and they are not involved too much. The gentleman from Virginia (Mr. 
Davis) has been involved in this process, he and his staff, from start 
to finish, and I want to commend him for shepherding this legislation. 
He has done an outstanding job in that regard, making sure that the 
needs of the high-tech community not only in his district in Northern 
Virginia but all across the country are met, along with the needs of 
the broader business community who buys this equipment and needs to 
make sure that it operates effectively and have good working systems on 
January 1 of next year, not a good lawsuit on January 1 of next year. 
That is what this legislation accomplishes.
  In addition, this legislation is very, very sensitive to the needs of 
America's consumers, those folks who not only rely on businesses to 
provide them with the goods and services they need but who have 
consumer products in their homes. Whether they be microwave ovens or 
personal computers or automobiles, whatever the case might be, we want 
to make sure that they have the problems that are associated with Y2K 
solved; and if they are not solved, that they have still their good 
legal remedies.
  Under this legislation, they do. If there is a personal injury 
involved, for example, this legislation does not affect their rights to 
bring a cause of action for injury in any way, shape or form.

                              {time}  1415

  There is a carve-out for consumers with regard to consumer goods that 
assures them that they can recover the full amount of their loss if 
they experience one.
  But the main intent of this legislation is to not see those losses 
occur at all. That is why I am so proud of this legislation, and have 
had the opportunity to move it through the Committee on the Judiciary, 
through the House, and through the conference to a good, solid bill 
that adheres to the original principles contained in the original 
legislation of the gentleman from Virginia (Mr. Davis).
  While we have compromised, while we have made a number of changes 
with regard to the details of the bill, the core of the bill in terms 
of putting caps on punitive damages, in this case for small businesses 
of fewer than 50 employees, to make sure that we do not have a strong 
discouragement of solving this problem, that is in the bill.
  To move to the standard of proportional liability, so somebody who 
may be 1 percent responsible for a Y2K problem does not get stuck with 
100 percent of the bill, that is in this legislation. They will only 
pay their respective percentage of the problem, except under certain 
details, in which case it can be a little bit higher. But nonetheless, 
they are not going to be, in most circumstances, faced with the entire 
tab if they only caused a small percentage of the problem.
  Class action reform, something that I am vitally interested in 
because I have introduced legislation on this in a broader sense to 
apply to all class actions, we have that reform in this legislation.
  It makes sense for our Federal courts to handle Y2K class actions 
when they go beyond the scope of a single State. When they have 
plaintiffs or defendents from a multitude of States, this legislation 
will allow us in most instances to remove that legislation to the 
Federal courts, where they can consolidate actions from different 
States and they can apply a more consistent standard, and they can 
avoid the kind of forum shopping that takes place sometimes now.
  In addition, the legislation contains conditions that if the 
plaintiffs seek punitive damages in their class action suit the case 
can be removed to Federal court, regardless of the amount in 
controversy. So these reforms are vital.
  In addition, there are reforms that encourage folks to settle their 
differences outside of the courtroom: A 90-day cooling off period that 
is so important to allow a defendant who is made aware of a problem 
that somebody has in their computer system, in the machinery that is 
operating the manufacture of their products, whatever the case might 
be, they need to be given notice that the problem exists and then an 
ample amount of time to correct the problem. This bill does that.
  The thing that pleases me the most is that because of the bipartisan 
compromise that we have reached with I think we are going to see soon 
an overwhelming majority of Members of both sides of the aisle voting 
for this, and with the support of the White House indicated in several 
letters that have now been received, because of this cooperation we are 
getting this bill done in very short order, and that means that we will 
have about 6 months for everybody who is facing this problem to go at 
solving the problem without fear of entangling themselves in a 
litigation morass, and that is going to do more than anything else to 
make sure that when that clock ticks to 12:01 on January 1 of the year 
2000, computers across the country will know that indeed it is the new 
millenium and that we have not gone back to the horse and carriage era 
of 1900.
  That, to me, will spell a continuation of the success we have had in 
this country with a booming economy as a result of the high-tech 
industry that is fueling our leadership around the world, our growth in 
our economy compared to other countries around the world, and the 
fantastic job creation that has taken place of good, high-paying jobs.
  This industry needs to have this incentive to move forward, rather 
than the hindrance to be set back with a major problem in the year 
2000. We are going to accomplish that here with passage of this 
legislation today, send it to the Senate, and then send it to the 
President, and get on with the business of getting ready for the new 
millennium.
  Mr. COX. Mr. Speaker, I am pleased today to support the conference 
report on H.R. 775, the Y2K Act of 1999. This bill seeks to promote Y2K 
preparedness and prevent a crushing, $1 trillion lawsuit tax on 
American workers and families--the cost of litigation predicted to 
result from the Y2K bug.

[[Page 14984]]

  The 1st Y2K lawsuits were filed in mid-1997, two and half years 
before the millennium. Some unethical lawyers are now holding workshops 
on how to start Y2K class actions. They are planning for abusive class 
actions on an unprecedented scale, which will--unless Congress acts--
injure virtually every sector of the economy.
  This bill will prevent extortion suits against deep-pockets 
defendants. It will protect consumers with meritorious claims by 
requiring lawyers to act for their clients' benefit rather than their 
own. It will guard against unethical lawyers raking off hundreds of 
millions, and even billions of dollars in fees that should go to 
redress real injuries.
  Far too long, the fear of litigation has seriously impeded 
remediation of Y2K problems. Small and large businesses are too often 
limiting their own internal reviews, and their external disclosure and 
cooperation, so that they can avoid being accused of making inaccurate 
statements about their Y2K readiness, or of ``misconduct'' or 
``negligence'' when they are actually trying to fix the problems that 
someone else created.
  This bill will ensure that America does everything possible to fix 
Y2K problems before January 1, 2000. Inevitably, some Y2K failures will 
occur; and when they do, the innovative procedural reforms in this bill 
will encouraged alternatives to unnecessary litigation. And the bill's 
pro-consumer class-action reforms will ensure fair treatment of every 
individual, even in enormous, nationwide Y2K cases.
  As an original cosponsor of this important, common-sense reform 
legislation, I am pleased to join in this effort to help consumers and 
preserve our country's high-tech edge in the global economy.
  Mr. GOODLATTE. Mr. Speaker, I urge every Member of the House to vote 
for this conference report, and I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. LaHood). Without objection, the previous 
question is ordered on the conference report.
  There was no objection.
  The SPEAKER pro tempore. The question is on the conference report.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Ms. LOFGREN. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Evidently a quorum is not present.
  The Sergeant at Arms will notify absent Members.
  The vote was taken by electronic device, and there were--yeas 404, 
nays 24, not voting 7, as follows:

                             [Roll No. 265]

                               YEAS--404

     Abercrombie
     Ackerman
     Aderholt
     Allen
     Andrews
     Archer
     Armey
     Bachus
     Baird
     Baker
     Baldacci
     Baldwin
     Ballenger
     Barcia
     Barr
     Barrett (NE)
     Barrett (WI)
     Bartlett
     Barton
     Bass
     Bateman
     Becerra
     Bentsen
     Bereuter
     Berkley
     Berman
     Berry
     Biggert
     Bilbray
     Bilirakis
     Bishop
     Blagojevich
     Bliley
     Blumenauer
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brady (TX)
     Brown (FL)
     Brown (OH)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Campbell
     Canady
     Cannon
     Capps
     Cardin
     Carson
     Castle
     Chabot
     Chambliss
     Chenoweth
     Clay
     Clayton
     Clement
     Clyburn
     Coble
     Coburn
     Collins
     Combest
     Condit
     Conyers
     Cook
     Cooksey
     Costello
     Cox
     Coyne
     Cramer
     Crane
     Cubin
     Cummings
     Cunningham
     Danner
     Davis (FL)
     Davis (IL)
     Davis (VA)
     Deal
     DeFazio
     DeGette
     DeLauro
     DeLay
     DeMint
     Deutsch
     Diaz-Balart
     Dickey
     Dicks
     Dixon
     Doggett
     Dooley
     Doolittle
     Doyle
     Dreier
     Dunn
     Edwards
     Ehlers
     Ehrlich
     Emerson
     Engel
     English
     Eshoo
     Etheridge
     Evans
     Everett
     Ewing
     Farr
     Fattah
     Fletcher
     Foley
     Forbes
     Ford
     Fowler
     Frank (MA)
     Franks (NJ)
     Frelinghuysen
     Frost
     Gallegly
     Ganske
     Gejdenson
     Gekas
     Gephardt
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Gonzalez
     Goode
     Goodlatte
     Gordon
     Goss
     Graham
     Granger
     Green (WI)
     Greenwood
     Gutierrez
     Gutknecht
     Hall (TX)
     Hansen
     Hastert
     Hastings (FL)
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (IN)
     Hill (MT)
     Hilleary
     Hilliard
     Hinojosa
     Hobson
     Hoeffel
     Hoekstra
     Holden
     Holt
     Hooley
     Horn
     Hostettler
     Houghton
     Hoyer
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Inslee
     Isakson
     Istook
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Jenkins
     John
     Johnson (CT)
     Johnson, E.B.
     Johnson, Sam
     Jones (NC)
     Jones (OH)
     Kanjorski
     Kaptur
     Kasich
     Kelly
     Kildee
     Kilpatrick
     Kind (WI)
     King (NY)
     Kingston
     Kleczka
     Klink
     Knollenberg
     Kolbe
     Kuykendall
     LaFalce
     LaHood
     Lampson
     Lantos
     Largent
     Larson
     Latham
     LaTourette
     Lazio
     Leach
     Levin
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lofgren
     Lowey
     Lucas (KY)
     Lucas (OK)
     Luther
     Maloney (CT)
     Maloney (NY)
     Manzullo
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McCrery
     McDermott
     McGovern
     McHugh
     McInnis
     McIntosh
     McIntyre
     McKeon
     McNulty
     Meehan
     Meek (FL)
     Menendez
     Metcalf
     Mica
     Millender-McDonald
     Miller (FL)
     Miller, Gary
     Miller, George
     Minge
     Mink
     Moakley
     Mollohan
     Moore
     Moran (KS)
     Moran (VA)
     Morella
     Murtha
     Myrick
     Nadler
     Napolitano
     Neal
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Oberstar
     Obey
     Olver
     Ortiz
     Ose
     Owens
     Oxley
     Packard
     Pallone
     Pascrell
     Pastor
     Payne
     Pease
     Pelosi
     Peterson (MN)
     Peterson (PA)
     Petri
     Phelps
     Pickering
     Pickett
     Pitts
     Pombo
     Pomeroy
     Porter
     Portman
     Price (NC)
     Pryce (OH)
     Quinn
     Radanovich
     Ramstad
     Rangel
     Regula
     Reyes
     Reynolds
     Riley
     Rivers
     Rodriguez
     Roemer
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Roybal-Allard
     Royce
     Rush
     Ryan (WI)
     Ryun (KS)
     Sabo
     Salmon
     Sanchez
     Sandlin
     Sanford
     Sawyer
     Saxton
     Scarborough
     Schaffer
     Sensenbrenner
     Serrano
     Sessions
     Shadegg
     Shaw
     Shays
     Sherman
     Sherwood
     Shimkus
     Shows
     Shuster
     Simpson
     Sisisky
     Skeen
     Skelton
     Slaughter
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Souder
     Spence
     Spratt
     Stabenow
     Stearns
     Stenholm
     Strickland
     Stump
     Stupak
     Sununu
     Sweeney
     Talent
     Tancredo
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thompson (CA)
     Thompson (MS)
     Thornberry
     Thune
     Thurman
     Tiahrt
     Toomey
     Towns
     Traficant
     Turner
     Udall (CO)
     Udall (NM)
     Upton
     Velazquez
     Vento
     Visclosky
     Vitter
     Walden
     Walsh
     Wamp
     Waters
     Watkins
     Watt (NC)
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Wexler
     Whitfield
     Wicker
     Wilson
     Wise
     Wolf
     Woolsey
     Wu
     Wynn
     Young (AK)
     Young (FL)

                                NAYS--24

     Bonior
     Capuano
     Crowley
     Delahunt
     Duncan
     Filner
     Hinchey
     Kennedy
     Kucinich
     Lee
     Lewis (GA)
     McKinney
     Meeks (NY)
     Paul
     Rahall
     Rothman
     Sanders
     Schakowsky
     Scott
     Stark
     Tierney
     Waxman
     Weiner
     Weygand

                             NOT VOTING--7

     Brown (CA)
     Dingell
     Fossella
     Goodling
     Green (TX)
     Hall (OH)
     Lipinski

                              {time}  1442

  Messrs. TIERNEY, CAPUANO, KENNEDY of Rhode Island and MEEKS of New 
York changed their vote from ``yea'' to ``nay.''
  Mr. BURTON of Indiana changed his vote from ``nay'' to ``yea.''
  So the conference report was agreed to.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________