[Congressional Record (Bound Edition), Volume 145 (1999), Part 7]
[House]
[Pages 9338-9380]
[From the U.S. Government Publishing Office, www.gpo.gov]



               YEAR 2000 READINESS AND RESPONSIBILITY ACT

  The SPEAKER pro tempore. Pursuant to House Resolution 166 and rule 
XVIII, the Chair declares the House in the Committee of the Whole House 
on the State of the Union for the consideration of the bill, H.R. 775.

                              {time}  1152


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the State of the Union for the consideration of 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, with Mr. LaHood in the chair.
  The Clerk read the title of the bill.
  The CHAIRMAN. Pursuant to the rule, the bill is considered as having 
been read the first time.

[[Page 9339]]

  Under the rule, the gentleman from Virginia (Mr. Goodlatte) and the 
gentlewoman from California (Ms. Lofgren) each will control 30 minutes.
  The Chair recognizes the gentleman from Virginia (Mr. Goodlatte).
  Mr. GOODLATTE. Mr. Chairman, I yield myself such time as I may 
consume.
  As we all know, the end of the millennium is rapidly approaching, and 
rather than looking ahead to the promise and possibility of the 21st 
century, Americans are approaching it with concern.
  They are fearful because January 1, 2000, will bring with it the Y2K 
computer bug, a result of the decision made in the 1960s by computer 
programmers to design software that recognized only the last two digits 
rather than the full four digits of dates in order to conserve precious 
computer memory.
  When the clock turns from December 31, 1999, to January 1, 2000, some 
computers will interpret ``00'' to mean that the date is 1900 rather 
than 2000. With dates being critical to almost every layer of our 
economy and across vast numbers of industries, systems that are 
noncompliant will disrupt the free flow of information that forms the 
underpinnings of our Nation's economy.
  Many Y2K computer failures could occur weeks and months before 
January 1, 2000, and the barrage of Y2K lawsuits has already begun. 
CNETnews.com has reported over 80 Y2K lawsuits already filed, with 790 
demand letters for new Y2K suits issued.
  These legal obstacles are preventing good-faith efforts toward fixing 
Y2K computer problems. We are fighting the clock; we should not also be 
fighting an unnecessarily hostile legal environment.
  It has been estimated that Y2K litigation could cost $2 to $3 for 
every dollar spent on actually fixing the problem. Y2K litigation cost 
predictions range from $300 billion to $1 trillion, compared to just 
$15 billion for 1990's asbestos suits and $18.4 billion for Superfund 
suits.
  These enormous costs could cripple our high-tech sector, diverting 
billions into litigation that should go to work force training, 
research and innovation and global competition.
  Fear of lawsuits is stifling efforts to fix the Y2K problem. 
Corrective efforts by software engineers must be scrutinized and pre-
approved by corporate legal divisions. Software consultants think twice 
before offering help for fear of incurring complete, joint and several, 
liability for systems they try to fix. Small business entrepreneurs 
face the impossible choice between spending funds for expensive Y2K 
fixes or saving cash for the potentially bankrupting litigation to 
come.
  The Y2K glitch is not a partisan issue. It is a problem that could 
impact all Americans. Congress must act to address the problems that 
are currently discouraging businesses from addressing the Y2K problem 
and that will ultimately harm consumers.
  The legislation we are considering today will continue the efforts 
which we initiated with the administration in the 105th Congress 
through the passage of the Year 2000 Information and Readiness 
Disclosure Act that furnished the first steps towards facilitating year 
2000 remediation and testing.
  Mr. Chairman, H.R. 775 is designed to implement a reform framework 
that will encourage a fair, fast and predictable mechanism for both 
plaintiffs and defendants for resolving Y2K disputes, ensuring that 
litigation will become the avenue of last resort, rather than the first 
option for settling institutes.
  While it is estimated that American businesses have poured hundreds 
of billions of dollars into making the transaction to the year 2000, 
the simple reality is that some problems will go unresolved because of 
fear of litigation.
  A basic premise of the bill is that contracts between suppliers and 
users will be fully enforceable in a court of law. All economic losses 
suffered by an individual or business as a result of a year 2000 
failure, provided that their duty to mitigate damages was fulfilled, 
will be compensable. Claims brought by individuals or businesses based 
on personal injury are outside the scope of this legislation.
  Further, the Act creates a pre-filing notification period intended to 
encourage potential plaintiffs and defendants to work together to reach 
a solution before they reach the courtroom. The pre-filing notification 
period requires potential plaintiffs to give written notice identifying 
their Y2K concerns and provide potential defendants with an opportunity 
to fix the Y2K problem outside of the courtroom.

                              {time}  1200

  After receipt of this notice, the potential defendant would have 30 
days to respond to the plaintiff stating what actions will be taken to 
fix the problem. At that point, the potential defendant has 60 days to 
remedy the problem. If the defendant fails to take responsibility for 
the failure at the end of the 30-day period, the potential plaintiff 
can file a Year 2000 action immediately. If the injured party is not 
satisfied once the 60 days have passed, he or she still retains the 
right to file a lawsuit.
  There are also provisions encouraging alternative dispute resolution 
and offers in compromise language for nonclass-action suits. As a 
result, we expect that there will be more attention given to Y2K 
remediation and an elimination of many Y2K lawsuits.
  Also included are provisions that apply a proportionate liability 
standard to damages caused by multiple actors, some of whom may not 
necessarily be parties to a Year 2000 action. A defendant found to be 
only 5 percent liable in causing a Year 2000 problem would only be 
responsible for 5 percent of the damages, not 100 percent liable.
  Furthermore, the legislation minimizes the opportunities for those 
who may try to exploit the unknown value of potential Y2K failures and 
pursue litigation as a first resort rather than permit the parties to 
resolve problems.
  This bill contains provisions that will make sure that businesses are 
confident that they can spend their dollars fixing the Y2K problem 
rather than reserving those dollars for costly lawsuits that will 
increase costs for consumers, push small innovative businesses into 
extinction, and endanger, and in some instances eliminate, many 
American jobs.
  The bill grants original jurisdiction to Federal District Courts for 
any Year 2000 class action where certain diversity requirements are 
met. Punitive damages in a Year 2000 action are capped at $250,000, or 
three times the amount of actual damages, whichever is greater, except 
for businesses with fewer than 25 employees, including State and local 
government units or individuals whose net worth is no greater than 
$500,000, wherein punitive damages are capped at the lesser of 
$250,000, or three times the amount of actual damages.
  Since 1996, there have been more than 50 bipartisan hearings in the 
Congress examining a wide-ranging array of issues that are directly 
related to the Y2K challenge that is facing our global economy. We have 
listened to computer users and to industry, and what we have 
consistently heard is that small and large businesses are eager to 
solve the Y2K problem. Yet many are not doing so primarily because of 
the fear of liability and lawsuits. The potential for excessive 
litigation, and the negative impact on targeted industries are already 
diverting precious resources that could otherwise be used to help fix 
the Y2K problem.
  My substitute aims to eliminate those fears and hasten the repair of 
Y2K problems while we still have time to resolve them. I should say the 
bill that is now on the floor. I urge my colleagues to support this 
important legislation.
  Mr. Chairman, I provide for the Record a letter dated May 10, 1999, 
to the chairman of the Committee on the Judiciary from the chairman of 
the Committee on Commerce regarding H.R. 775:
                                         House of Representatives,


                                        Committee on Commerce,

                                     Washington, DC, May 10, 1999.
     Hon. Henry J. Hyde,
     Chairman, Committee on the Judiciary,
     Washington, DC.
       Dear Henry: I am writing with regard to H.R. 775, the Year 
     2000 Readiness and Responsibility Act.

[[Page 9340]]

       Although the Committee on Commerce did not receive a named 
     additional referral of H.R. 775 upon introduction, the 
     Speaker has nevertheless granted my Committee a sequential 
     referral of the bill. This sequential referral results from 
     provisions in the introduced legislation within the Commerce 
     Committee's jurisdiction pursuant to Rule X of the Rules of 
     the House of Representatives. As you know, during the markup 
     of H.R. 775, your Committee adopted amendments which 
     eliminate the Commerce Committee's jurisdictional concerns 
     over these provisions.
       Because of the importance of this legislation, I recognize 
     your desire to bring it before the House in an expeditious 
     manner. I will therefore agree to discharge the Commerce 
     Committee from further consideration of H.R. 775. By agreeing 
     to waive its consideration of the bill, however, the Commerce 
     Committee does not waive its jurisdiction over H.R. 775. In 
     addition, the Commerce Committee reserves its right to seek 
     conferees during any House-Senate conference that may be 
     convened on Y2K legislation. I ask for your commitment to 
     support any such request with respect to matters within the 
     Rule X jurisdiction of the Commerce Committee.
       I request that a copy of this letter be included as part of 
     the record during consideration of the legislation on the 
     House floor.
           Sincerely,
                                                       Tom Bliley,
                                                         Chairman.

  Mr. Chairman, I reserve the balance of my time.
  Ms. LOFGREN. Mr. Chairman, I yield such time as he may consume to the 
gentleman from Missouri (Mr. Gephardt), the minority leader.
  Mr. GEPHARDT. Mr. Chairman, the technology industry has been a prime 
driver in the robust economic growth that we have seen in the last 
several years. I think it is our responsibility to see that the Y2K 
problem does not slow down this engine of growth in our economy.
  Democrats have put forward a substitute bill cosponsored by the 
gentlewoman from California (Ms. Zoe Lofgren), the gentleman from 
Michigan (Mr. John Conyers), and the gentleman from Virginia (Mr. Rick 
Boucher) which addresses the Y2K litigation problem in a responsible, 
sensible, and adequate manner. The Clinton administration supports this 
substitute.
  We need to do something but we do not need to take steps that will 
dismantle key protections for consumers and small businesses that is 
represented in H.R. 775. The Lofgren-Conyers-Boucher substitute is a 
responsible alternative that would allow businesses to take the 
necessary steps to enhance readiness and assist customers to deal with 
the Y2K bug. The Democratic substitute would create incentives for Y2K 
compliance, weed out frivolous Y2K claims while allowing meritorious 
ones to go forward, and encourage alternatives to litigation.
  I applaud the gentlewoman from California (Ms. Anna Eshoo), who is a 
key leader on technology issues, who understands that H.R. 775 is not 
the solution to the problem and who is trying to find a compromise that 
will provide the protections that both industry and consumers deserve.
  Some Republicans are using the sledgehammer approach to this issue. 
Instead of trying to fashion a responsible solution to a real problem, 
they are trying to create a divisive issue where one need not exist. We 
do not need a campaign issue, which I am afraid is the way some of my 
Republican colleagues are approaching the problem. We need a real 
bipartisan solution that the President will sign.
  We can come up with a better way than H.R. 775. Let us address the 
problem, not make it worse. Vote against H.R. 775 and support the 
common sense Lofgren-Conyers-Boucher substitute.
  Ms. LOFGREN. Mr. Chairman, I yield such time as he may consume to the 
gentleman from Michigan (Mr. Conyers).
  Mr. CONYERS. Mr. Chairman, I thank the gentleman from Virginia (Mr. 
Goodlatte), the manager of this bill, for his courtesy in allowing me 
to speak at this time.
  Mr. Chairman, I rise to urge that the words of the minority leader, 
the gentleman from Missouri (Mr. Gephardt), be considered.
  The problem, essentially, is that the committee-passed version of 
this bill goes way beyond the stated needs of the high-technology 
community and is probably being used as a precedent for more broad-
ranging tort reform.
  The problems are these: The bill eliminates the possibility of damage 
recovery whenever a defendant exercises ``reasonable efforts'' to fix a 
computer defect, even if his efforts are unsuccessful.
  Secondly, the limits and caps on punitive damages are unnecessary and 
unrequired. We put caps on officers' and directors' liabilities. We 
federalize class actions. We eliminate joint and several liability and 
then further mandate a loser-pay mechanism.
  I want to suggest to my colleagues that the wave of 80 lawsuits 
already filed is not a flood of litigation that we need to be unduly 
concerned about.
  I also want to say that I have regretted that the amendment of my 
colleague, the gentleman from Michigan (Mr. Ehlers) was not put in 
order. It cut off any claims against Y2K compliance from 1995 forward, 
because the damage has been known for many, many years. The potential 
damage. I think this has been overmagnified.
  I want to praise the gentlewoman from California (Ms. Lofgren) and my 
colleague, the gentleman from Virginia (Mr. Rick Boucher) for the work 
they have done in helping carve out a reasonable substitute that will 
escape administration veto.
  Now, inadvertently, the bill eliminates incentives to remediate Y2K 
problems and the bill now sweeps in millions, potentially, of consumers 
into the Y2K litigation relief package. So, please, let us all be as 
reasonable as possible.
  We are proud to support the high-tech community in their problems, 
and we want to work them out, but let us not overdo it. Support the 
substitute and let us hope, then, we will get a bill that will pass 
administration muster.
  Again, Mr. Chairman, I thank the gentleman from Virginia and I 
compliment the gentlewoman from California (Ms. Lofgren) that is 
managing the bill on our side.
  As presently written, ``The Y2K Readiness and Responsibility Act,'' 
which I prefer to call the ``Y2K Industry Overreaching Act,'' is 
nothing more than another poorly crafted product liability reform 
effort, disguised as legislation to address the Y2K problem. Much of 
the bill is left over from the discredited ``Contract with America,'' 
which has already been rejected by Congress and the American people.
  I am not averse to legislation that specifically and narrowly 
addresses the problems faced by the high tech community. However, the 
bill reported by the committee goes well beyond reasonable reform. In 
fact, Assistant Attorney General Eleanor D. Acheson has testified that 
``. . . this bill would be by far the most sweeping litigation reform 
ever enacted. This bill would harm technology users, and is bad for 
consumers and small businesses. Worst of all, instead of creating 
positive incentives to fix problems, it creates new reasons to avoid 
remediation.
  First, the legislation would harm technology users because by 
providing across the board caps and limitations on liability, H.R. 775 
will make it more difficult for businesses suffering computer failures 
to obtain compensation. Kaiser Permanente has written that the 
legislation ``unfairly prejudices (or completely bars) the ability of 
the health care community to recover costs associated with any 
potential personal injury or wrongful death award from the entity 
primarily at fault for the defect that caused the injury.'' Those 
businesses who have had the foresight to cure their own Y2K problems 
will also be negatively impacted, since the bill will allow their 
competitors to obtain the same legal benefits without incurring 
remediation costs.
  The legislation is also bad for consumers and small businesses. Even 
though the Y2K problem has been overwhelmingly described as a business 
to business issue, H.R. 775 sweeps in tens of millions of individual 
consumers with little opportunity to protect themselves by contract. 
Further, the ``loser pays'' provision is totally inconsistent with the 
notion of equal justice and will also work to the significant 
disadvantage of individuals and small businesses. This is because in 
order to bring their case to trial, an individual or small business 
must risk reimbursing a large corporation for its legal fees. Under 
this provision, if a harmed party guesses wrong by a mere $1, even if 
he or she wins the case, they could be liable to pay the wrongdoers 
legal fees.
  The legislation also eliminates incentives to remediate Y2K problems. 
The ``reasonable efforts'' defense is so broad it would even cover 
intentional wrongdoing or fraud, so long as the misconduct was 
eventually papered over by

[[Page 9341]]

any sort of post-hoc reasonable effort. Even if a defendant takes 
minimal steps to remedy a Y2K problem, it will serve as a complete 
defense against a tort action, thereby undercutting incentives to 
prepare for and prevent Y2K errors. In addition, the bill's punitive 
damage restrictions provide the greatest amount of liability protection 
to the worse offenders and those who have done the least to solve their 
Y2K problems, while the limitations on directors and officers liability 
will protect irresponsible and reckless behavior.
  Given the evidence we have so far, it is impossible to justify such a 
complete reworking of our state civil justice system to accommodate a 
single industry. I would remind the Members that a recent New York 
Times article noted that ``so far the cases offer little support for 
the dire predictions that courts will be choked by litigation over 
Y2K.'' Even high tech executives have questioned the magnitude of the 
problem, with Jim Clark, the co-founder of Netscape Communications and 
Silicon Graphics stating, ``I consider [Y2K] a complete ruse 
promulgated by consulting companies to drum up business . . . the 
problem is way overblown [and is] a good example of press piling on.''
  However, I do believe it is possible to achieve a reasonable middle 
ground on this issue. Democrats have a long track record of working 
with the high tech community in order to maintain American leadership 
in information technology and preserve and foster American jobs. We 
have been out front in supporting copyright reform, patent reform, 
encryption reform and state tax reform, to name but a few recent 
initiatives. Just last Congress we strongly supported the Readiness 
Disclosure Act, which protected high tech companies from Y2K disclosure 
liability.
  We are ready, willing and able to work with the interested parties on 
the Y2K problem as well--but only if all sides are willing to be more 
realistic and practical in their goals. A substitute Ms. Lofgren, Mr. 
Boucher, and I plan to offer today will be a good faith effort to 
achieve this goal. But I cannot support the bill as it is presently 
written, and I must urge a No vote.
  Mr. GOODLATTE. Mr. Chairman, I yield 2 minutes to the gentleman from 
California (Mr. Dooley).
  Mr. DOOLEY of California. Mr. Chairman, I rise in strong support for 
H.R. 775, the Y2K Readiness and Responsibility Act. The Y2K transition 
presents a very unique set of challenges, and that is why I am pleased 
to be a cosponsor of this legislation which has developed a very 
specifically and narrowly crafted piece of legislation targeted to 
address this one-time situation.
  H.R. 775 embodies a few key principles: Accountability, fairness and 
predictability. It represents a strong bipartisan effort targeted at 
addressing the potential Y2K challenges facing our Nation's businesses, 
consumers and public agencies by providing incentives and resources to 
ensure that businesses continue with their mitigation efforts. The bill 
also develops a roadmap for navigating potential Y2K glitches that may 
occur after December 31, 1999.
  The reason we need to do this is because some people have estimated 
that it might cost over $50 billion to fix Y2K problems. We need to 
continue to see these efforts move forward, but we also need to have a 
process put in place to ensure that we can resolve disputes should they 
occur.
  Since cosponsoring this legislation, I have had the opportunity to 
meet with constituent groups and business leaders representing all 
sectors of our economy, including representatives from the financial 
service sector in New York and high-tech leaders in Silicon Valley in 
Seattle. And whether I was talking to small business owners or 
consumers, technology executives or Wall Street traders, they all 
delivered the same message and expressed the same concerns regarding 
Y2K challenges: First, they are committed to fixing any potential 
problems associated with Y2K and are investing all necessary resources 
to prevent Y2K failures.
  Second, they want to be treated fairly. Many of them are both 
potential plaintiffs and defendants. They want assurances that 
potential problems will be fixed quickly and with minimal disruptions. 
They also want to ensure that they will be accountable for remedying 
their share of potential problems that develop and not expected to cure 
problems which they have no responsibility for.
  And third, they are looking for some level of predictability. 
Businesses and consumers alike are troubled by the current atmosphere 
of uncertainty and are looking for a predictable process to remedy 
potential Y2K problems and to mediate Y2K disputes.
  The high tech industry, which has been the driving force in our 
nation's unprecedented economic growth, is solidly supporting this 
legislation. Every major technology association, including: the 
Information Technology Industry Council; the Information Technology 
Association of America; the Semiconductor Industry Association; the 
Software Information Industry Association; the Business Software 
Alliance; the Telecommunication Industry Association; The American 
Electronics Association; the Computing Technology Industry Association; 
Technology Network; the National Association Computer Consultant 
Business; and the Semiconductor Equipment and Materials International 
have endorsed H.R. 775. These associations represent a broad section of 
companies, ranging from the smallest start-ups to industry leaders, but 
they are unified in support of our legislation because it will 
encourage mitigation above litigation, and will ensure the continued 
robust growth of the U.S. economy.
  I am also concerned that some may resort to litigation alleging Year 
2000 failures against parties that truly bear no responsibility for any 
Y2K failure in a consumer product. I know that sometimes plaintiffs 
will sue parties for their deep pockets, and even when there is no 
liability, defendants wind up absorbing the cost of the litigation. I 
believe the legislation before us takes sound steps to curb this 
problem. In particular, it seems to me that when a retail seller or 
lessor of a computer product does no more than sell the product in the 
packaging in which it was received, and does not do anything to that 
product that affects the Year 2000 compliance, that seller or lessor 
should not be subject to liability in a Year 2000 case. I believe that 
the language of the legislation addressing the case where the defendant 
has sole control of the product, Section 301(1), properly provides for 
such a result.
  Make no mistake. The Y2K Readiness and Responsibility Act holds 
businesses and individuals responsible for their products and their 
actions. It ensures that individuals and companies who experience Y2K 
problems have their problems fixed as quickly and orderly as possible, 
and that they recover any economic loss that results from Y2K failures. 
There are no limits on economic damages, so plaintiffs are eligible to 
receive all potential economic losses resulting from Y2K problems.
  Like the securities litigation reform legislation that was enacted in 
the last Congress, the Y2K Readiness and Responsibility Act makes sure 
people are responsible for the share of any Year 2000 problem they 
cause, not problems caused by others. The Y2K Readiness and 
Responsibility Act would assign proportional liability for Y2K problems 
and failures.
  Our legislation encourages mitigation and remediation over litigation 
by creating a 90 day cure period to fix the problem before resorting to 
litigation. The legislation would require the submission of a written 
notice outlining the Y2K problem, give the defendant 30 days to propose 
a remedy to the problem, and would allow the plaintiff to sue if a plan 
had not been put forward within the 30 day period or within 90 days if 
they were not satisfied with the defendant's remediation offer. In 
addition, the bill promotes the use of Alternative Dispute Resolution.
  Some have argued that there is no demonstrated need for the 
legislation. In fact, Y2K litigation is already on the rise. According 
to a recently published story in Time magazine, the filing of Y2K 
lawsuits has increased dramatically with at least 78 suits filed to 
date and nearly 800 legal disputes in the process of formal 
negotiation. Lloyds of London insurance has projected that worldwide 
claims could exceed $1 trillion, which would prove to be a considerable 
drain on our strong economy by diverting resources from investment, 
research and income growth.
  We all hope that when the New Year comes that the investment in Y2K 
fixes will have paid off and that we will be faced with relatively few 
problems. The Y2K Readiness and Responsibility Act simply establishes a 
set of ground rules to minimize the potential effects of Y2K problems 
of businesses and consumers alike if failures do occur.
  Mr. Chairman, I urge my colleagues to join me in supporting this 
legislation.
  Ms. LOFGREN. Mr. Chairman, I yield such time as he may consume to the 
gentleman from Virginia (Mr. Boucher).
  Mr. BOUCHER. Mr. Chairman, I thank the gentlewoman from California 
for yielding me this time.
  Today, Mr. Chairman, we will debate the approach that should be taken 
by

[[Page 9342]]

the Congress to address the problems associated with the Y2K computer 
transition. These problems are real, and those on this side of the 
aisle share the concerns of the technology community that an addressing 
of these concerns by the Congress should be provided.
  I think the national interest will be well served through the 
adoption by the Congress of a framework through which Y2K problems can 
be presented and repairs made. Where repairs cannot be made, that 
framework should lead to the provision of appropriate damage payments.
  As we build that framework for the Y2K transition, it is important 
that we keep our focus on the actual unique circumstance that has been 
presented to the Congress. We must avoid the temptation to use the Y2K 
problem for the creation of a template to enact overly-broad 
legislative restrictions on litigation that would then be applied by 
future Congresses in other subject matter areas.
  I would ask the Members to bear in mind that we have a limited amount 
of time within which to pass this measure. For most legislation we have 
a longer time horizon, but this measure will only carry the protections 
we hope to extend if it is in place before the end of this year.
  Given the press of appropriation bills, which are immediately 
pending, we really have a very narrow window within which to act. And 
to act within that narrow time calls for a narrow measure, one that 
meets the legitimate needs of the companies that will be the subject of 
Y2K suits and one that is limited just to those legitimate needs.
  I have been pleased to work closely over the course of the past month 
with the gentlewoman from California (Ms. Lofgren) and the gentleman 
from Michigan (Mr. Conyers) as we have structured a substitute that 
does meet those legitimate needs. Today, we will be offering that 
substitute.

                              {time}  1215

  Our substitute will be a major help to all of the affected parties in 
making the Y2K transition. It is narrowly targeted to meet the needs 
that have been presented. It will not impose overly broad limits on 
litigation. It can be signed into law within the narrow window of 
opportunity that is present to us.
  As the Members consider H.R. 775, as reported from the committee, 
which, in my opinion, is overly broad, I will urge the Members on both 
sides of the aisle to also carefully consider the substitute that we 
are putting forward and to choose that approach that is best structured 
to solve the actual problems that have been presented and that can be 
enacted at the earliest possible time. Only our substitute meets that 
test.
  Mr. GOODLATTE. Mr. Chairman, I am pleased to yield 3 minutes to the 
gentleman from California (Mr. Royce).
  Mr. ROYCE. Mr. Chairman, on December 31, 1999, as that big ball comes 
down in Times Square, we will be faced with a very real problem that 
demands a real response from the business community. Knowing of these 
potential disasters and the time constraint with which we are faced, 
one would assume that businesses are now laboring feverishly to correct 
the problem that may result with a single-minded focus. But this has 
not been the case, unfortunately.
  Instead of taking a more active approach to solving the Y2K problem, 
many businesses find themselves expending time and energy on liability 
issues. In large corporations, the work of software engineers has to be 
rigorously examined and approved by legal departments. Small 
entrepreneurs, on the other hand, are faced with the dilemma of funding 
extensive Y2K-compliant changes or saving for potentially bankrupting 
legislation and litigation.
  Given these circumstances, American society could be confronted by an 
extended period of challenging technological and economic issues; and 
that is why I have cosponsored this legislation, H.R. 775, and why I 
rise today in support of its passage.
  This bipartisan legislation creates incentives for businesses to 
address the impending Year 2000 problem by creating a legal framework 
in which Y2K-related disputes will be resolved. The emphasis is placed 
on mediation and cooperation over litigation. Businesses are encouraged 
to help each other solve potential problems, rather than sue over 
something that could have been averted.
  Finally, the legislation provides entrepreneurs and small businesses 
with access to small business administration loans for Y2K modification 
projects. We must not permit a climate to foster in which businesses 
paralyzed by a fear of unrestrained lawsuits fail to take action that 
would adequately address the problem. And this bill allows businesses 
to focus their efforts on finding real solutions, rather than 
anticipating out-of-control lawsuits that only serve to aggravate the 
situation.
  The Year 2000 Readiness and Responsibility Act is critical in helping 
consumers and businesses that may be impacted negatively if the Y2K 
problem is not resolved in a timely and efficient manner. The 
Congressional Budget Office indicates that this would save money for 
the government if we pass this and for the taxpayers. Therefore, I urge 
my colleagues to vote for its passage today.
  Mr. BOUCHER. Mr. Chairman, I am pleased to yield such time as he may 
consume to the gentleman from Massachusetts (Mr. Delahunt).
  Mr. DELAHUNT. Mr. Chairman, well, here we go again, crafting public 
policy without a clue as to why or what we are really doing; and the 
American people should be aware of it.
  Just last week, we passed a bankruptcy reform bill based on dubious 
assertions by the credit card industry that the bill would result in 
lower costs to consumers. One industry-funded study said that the bill 
would save the average household over $400 per year; and this figure 
found its way into every witness statement and ``Dear Colleague'' 
letter, as though it were an established fact.
  It was also routinely cited in press accounts, even after the study 
was flatly contradicted by a chorus of consumer advocates and 
bankruptcy experts, even after the Congressional Budget Office and the 
General Accounting Office were unable to substantiate the figure, even 
after every witness at a subcommittee hearing admitted that corporate 
cost savings would not be passed on to consumers in the form of lower 
interest rates.
  And today we are at it again. We are considering legislation that 
would exempt large businesses from any liability for Year 2000 failures 
for which they are, in fact, responsible. And, once again, we are 
presented with a headline-grabbing assertion, ``pass this legislation 
or American companies will face $1 trillion in litigation costs.''
  Well, $1 trillion is serious money, Mr. Chairman. But where is the 
evidence? Where does that estimate come from? I asked that question 
repeatedly in committee; and I never received an answer, never. But, 
later on, I asked one of our witnesses who looked into the matter; and 
I want to read into the Record his account of where that number came 
from.

       The one-trillion-dollar figure emanated from the testimony 
     of Ann Coffou, Managing Director of Giga Information Group, 
     before the U.S. House of Representatives Science Committee on 
     March 20, 1997, during which Ms. Coffou estimated that the 
     Year 2000 litigation costs could perhaps top $1 trillion. Ms. 
     Coffou's estimate was later cited at a Year 2000 conference 
     hosted by Lloyds of London and immediately became 
     attributable to the Lloyds organization rather than the Giga 
     Group.
       Obviously, those who want to use the trillion-dollar 
     estimate for their own legislative purposes prefer to cite 
     Lloyds of London rather than the Giga Group as the source of 
     this estimate. There has been no scientific study and there 
     is no basis other than guesswork as to the cost of 
     litigation. This so-called trillion-dollar estimate by the 
     Giga Group is totally unfounded but once it achieved the 
     attribution to Lloyds of London, the figure became gospel and 
     is now quoted in the media and legislative hearings as if 
     this unscientific guess by this small Y2K group should be 
     afforded the dignity of scientific data.

  A guess, Mr. Chairman. That is what this legislation is based on, a 
guess, a guess that has acquired the status of an accepted fact through 
nothing more than repetition.

[[Page 9343]]

  Now, I know this is old fashioned, but before we proceed to confer 
blanket immunity on those who fail to act responsibly, I think we 
should have something more than a guess. And before we deprive 
consumers and small businesses of compensation for the losses they will 
sustain if their computers do not work, I think we should have 
something more than a guess. And before we override centuries of common 
law, both at the State and Federal level, both substantive and 
procedural, I think we should have something more than a guess.
  We are told that this bill is necessary to encourage businesses to 
take the necessary steps to avert or minimize the Year 2000 problem. 
The Lofgren-Boucher-Conyers substitute does just that. Yet the 
underlying bill, by removing the threat of liability, discourages and 
undermines the incentive that companies have to do so to bring their 
problems into compliance. And it is the American people who will be 
left holding the bag on January 1.
  The bill discourages compliance. It benefits the large multinational 
corporations, to the detriment of small business and the individual 
consumer. This bill ought not to pass, and I urge support for the 
substitute offered by the gentleman from Virginia (Mr. Boucher), by the 
gentlewoman from California (Ms. Lofgren), and by the gentleman from 
Michigan (Mr. Conyers), the ranking member on the committee.
  Mr. GOODLATTE. Mr. Chairman, I yield 30 seconds to the gentleman from 
Virginia (Mr. Davis), the author of the bill.
  Mr. DAVIS of Virginia. Mr. Chairman, just to clear a couple things 
up, small businesses support this legislation. The National Federation 
of Independent Businesses is scoring this as a key vote. They represent 
both potential plaintiffs and defendants in these actions.
  Secondly, nothing here we are doing disallows a consumer or an 
injured party from suing for full damages. What they do not get are 
massive punitive damages. They can get up to $250,000 in non-economic 
damages and three times actual damages. But they are not barred, as 
some State legislatures do, from collecting damages. Some States treat 
this almost as an act of God where they get nothing. So I think that 
clarification is important.
  Mr. GOODLATTE. Mr. Chairman, I yield 3 minutes to the gentlewoman 
from Illinois (Mrs. Biggert).
  Mrs. BIGGERT. Mr. Chairman, I rise to speak today in favor of House 
Resolution 775, the Year 2000 Readiness and Responsibility Act; and I 
commend the gentlemen from Virginia for their leadership on the Y2K 
liability issue.
  In my former life in the Illinois State Legislature, I also drafted a 
liability bill for the Year 2000. When I came to Congress, I thought I 
had left Y2K behind. However, as they say, the more things change, the 
more they stay the same.
  As the Vice Chairman of the Subcommittee on Government Management, 
Information and Technology, I have participated in a series of hearings 
on Y2K compliance at Federal agencies. I believe that, largely because 
of congressional attention, our Federal agencies will be ready for the 
Year 2000 date change. But will our Nation's small and large businesses 
be ready?
  Many of our Nation's lawyers are gambling that they will not. Dozens 
of Y2K-related lawsuits already have been filed in the United States, 
and estimates of the total costs associated with the Y2K litigation 
approach $1 trillion. Comparatively, the total annual direct and 
indirect costs of all civil actions in the United States is estimated 
at $300 billion.
  The Y2K computer date change will affect every business, consumer, 
local government and school. When we wake up on January 1 of the year 
2000, we need the continued computer capacity of water and sewage 
plants, utilities, gas stations, pharmaceutical companies, hospitals 
and local traffic lights.
  Absent this bill, I strongly believe that the threat of Y2K liability 
has the potential to discourage effective actions on Y2K compliance. We 
must, instead, encourage plaintiffs and defendants in Y2K legal actions 
to work together to find solutions to the Y2K problem. The bill 
encourages Y2K fixes but discourages Y2K lawsuits by encouraging 
alternative dispute resolution, placing limitations on damages and 
requiring pretrial notice.
  American businesses are already investing up to $1 trillion to ready 
their computers so that we can enter our new millennium as smoothly as 
we leave the old. Instead of preparing for liability, small businesses 
especially need to work together, share information and solve Y2K 
problems before the end of the year. For, as we all know, the year 2000 
will not wait.
  I urge my colleagues to support this legislation on behalf of 
workers, consumers and businesswomen and men.
  Mr. BOUCHER. Mr. Chairman, I ask of the Chair the amount of time 
remaining for both sides?
  The CHAIRMAN (Mr. LaHood). The gentleman from Virginia (Mr. Boucher) 
has 15 minutes remaining. The gentleman from Virginia (Mr. Goodlatte) 
has 13\1/2\ minutes remaining.
  Mr. BOUCHER. Mr. Chairman, I am pleased to yield such time as he may 
consume to the gentleman from Texas (Mr. Doggett).
  Mr. DOGGETT. Mr. Chairman, I represent the Central Texas area, where 
high technology has really provided the engine for the unprecedented 
economic growth that we have experienced.
  I want to support reasonable legislation that will benefit that 
industry and our community, but I really do not believe that this is 
it. I have the greatest respect for my colleague (Mr. Davis of 
Virginia), with whom I am in general agreement on technology issues. 
But on this particular issue, I believe that there is a bit of 
overreaching that gets us into some really serious problems.

                              {time}  1230

  The exclusion by the Committee on Rules in this debate of the 
amendment by our Republican colleague Mr. Ehlers and of several 
proposals by the gentleman from Virginia (Mr. Scott) suggests that the 
debate is designed to force an up or down vote on a version of this 
bill that does much more than is necessary to protect the technology 
community.
  As a former State court judge, I am particularly concerned by the 
unequivocal rejection of provisions of this bill by the Judicial 
Conference of the United States. That is a body composed largely of 
Federal judges appointed by Presidents Reagan and Bush. This bill takes 
what the Judicial Conference describes as a ``radically different 
approach'' with ``the potential of overwhelming Federal resources and 
the capacity of the Federal courts to resolve not only Y2K cases, but 
other causes of action as well.''
  The United States Department of Justice has likewise opposed this 
extreme measure, noting that ``even a defendant who recklessly 
disregarded a known risk of Y2K failure could escape liability.'' The 
Department of Justice also opposes this bill because it ``would 
preclude federal and state agencies from imposing civil penalties on 
small businesses for first-time violations of federal information 
collection requirements.''
  Most of the reasonable provisions of this proposal, and there are a 
number of reasonable provisions, are so reasonable that they are 
already the law in Texas and in most other places: penalties against 
anyone who brings a frivolous lawsuit, a requirement of adequate notice 
to someone who is going to be sued, a cooling-off period, an 
opportunity for a wrongdoer to cure the wrong, a duty for the victim to 
undertake reasonable steps to mitigate or minimize damage, and the use 
of mediation or alternative dispute resolution to avoid a lengthy jury 
trial. To the extent that there may be some deficiency in the laws of 
the States, the State legislatures are the place to deal with these 
kind of problems, and they are dealing with them.
  That is why we have legislatures convene in places like Austin, 
Texas, where the Texas Legislature is sitting today. And only last 
week, the Texas Legislature unanimously sent to Governor George W. Bush 
a proposal that he supports that deals in a much less

[[Page 9344]]

expansive way with this whole Y2K issue. I increasingly hear that my 
Republican colleagues are pretty enamored with George W., and I would 
just ask if he is good enough for you, why is his Y2K bill not good 
enough for them? Instead, by preempting Texas law, by overriding and 
essentially saying to the Texas legislature and our Texas governor that 
on Y2K, you are nuts, we are suggesting in this legislation that the 
good people of Texas or Florida or Minnesota or anywhere else in the 
country should yield to the alleged wiser wisdom of Washington. I think 
that that is the false premise of this bill.
  As we look back over history a thousand years to the beginning of the 
current millennium, there were many apocalyptic visions of what might 
happen about this world. Today, a variety of people are approaching the 
new millennium with similar grave concern. Jerry Falwell, who believes 
the end is near, is predicting ``a possibility of catastrophe.'' There 
is a dark vision of the millennium at the Planet Art Network where you 
can get your galactic signature decoded and learn the real cause of 
Y2K. And there are a group of people, including some not far from where 
I live in Texas, that are stocking up on canned goods and bottled 
water, heading for the hills and abandoning the community in 
anticipation of all the ill that will flow in the millennium change.
  Today we see the legislative view of this survivalist approach to 
Y2K. This is law making, which really fails to build on a bipartisan 
approach, but instead employs a measure that is opposed by every 
Democrat and one Republican and supported by every other Republican on 
the Judiciary Committee. Rather than trying to come together and find 
some true middle ground on addressing this Y2K issue, this bill really 
is attempting to set a precedent for undermining in other types of 
civil cases trial by jury, which represents one of the most valued 
rights shared by American citizens. This bill will encourage 
irresponsibility rather than responsibility; it does not represent the 
appropriate way to address the Y2K issue.
  Mr. GOODLATTE. Mr. Chairman, will the gentleman yield?
  Mr. DOGGETT. I yield to the gentleman from Virginia.
  Mr. GOODLATTE. I thank the gentleman for yielding. My question is, 
the gentleman is not suggesting that the governor of Texas is opposed 
to this legislation, is he?
  Mr. DOGGETT. I am suggesting that the governor of Texas has fulfilled 
his responsibility in calling for Y2K action in Texas, in building a 
consensus that produced a bipartisan bill approved unanimously by the 
legislature. If he provided such good leadership, why do we not follow 
that leadership in Texas instead of as your bill does, preempting, 
overriding and disregarding that action?
  Mr. GOODLATTE. Mr. Chairman, I yield 2 minutes to the gentleman from 
California (Mr. Gary Miller).
  Mr. GARY MILLER of California. Mr. Chairman, I am not here today to 
talk about the Book of Revelation or the end of time. I rise in strong 
support of H.R. 775, the Year 2000 Readiness and Responsibility Act.
  I want to thank the gentleman from Virginia (Mr. Davis), the 
gentleman from Virginia (Mr. Moran), the gentleman from California (Mr. 
Dreier), the gentleman from Alabama (Mr. Cramer), the gentleman from 
California (Mr. Cox) and the gentleman from California (Mr. Dooley) for 
their leadership on this issue.
  This bipartisan bill is our opportunity to provide critically needed 
protections for consumers and businesses to ensure that Y2K computer 
problems are addressed quickly and that precious resources are not 
squandered on needless litigation. To minimize the impact of the Y2K 
bug, American businesses are currently investing $600 billion and 
working diligently towards reprogramming and replacing their affected 
computer systems. Unfortunately there is no easy technological fix for 
this problem. Each computer must be meticulously fixed, tested and 
retested. Opportunistic individuals are only adding to an already 
almost insurmountable task by diverting attention and needed resources 
away from fixing the problem, with litigation.
  To date, over 80 Y2K lawsuits have been filed and there are 790 
letters demanding new Y2K litigation. It is estimated that unrestrained 
litigation could cost $1.4 trillion. That would only serve to line the 
pockets of greedy opportunists at the expense of American jobs.
  H.R. 775 is a very reasonable approach to preventing an explosion of 
Y2K litigation. This bill favors remediation over litigation by 
encouraging parties to resolve their differences outside of the 
expensive court system through alternative dispute resolution. It also 
places the focus of Y2K problem solvers on a solution rather than 
fighting in court. At the same time H.R. 775 does not eliminate the 
normal legal options. Americans who suffer economic or physical 
injuries as a result of Y2K can still recover 100 percent of their 
actual damages. Many Y2K computer failures could occur weeks and months 
before January 1, 2000. That is why it is so important that we pass 
this legislation immediately and remove the legal obstacles that are 
preventing good faith efforts toward fixing the Y2K computer problem.
  Mr. BOUCHER. Mr. Chairman, I yield 1 minute to the gentleman from 
Texas (Mr. Stenholm).
  Mr. STENHOLM. Mr. Chairman, I thank the gentleman for yielding me the 
time. I rise in strong support of this legislation. We are just 200 
days now away from the turn of the century. A lot of concern is being 
brought about what happens then. But sadly there are some folks that 
are, I think, unfortunately looking for ways to make money off the turn 
of the century. Today this bill is designed to keep that from 
happening.
  This legislation we are voting on will reduce frivolous Y2K lawsuits 
by promoting remediation instead of litigation. In other words, it 
encourages people to work out their legitimate problems and claims 
outside of the courthouse, whenever possible, and still preserve the 
right of folks who suffer real injuries associated with the Y2K problem 
to file suits and to go through our judicial system when necessary. The 
bill also creates incentives to fix problems before they happen.
  This meets what I like to call the west Texas tractor seat, common 
sense approach to a very real problem. I encourage my colleagues to 
support this legislation.
  Mr. GOODLATTE. Mr. Chairman, I yield 1\1/2\ minutes to the gentleman 
from Florida (Mr. Stearns).
  Mr. STEARNS. Mr. Chairman, I rise in strong support of this 
legislation. If we expect American businesses to continue their global 
leadership in innovation, productivity and success to drive our economy 
and create new jobs, they must be given the tools to allow them to 
compete. One of the fundamental tools of success and competition in the 
American economy and the high tech community is being free from the 
burdens of opportunistic lawsuits which are clearly designed to harm 
American businesses. H.R. 775 does this by placing caps on punitive 
damages, creating a waiting period on lawsuit filings and establishing 
a loser pay system.
  Unless we establish liability protections, many if not most of 
American businesses will be hesitant to solve any Y2K problems for fear 
of lawsuits. Let us do what is the right thing here, Mr. Chairman, and 
pass this bill overwhelmingly.
  Mr. BOUCHER. Mr. Chairman, I am pleased to yield 3 minutes to the 
gentleman from Massachusetts (Mr. Delahunt).
  Mr. DELAHUNT. Mr. Chairman, I thank the gentleman for yielding me 
this time. I will not consume all that time, but I felt it necessary to 
respond to the primary sponsor for whom I have great respect, the 
gentleman from Virginia (Mr. Davis), when he talks about small 
businesses.
  I would like to point out just one particular aspect of this proposal 
that will hurt small businesses. This goes to the issue of economic 
loss. If a small business under the provisions of this bill should 
incur a disruption in the course of its business because of the 
negligence of another party because of

[[Page 9345]]

the Y2K bug issue, that small business will not be entitled to losses 
such as lost profits, such as business interruption and other such 
consequential damages. I am not talking about frivolous lawsuits here. 
I am talking about lawsuits that are meritorious.
  What this bill will do will disadvantage small businesses, because 
they do not in many cases have the financial wherewithal to take on the 
giants. Clearly the damages that they will be seeking is because their 
business will be hurt, in many cases will be devastated, and in many 
cases might very well end up in bankruptcy. So maybe the NFIB is 
scoring this, but I suggest a careful reading of this language will 
show that this bill harms small business as well as the consumer.
  In addition, for those that have meritorious claims, we have changed 
the standard, we have changed the burden of proof on small businesses 
in their attempt to recover their legitimate and valid remedies. We 
have changed it from a mere preponderance of the evidence to now a 
totally different standard, one that is more akin to the criminal law. 
It is just a short way from beyond a reasonable doubt, and, that is, 
clear and convincing evidence.
  Let me suggest that the substitute offered by the gentleman from 
Virginia and the gentlewoman from California and the ranking member 
will address the issues that they are concerned about.
  Mr. GOODLATTE. Mr. Chairman, I yield myself 45 seconds. I have some 
bad news for the gentleman from Massachusetts. The provisions of the 
Conyers-Boucher-Lofgren substitute related to economic losses are very 
similar. In fact, ours are more limited than theirs are with regard to 
that position. In addition, the White House in a letter that they 
submitted yesterday, signed by Bruce Lindsey and Gene Sperling, states,

       Many States have legal rules limiting the recovery of 
     economic loss damages in certain tort lawsuits. These rules 
     are designed to bar parties to contracts from avoiding 
     contract limitations on liability by suing in tort. We would 
     support statutory recognition of this rule as a way to limit 
     frivolous Y2K claims, provided that the rule is limited 
     appropriately so that it would not effectively prevent 
     recovery in cases of fraud.

  Ours is more limited than theirs.

                              {time}  1245

  Mr. Chairman, I yield 5 minutes to the gentleman from Virginia (Mr. 
Davis), the principal sponsor of this legislation and my good friend.
  Mr. DAVIS of Virginia. Mr. Chairman, I thank my friend for yielding 
this time to me, and I have great respect for my colleagues on the 
other side in trying to get together on this issue because I think they 
recognize, and even the White House has come to recognize just in the 
last couple of days, that the fastest growing segment of the American 
economy, our technology sector, is jeopardized by an occurrence of an 
infusion of litigation on Y2K liability in this.
  This is complicated. We can have a computer system that is Y2K 
compliant, but because it is so interconnected to other areas, even 
when we test it we will end up talking to other areas over the long 
term. We could not test that it could disrupt that system.
  A clear and convincing standard is needed, frankly. I would make that 
argument as opposed to the old preponderance of the evidence where 
somebody is hurt and somebody pays.
  That is what makes this so unique. That is why we are not trying to 
rewrite tort law in its entirety.
  Mr. Chairman, I just address a few of the issues that have been 
raised on the other side.
  We have heard the usual arguments about a sledgehammer approach, 
about extreme measures, but these are approaches that this House has 
voted for before, Members of both parties. We talked about a real 
bipartisan solution. What that means is something the President will 
sign, something the Trial Lawyers Association will agree to, something 
that they can try to please everyone.
  But that does not solve the problem. The problem of those solutions 
is it does not get to the heart of what American companies are about to 
face. We are in a borderless economy, worldwide economy, today. Fastest 
growing segment of our economy: the technology sector that is 
jeopardized by lawsuits; and this jeopardizes whether it is a trillion 
dollars or whether it is tens of billions of dollars, which is what 
asbestos is. These are profits that could be channeled into new 
products to continue to keep American companies competitive in the 
global market place, and instead they are going to be bogged down in 
protracted litigation, in attorneys' fees and settlement costs that do 
not need to be.
  Under our legislation, everybody who is injured gets their damages. 
They can prove it, they get their damages. They can even get three 
times their economic loss in punitive damages, or $250,000, whichever 
is the most. We are not depriving anyone of anything.
  The gentleman from Michigan made a comment that reasonable efforts by 
the defendant will bar the incurrence of damages. That does not happen 
at all. It just caps punitive damages. It just takes away a doctrine, 
joint and several liability, that in this very interconnected world 
where we have embedded chips and the like and it is very difficult to 
place, allocate, blame, will not bring down large companies because 
they happen to have the deep pockets and because somebody else might 
have messed up a problem 25 years ago and they cannot find them today.
  Even the administration in their letter recognizes that perhaps some 
use of proportional liability may be appropriate in this as long as the 
defendant could get full damages from the defendants that they could 
find. The language: We have to escape an administration veto.
  We are not running cover for anybody here. We are trying to pass 
legislation. If we have this language, we never would have gotten the 
securities litigation damage where this House overrode an 
administration veto, or just a couple of years ago. What we want is 
commonsense litigation against the heart of this problem, and that is 
we are taking the fastest growing part of our economy, we are putting 
it in jeopardy, and what that does on the worldwide marketplace wherein 
other countries, they do not face the litigious society that we do 
here, where they can continue to grow and prosper and produce jobs and 
keep the economy humming.
  Ironically, many of the individuals who oppose this legislation in 
the administration will not be here when we see the results of not 
enacting this legislation down the road. They will be blaming people 
who are then in office because of legislation that is passed today.
  Our job is not to necessarily escape an administration veto, 
particularly in a bill that goes through the House for the first time. 
We overrode the administration on securities' legislation. We are not 
going to let the trial lawyers or any single interest group write this 
bill. Our job is not to provide cover to any political entity in this. 
It is to write a commonsense bill that gets the job done.
  Small businesses are both plaintiffs and defendants in this. Small 
businesses are hurt if they cannot sue and get damages under the 
instances described by the gentleman from Massachusetts, but they can 
sue here and get full damages. They get their economic damages. They 
can get a modicum of punitive damages as well.
  That is why the National Federation of Independent Business, the 
largest small business organization in the country, endorses this 
legislation. That is why the U.S. Chamber of Commerce, made up of large 
and small organizations, endorse this legislation. That is why I asked 
unanimous consent this be placed into the Record.
  The credit unions now endorse this legislation, H.R. 775, because 
they are small businesses that recognize that, without this kind of 
relief, their businesses can be brought down, they can go bankrupt, and 
their customers and their employees are then out on the street.
  I also will put into the Record a number of Chambers of Commerce and 
business entities and local groups from National League of Cities on.

[[Page 9346]]

                                             CUNA & Affiliates

                                                    Washington, DC

                               Memorandum

     To: Governmental Affairs and Political Specialists.
     From: Richard Gose and Karen Ward.
     Re: Late Breaking News on Y2K and Gaps Conference Call, 
         Wednesday, May 12th
     Date: May 11, 1999.


 late breaking development--house to vote on y2k liability legislation 
                           tomorrow, may 12th

       Today, the House Leadership decided to put H.R. 775, the 
     Year 2000 Readiness and Responsibility Act, on the floor May 
     12th. According to the Rules Committee, the legislation will 
     be considered under a ``modified closed rule.'' Six 
     amendments will be voted on--CUNA urges Yes votes on three 
     amendments: Davis (VA) which defines the types of damages 
     recovered under the bill and changes the effective date of 
     the legislation to January 1, 1999; Moran (VA) which exempts 
     all claims arising from a personal injury suit; Jackson-Lee 
     (TX) which clarifies language regarding notification; and a 
     Yes vote for final passage.
       Due to the very technical nature of this legislation, we 
     feel that it would be most appropriate for league staff and 
     only selected credit union leaders to lobby their legislators 
     for passage of this bill. Any calls that can be placed to 
     House members' offices tomorrow morning would be very 
     helpful.


                  gaps call on senate bankruptcy vote

       As you saw in this afternoon's Call to Action, bankruptcy 
     reform is headed for a floor vote in the Senate possibly, as 
     soon as next Monday. We will be holding a GAPS call tomorrow, 
     May 12th at 1:30 pm Eastern Time to discuss our lobbying and 
     grassroots strategy for this bill. We hope that you will be 
     able to join us for this call which we expect to be 
     relatively brief, with the first half used for an update from 
     our lobbying team and the second half reserved for questions 
     and discussion.
       The call-in number for the call is: 1-888-243-0810.
       The confirmation number is: 1551181.
                                  ____

                                                     May 11, 1999.
     Hon. ___ ___
     House of Representatives
     Washington, DC.
       Dear Representative: As leaders of America's information 
     and high technology industry associations--representing a 
     broad cross-section of companies, ranging from the smallest 
     start-ups to the industry leaders--we are writing to express 
     our strong support for HR 775, bipartisan legislation, to 
     provide a framework under which year 2000 (Y2K)-related 
     disputes can be resolved without costly lawsuits.
       Our industry wants Congress to pass and the President to 
     sign legislation that will encourage all businesses to 
     continue efforts to fix, rather than litigate, Y2K-related 
     problems. H.R. 775 creates powerful incentives for companies 
     to remediate Y2K problems, while preserving the rights of 
     those who suffer real injuries to pursue legal recourse. It 
     is essential that everyone in the supply chain of the 
     American economy work together to prevent the unique 
     situation of the century date change from triggering chaos in 
     our legal system and the entire economy.
       Congress, the White House and the business community worked 
     together last year to unanimously enact the Year 2000 
     Information and Readiness Disclosure Act. That important 
     legislation has helped encourage information-sharing to 
     enhance Y2K readiness throughout all sectors of the American 
     economy. H.R. 775 will provide additional tools and 
     incentives to enable businesses and their customers to 
     concentrate their efforts, attention and resources on 
     preventing year 2000-related problems.
       The companies we represent, together with their customers 
     and suppliers, support HR 775 legislation to ensure the 
     continued robust growth of the American economy, through an 
     investment in remediation not litigation efforts.
           Sincerely,
       Rhett B. Dawson, President, Information Technology Industry 
     Council (ITI).
       Harris N. Miller, President, Information Technology 
     Association of America (ITAA).
       George Scalise, President, Semiconductor Industry 
     Association (SIA).
       Ken Wasch, President, Software Information Industry 
     Association (SIIA).
       Robert Holleyman, President, Business Software Alliance 
     (BSA).
       Matthew Flanigan, President, Telecommunications Industry 
     Association (TIA).
       William Archey, President, American Electronics Association 
     (AEA).
       John Venator, President, Computing Technology Industry 
     Association (CompTIA).
       Reed Hastings, President, Technology Network (TechNet).
       Don McLaurin, President, National Association Computer 
     Consultant Business (NACCB).
       Stanley Myers, President, Semiconductor Equipment and 
     Materials International (SEMI).
  Mr. BOUCHER. Mr. Chairman, I yield 1 minute to the gentleman from 
Massachusetts (Mr. Delahunt).
  Mr. DELAHUNT. Mr. Chairman, I think it is important to state for the 
Record when the gentleman speaks that a litigant in a suit when 
punitive damages are awarded under the provisions of this bill does not 
receive those punitive damages, that it goes to a special fund.
  Now, if I am misstating the language of the bill, maybe the gentleman 
can educate me.
  Mr. GOODLATTE. Mr. Chairman, will the gentleman yield?
  Mr. DELAHUNT. I yield to the gentleman from Virginia.
  Mr. GOODLATTE. As a part of the self-executing rule that was just 
passed by this House those provisions were taken out.
  Mr. DELAHUNT. Mr. Chairman, I am very pleased to hear that.
  Mr. GOODLATTE. Maybe that would have changed the gentleman from 
Massachusetts' vote on the rule, had he known that.
  Mr. DELAHUNT. Mr. Chairman, it would not have changed my vote on the 
rule, but it certainly takes a bill from being very bad to simply bad.
  Mr. GOODLATTE. Mr. Chairman, I yield 2 minutes to the gentleman from 
Tennessee (Mr. Bryant), a member of the Committee on the Judiciary.
  Mr. BRYANT. Mr. Chairman, I rise in support of H.R. 775 and certainly 
want to commend both sides of this debate and certainly the level of 
the debate. I think it simply shows that, in both cases, reasonable 
minds can disagree.
  I think we all recognize the potential problem out there with Y2K 
litigation, the uniqueness that it would provide to us all, the 
challenge here, and I think that is why many of us want to look to a 
special bill here that would give incentives to people rather than go 
the traditional adversarial route in the courts and bog down in 
litigation and get into that adversarial situation where neither side 
does anything for awhile until the court system operates.
  We, many of us, feel the need to have this procedure that would 
encourage people to settle, to work quickly to get the computer systems 
and networks back up, to get our commerce system to the extent that it 
has been slowed down back up to full speed.
  As my colleagues know, it has been mentioned that 98 percent of the 
businesses in this country are small businesses. What we are also 
failing to mention here, though, is that these small businesses employ 
60 percent of the work force. We are talking about a lot of people here 
and an awful lot of jobs at stake, and that is why these issues of 
alternative dispute resolution, of new forms of offers of judgment 
where people, if they do not better their offer of judgment, then they 
have to pay the other side's attorneys' fees. Whether the cooling off 
period that we provide here, these are all very solid legal procedures 
that would encourage people to sit down and work it out in a 
businesslike manner.
  There is provision in this bill for fair compensation, but, on the 
other hand, there is provision in this bill for remedial action, which 
is what we have talked about all along and, again, due to just the 
special circumstances that we could be facing on January 1, Year 2000, 
because of the uniqueness of this potential legal matter and because of 
the possible ramifications across our society and, again, 98 percent of 
the small businesses and 60 percent of the work force.
  I would ask that this not be a business-as-usual situation.
  Mr. BOUCHER. Mr. Chairman, I yield back the balance of my time.
  Mr. GOODLATTE. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, I urge my colleagues to support this important 
legislation. We have the reforms in it that were contained in the 
Contract with America 4 years ago, including caps on punitive damages 
so that no one unelected jury in some part of the country can give a 
multi-million-dollar award that can wipe out a business, change 
national public policy without the Congress or other State legislative 
bodies having the ability to do that. We limit the effect of joint and 
several liability by making it proportionate liability so that if one 
is 1 percent at fault they are not held responsible for a hundred 
percent of the damages in a case which

[[Page 9347]]

is under current law. We change that so that if one is 1 percent at 
fault they only pay 1 percent of the liability.
  In addition, we have reforms here of class action lawsuits so that 
one cannot go forum shopping in a particular State, to a particular 
county, to a particular court, to a particular judge that may be 
favorable to bringing what is otherwise a frivolous class action 
lawsuit. There are States in this country that have certified a great 
many nationwide class action lawsuits; in fact, more than the entire 
Federal judiciary has certified in some years, and that reform is badly 
needed.
  This legislation encourages parties to get together, work out their 
problems, solve the Y2K problem without first filing a lawsuit; and 
they do that by encouraging alternative dispute resolution. We do that 
by discouraging the filing of frivolous lawsuits because, if we do 
that, they may wind up paying some of their opposing side's attorney 
fees if their suit is deemed nonmeritorious. And I encourage my 
colleagues to support this legislation and to oppose the amendments 
that are going to be offered by the gentleman from New York (Mr. 
Nadler) and the gentleman from Virginia (Mr. Scott) which we will 
address shortly.
  Mr. BLILEY. Mr. Chairman, I rise in support of H.R. 775, the Year 
2000 Readiness and Responsibility Act. With just over seven months to 
go until the new millennium, it is important for the Congress to move 
forward with this legislation. This year, the Commonwealth of Virginia 
enacted its own legislation on Year 2000 problems. As the bill we have 
on the floor today goes to conference, I will be watching to see 
whether the provisions of Virginia's Year 2000 law will remain 
operative.
  I thank the sponsors of the bill for their hard work.
  Mr. COX. Mr. Chairman, whatever its other consequences, the Y2K bug 
may crash the nation's justice system--not for days or weeks but for 
years. Our justice system, already plagued by intolerable delays and 
expense, could be submerged under a deluge of cases--both meritorious 
and frivolous--sparked by Y2K. Though estimates of legal liability have 
ranged as high as a trillion dollars (Lloyd's of London), no one can 
confidently predict the scale of the liability crisis because no 
consensus has developed--even among the best informed experts on the 
subject--about how serious and widespread the underlying Y2K problems 
will be.
  The scale of the legal problem can be guessed at by the scope of 
remediation efforts: The Gartner Group, a consulting firm, has 
estimated costs of $400-600 billion worldwide to fix the problem. 
Federal Express will spend $500 million; Citibank will spend $600 
million; Merrill Lynch has 80 people working in shifts, 24 hours a day, 
seven days a week.
  These efforts are focused on two main problems: first, the potential 
inability of programming in both software and hardware to accurately 
process date-related codes after 2000 because, to conserve memory, 
programmers in the past used a two-digit rather than four-digit date 
field; and second, the potential inability of embedded chips in every 
sort of mechanical device imaginable to function accurately because 
they, too, use two-digit date fields.
  Even the best-informed Y2K experts differ as to the scope of the 
problem and the success of the massive public and private remediation 
efforts now going on around the world. We can be sure, however, that 
our Dickensian legal system, which cannot address even 20th-century 
legal problems, will be wholly unequal to dealing with the millennium 
bug.
  Fear of the impending litigation is already seriously impeding 
remediation of Y2K problems, causing businesses to limit their own 
internal reviews and external disclosure and cooperation so that they 
can avoid being accused of making inaccurate statements or engaging in 
``knowing'' misconduct.
  Even President Clinton, who has steadfastly opposed civil justice 
reform and even vetoed the bipartisan 1995 law suit reform bill--it was 
evaded anyway, over his veto--has accepted the need for a specific Y2K 
reform when he signed Mr. Dreier's ``Y2K Information and Readiness 
Disclosure Act'' in October 1998. This bill, which I cosponsored, is 
designed to encourage businesses to disclose the status of their Y2K 
readiness (and thereby encourage cooperation on remediation) without 
fear that their disclosures will lead to a securities suit.
  But much more remains to be done: Fear of unfair liability is 
continuing to chill proactive remediation efforts, and in any case 
Congress must put in place a framework now to control the avalanche of 
litigation that we can see coming.
  Y2K will exacerbate all the existing flaws in our legal system. Y2K 
lawsuits began to be filed in mid-1997, two and a half years before the 
millennium, and trial lawyers are now holding workshops and symposia on 
how to run Y2K class actions. Unless Congress acts quickly, we will 
soon see the same kind of abusive class actions that led Congress to 
act in 1995 and again in 1998 to curb securities strike suits--but this 
time, on a vastly larger scale, affecting virtually every sector of the 
economy. Enterprising lawyers will bring meritless suits to shake down 
deep-pockets defendants, or will run meritorious claims for their own 
benefit rather than their clients'--raking off hundreds of millions and 
even billions of dollars in fees that should have gone to redress their 
clients' injuries.
  In the tobacco cases, for example, billions of dollars in fees have 
already been diverted from tobacco victims to their counsel: in Texas, 
they will receive some $92,000 an hour.
  Tobacco lawyers fees in just two settled cases, Texas and Minnesota, 
amount to $2.8 billion; attorney's fees under all existing state 
contingent-fee contracts have been estimated to run to $14-19 billion; 
private tobacco suits have been estimated to generate more than $30 
billion in lawyers' fees, and could soon average $3-8 billion a year.
  Our legal system does no better at handling non-class action, 
business-to-business litigation, which the millennium bug will also 
generate in vast quantities. Lawsuits between software and hardware 
vendors and their customers will be only the top level of Y2K 
litigation that could cascade through every economic relationship in 
the economy.
  It's vital that Congress act now to set sensible limits on this 
potential avalanche of litigation.
  H.R. 775, the Year 2000 Readiness and Responsibility Act, was 
introduced in late February 1999 by Republican Representatives Davis, 
Dreier, and Cox and by Democratic Representatives Moran, Cramer, and 
Dooley. This balanced, pro-consumer legislation will help remove the 
current disincentives to proactive remediation of Y2K problems. It will 
help people by focusing on fixing the Y2K problems in advance--not 
affixing blame for them afterwards.
  If failures occur, its innovative procedural reforms will encourage 
constructive alternatives to long, drawn-out lawsuits. It strengthens 
pleading standards to help winnow out meritless cases. It adopts the 
Fair Share Rule of proportionate liability for year 2000 claims. It 
sets reasonable parameters for punitive damages. And it adopts 
important pro-consumer class-action reforms in Y2K cases. I'm delighted 
to have cosponsored this important, common-sense reform, which will 
help consumers and preserve our country's high-tech edge in the global 
economy.
  Mr. CRAMER. Mr. Chairman, the year 2000 is only a little over 7 
months away.
  We've all heard the dire predictions--airplanes will fall out of the 
sky, or the nation's power grid will go down, or the world's financial 
markets will crash. Our nation's business community has heard these 
predictions as well. That's why as we get closer and closer to the year 
2000, the business community is accelerating its already massive effort 
to bring their computer systems into Y2K compliance. And Mr. Chairman, 
it is a massive effort. It has been estimated that by the time all is 
said and done, American businesses will have spent $50 billion on 
addressing Y2K problems.
  However, Mr. Chairman, we must all admit that despite their best 
efforts, and despite the extraordinary amount of money invested in 
bringing their computer systems up to speed, something, somewhere will 
go wrong. It's inevitable. Today our world economy is so interdependent 
and tied to computers that a major Y2K failure almost anywhere in the 
world has the potential to result in minor or major disruptions 
everywhere.
  Mr. Chairman, when this day comes we must have in place an effective 
legal framework for dealing with all the litigation that will surely 
result from these expectant Y2K failures or disruptions. The Y2K 
special committee in the Senate has stated that litigation could cost 
as much as one trillion dollars. I don't know about my colleagues, but 
I would like to see our nation's business community spend their 
resources on fixing the problem rather than litigating it. Indeed, 
despite the fact that we are 7 months away from the year 2000, more 
than 80 Y2K lawsuits have already been filed. Can you imagine how many 
frivolous lawsuits will be filed once we've had the first failure or 
disruption?
  That is why I am supporting H.R. 775. This bill sets in place an 
effective legal framework that will sift through the frivolous lawsuits 
while allowing the meritorious lawsuits to precede.

[[Page 9348]]

H.R. 775 encourages a fast, fair and predictable mechanism for 
resolving Y2K related disputes. It encourages resolutions outside of 
the courtroom so that problems can be fixed quickly.
  What this bill will not do, as some of my colleagues will argue it 
does, is encourage people not to fix the problem. In fact, there are no 
protections for people or businesses that act irresponsibly or 
negligently in preparing for the Y2K problem.
  This bill makes sure that businesses that attempt to fix their Y2K 
problems are not unfairly punished by being exposed to frivolous 
lawsuits. But, it still holds people accountable if they are negligent 
or irresponsible. If someone intends to sue a company for damages 
related to Y2K, the bill would give the company 90 days to fix the 
problem before a lawsuit could be filed. In addition, defendants would 
only be liable for their portion of the damages--if the court says a 
company is responsible for 10 percent of the problem, then the company 
pays 10 percent of the damages.
  I represent a high-tech district in the state of Alabama where the 
Y2K issue is at the forefront of a lot of people's minds. State 
officials in Alabama have recently announced that our state is behind 
schedule on the Y2K problem. Businesses in my District are concerned, 
not with the possibility of experiencing Y2K failures--because the 
large majority of these businesses have made the good-faith effort to 
commit the resources necessary to reach compliance--but rather these 
companies are concerned with the threat of frivolous lawsuits. In a 
recent letter to me, one company wrote, ``At very considerable expense 
to us, our company has gone to great lengths to make sure that we are 
Y2K compliant, but we do expect problems will be passed on to us. A 
mountain of litigation could create untold amounts of time and expense 
which could be the hole that `sinks the ship' ''.
  Mr. Chairman, the American people are looking for leadership on this 
issue--not just empty rhetoric. H.R. 775, is a responsible step in the 
right direction. It allows our legal system to work as it should--
meritorious lawsuits will precede and frivolous lawsuits will be 
stopped.
  Mr. Chairman, as I said earlier, the year 2000 is only a little over 
7 months away. The clock is ticking and time is running out. It's time 
for this Congress to act and provide the protection that our business 
community needs. We need to create an environment where responsible 
firms can concentrate on solving their Y2K problems, rather than 
spending their time working on legal defense strategies. H.R. 775 does 
this.
  Therefore, I urge my colleagues to support passage of H.R. 775.
  Mrs. MINK of Hawaii. Mr. Chairman, I rise to express my opposition to 
the passage of H.R. 775, the Year 2000 Readiness and Responsibility 
Act. I will vote ``no'' on final passage because H.R. 775 rewards 
companies' inadequate response and irresponsible behavior in light of 
the Year 2000 computer problem. This bill is more appropriately 
characterized as tort restructuring legislation, limiting the basic 
right of wronged parties to find redress through the legal system.
  Computer technology facilitates virtually all the activities that 
pervade our daily lives. The threat of computer failure in relation to 
the Year 2000 problem has been looming over our heads for many years. 
In previous sessions, Congress focused on means to overcome this defect 
and provided funding for emergency situations that may arise. These are 
positive, constructive ways of handling this critically important 
issue. On the contrary, the legislation before us merely places the 
burden of counteracting difficulty caused by computer technology 
malfunctions on the consumer, rather than the manufacturer. This is a 
patently unfair proposition.
  H.R. 775 strikes at the heart of tort law, removing basic rights 
which secure redress for wronged individuals. The most untenable 
portion of H.R. 775 is the establishment of the ``reasonable efforts'' 
defense. According to the bill's provisions, even if a defendant 
company was grossly negligent or intentionally at fault, as long as 
they make ``reasonable efforts'' to solve the problem the defendant 
bears no liability for the defect.
  Instead, the consumer bears the burden for the defective product. 
This holds true despite the extent of the plaintiff's resultant damage. 
Small business owners, Mom and Pop stores, struggling entrepreneurs, 
these are the individuals who will lose if H.R. 775 becomes law.
  Although technology producers have known about the Y2K computer 
glitch for many years, H.R. 775 severely limits punitive damages for 
Y2K defects. Why do technology producers merit this special benefit 
when they are presently on notice that their products could contain 
flaws and have the opportunity to rectify them now? Situations may 
exist where it is financially prudent for companies to ignore their 
products' Y2K defects. Why, then, should we release these companies 
from punitive liability for their intentional omissions?
  In addition, H.R. 775 removes the right to claim joint and several 
liability. If a plaintiff maintains that a product created by several 
defendants is faulty, the plaintiff must pursue each defendant 
individually to prove their percentage of responsibility instead of 
shifting this burden to the defendant. This section of the bill makes 
people harmed by Y2K glitches less likely to recoup their losses and 
deprives them of a fundamental, legal benefit.
  Representatives Conyers, Lofgren, and Boucher offered a substitute 
bill which balances the interests of economic stability and a 
consumer's right to redress. The Conyers amendment sought to curb 
frivolous, damaging lawsuits, but did not do so at the expense of a 
plaintiff's essential rights. It established a ``cooling off'' period 
to allow parties to settle their differences outside of court, relieved 
defendants of joint and several liability if they were responsible for 
only a small portion of the defect, and encouraged alternative dispute 
resolution. It left the basic tenets of tort law unchanged while 
providing special rules for this unique, critical situation. I 
supported the Conyers, Lofgren, Boucher substitute. I cannot support 
the extant H.R. 775.
  Mr. POMEROY. Mr. Chairman, I am voting today against H.R. 775, the 
Year 2000 Readiness and Responsibility Act, and am voting in favor of 
the Conyers substitute.
  Both alternatives fall short of providing the proactive measured 
relief warranted on this unique issue, but the flaw in H.R. 775 is 
fatal in its character, while the Conyers substitute offers a platform 
for further refinement in conference committee.
  The fatal flaw in H.R. 775 is the ``loser pays'' provision which 
holds a litigant liable to pay the other side's attorneys' fees if the 
plaintiff rejects a pre-trial settlement offer, and then ultimately 
secures a less favorable verdict from the court.
  The ``loser pays'' provision (Section 507) is drastic overkill which 
could actually discourage companies from fixing their computer systems 
in advance of the problem. The ``loser pays'' provision will create a 
particular problem for small businesses and middle income victims of 
Y2K failures because these groups 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.
  In effect, the possibility of an adverse verdict will deter small 
businesses from pursuing even the most egregious claims to court. The 
provision is so onerous that it would even apply to a harmed party that 
prevails in a Y2K action so long as they obtain less than a pre-trial 
settlement. This would have the perverse effect of rewarding a 
negligent or reckless defendant and punishing an innocent victim.
  I do not believe, however, the Conyers substitute does enough to 
address joint and several liability exposure. I am concerned that many 
high technology firms will be held accountable for an entire damage 
award simply because they played some small role in designing a system 
several years ago, even when the principal party responsible makes 
little or no effort to update their systems into Y2K compliance. H.R. 
777's proportionate liability provision makes a defendant liable solely 
for the portion of the judgment that corresponds to the percentage of 
responsibility of that company, and if amended to address 
responsibility for orphan shares, represents reform I could support.
  Mr. Chairman, I truly hope that we can address these outstanding 
issues and work together to strike the proper legal balance that 
addresses the Y2K liability question. Unfortunately the vote today does 
not represent an acceptable package. I vote ``no'' and hope further 
legislative activity on this issue will create an appropriate response 
that I will be able to support.
  Mr. PACKARD. Mr. Chairman, as we prepare to enter the new millennium, 
this is a time of anxious anticipation for what the next century will 
bring. However, as eager as we may be for the new millennium, we are 
also apprehensive over problems that may be looming around the corner 
with the Year 2000.
  We only have 233 days left until the computer-related doomsday 
commonly known as the Y2K problem strikes. The Y2K Computer problem 
derived from the time when the first computers were developed, and 
programmers decided to denote a year using two digits instead of four. 
In other words, without a solution to this problem, computers may read 
all dates as ``1900'' instead of ``2000'' which could cause mayhem 
around the world. Just think about all the normal daily activities that 
will be affected, airlines reservations, ATM accounts, e-mail, even 
your VCR.

[[Page 9349]]

  Not surprisingly, the Y2K computer problem has spurred several 
lawsuits. It has been reported that for every $1 spent trying to fix 
this glitch, $2-$3 are spent on litigation. This sends a clear message 
that this system is in desperate need of repair. It is absurd that we 
spend more money battling lawsuits rather than fixing the problem.
  The Year 2000 Readiness and Responsibility Act will curb the costs of 
litigation associated with the Y2K computer problem. H.R. 775 will 
establish a $250,000 limit on punitive damages awarded in Y2K lawsuits, 
and mandate a 90-day waiting period before potential plaintiffs may 
file a Y2K claim to allow businesses to correct the problem. This is 
important legislation, which will allow experts who can fix the Y2K 
computer problem to actually do so without fear of liability for other 
problems they did not create.
  Mr. Chairman, I think it is clear the time has come to focus our 
efforts on solving this obstacle, not creating additional costly 
hurdles. We need to fix Y2K related problems, rather than litigate 
them. I urge my colleagues to support H.R. 775 and fix this broken 
system.
  Mr. SHAYS. Mr. Chairman, I strongly support H.R. 775, the Year 2000 
Readiness and Responsibility Act. This bill is a balanced approach to 
prevent a slew of frivolous lawsuits from being visited upon businesses 
who made a good faith effort to fix their Y2K problems, while at the 
same time holding truly negligent businesses responsible for not 
correcting theirs.
  The extent of the Y2K problem won't be known until January 1, 2000. 
But there's one thing we can already be certain of: lawyers are lining 
up to sue everyone whose operations are even slightly hampered by the 
computer bug.
  Today, companies in my district, and all over this country, are 
working overtime to fix their Y2K problems. Let's face it: they're 
doing so because it is in their economic self-interest. No company 
wants to lose business because of an inability to fix a computer bug. 
And no company wants computer systems that cannot operate in the next 
millennium.
  But even while companies take proper steps to fix their computer 
glitches, problems may still arise, and that is why this legislation is 
necessary.
  H.R. 775 takes a number of common sense steps to reduce the number of 
law suits that stem from computer problems. The bill limits punitive 
damages to the higher of $250,000 or three times the amount awarded for 
compensatory damages, in addition to allowing for the recovery of 100 
percent of economic damages.
  The bill also mandates a 90-day waiting period before potential 
plaintiffs may file a Y2K claim to allow businesses time to correct the 
problem, makes defendants liable only for the proportion of the 
judgment for which they are at fault, and creates a ``loser-pays'' 
mechanism when a plaintiff rejects a settlement offer higher than the 
amount eventually awarded by the court.
  Today's economy is growing rapidly. But we mustn't lose sight that 
the quality of life of all Americans would be negatively affected if we 
allow the Year 2000 bug to impose excessive financial costs on American 
businesses.
  On May 6, Federal Reserve Chairman Alan Greenspan stated that our 
nation's ``phenomenal'' economic performance can be credited in large 
part to leaps in technology, which have made our economy more 
efficient. The lawsuits that would result if we don't pass this bill 
will substantially hamper our nation's economic progress. Fear of 
litigation and its excessive costs will prevent U.S. companies from 
realizing their economic potential, and that means less jobs for all 
Americans.
  H.R. 775 is vital to American businesses, which pay taxes and create 
jobs. It will allow them to use their resources to fix their Y2K 
problems--not fend off frivolous law suits.
  We need solutions--not lawsuits. We need to pass this bill.
  Mr. CONYERS. Mr. Chairman, I insert the following correspondence for 
printing in the Record:
                                                   April 19, 1999.
       Dear Representative: The undersigned organizations are 
     writing to alert you to serious problems in proposed Year 
     2000 (Y2K) legislation that could result in far-reaching 
     environmental consequences. the Y2K liability bill sponsored 
     by Representative Tom Davis (H.R. 775) threatens to remove 
     important incentives for companies to fix potentially 
     devastating Y2K computer processing problems before they 
     occur. The bill also would undermine the ability to 
     individuals and communities injured by Y2K environmental 
     accidents to seek full redress in the courts. We ask you to 
     vote against this bill and any similar legislation which 
     would remove incentives and shield companies that have failed 
     to fix their Y2K problems from legal accountability for any 
     environmental damage.
       Y2K processing problems in mainframe computers and embedded 
     chip systems have the potential to harm the environment and 
     affect public health. Although the full extent of 
     environmental problems that may result from Y2K failures is 
     not known, the Environmental Protection Agency has said that 
     ``[d]evastating effects could occur through such problems as 
     accidental contamination of drinking water, the release of 
     harmful pollutants into the air, and the inappropriate 
     distribution of chemicals and toxins into the community.'' A 
     recent report from the U.S. Chemical Safety and Hazard 
     Investigation Board stressed special concern that the Y2K 
     readiness efforts of small to medium-sized chemical 
     facilities are ``less than appropriate.''
       We join the House of Representatives in encouraging 
     companies whose computer failures could harm the environment 
     to act now to make their systems Y2K compliant, but we 
     believe the proposed bill would have the opposite effect. 
     Rational businesses facing potential liability for 
     environmental harm will attempt to limit their liability by 
     implementing measures to avoid causing such harm. We believe 
     the threat of extensive liability has already done much to 
     induce companies to become Y2K compliant. By passing bills 
     like H.R. 775, Congress would send the opposite message. The 
     proposed legislation would provide the greatest rewards for 
     inaction to those companies that have done the least to 
     resolve Y2K issues. Passage of this bill may make 
     environmental accidents from Y2K failures more likely, not 
     less.
       The bill defines a ``Y2K claim'' as any case in which a 
     plaintiff asserts a claim for damages directly or indirectly 
     caused by an actual or potential Y2K failure, or a defendant 
     asserts an actual or potential Y2K failure as a defense in a 
     civil suit. Although the bill exempts claims for physical 
     injury to individuals, this sweeping definition would impede 
     civil actions to recover compensation for damage to personal 
     property and to bring citizens enforcement actions against 
     companies that violate federal or state environmental laws by 
     releasing pollutants into the air or water. The definition of 
     Y2K action in the bill is so sweeping it appears that any 
     time defendants in a civil action wish to avail themselves of 
     the liability limitations in the bills (for example, for 
     environmental violations or community contamination), the 
     defendants need only assert that a computer date processing 
     error was the cause, and procedural hurdles for plaintiffs, 
     new legal excuses for defendants and liability limitations 
     could automatically apply.
       We urge you to oppose this bill and any others that would 
     shield defendants from full accountability for environmental 
     harm caused by their Y2K failures, interfere with enforcement 
     of state and federal environmental laws and make it more 
     difficult for individuals and communities to seek full and 
     fair redress from Y2K-related environmental releases.
           Sincerely,
     Stephan Kline,
       Alliance for Justice.
     Daniel J. Barry,
       Americans for the Environment.
     Mark Shaffer,
       Defenders of Wildlife.
     Courtney Cuff,
       Friends of the Earth.
     Jeff Wise,
       National Environmental Trust.
     Greg Wetstone,
       Natural Resources Defense Council.
     David Lochbaum,
       Union of Concerned Scientists.
     Allison LaPlante,
       U.S. PIRG.
                                  ____


 Chemical Safety Board Presents Y2K Report to Senate Special Committee

       (Washington, D.C.--March 15, 1999) Citing `significant 
     gaps' in awareness, surveillance and communications, members 
     of the U.S. Chemical Safety and Hazard Investigation Board 
     (CSB) today presented their report on potential Y2K problems 
     among chemical manufacturers, handlers and users to the 
     Senate Special Committee on the Year 2000 Technology Problem.
       CSB Chairman and Chief Executive Officer Dr. Paul L. Hill, 
     Jr. accompanied by Board Members and Y2K project coordinator 
     Dr. Gerald V. Poje, presented the report to Senate Committee 
     Chairman Robert Bennett (R-Utah). The report indicated 
     intense efforts among the nation's large chemical producers 
     and handlers, but warned of a lack of information on the 
     readiness of small and medium-sized companies in the chemical 
     industry.
       ``We're pleased that with encouragement from the Senate 
     Special committee we were able to assemble a diverse group of 
     experts from labor, industry, government and environmental 
     groups to discuss the challenges to chemical safety presented 
     by the Y2K technology problem,'' Hill said. ``Now it is up to 
     those same groups to ensure that chemical safety systems work 
     into and beyond the Year 2000.''
       The report, prepared at the request of the Senate Special 
     Committee, was the result of

[[Page 9350]]

     a collaborative effort between the CSB and industry, labor, 
     government and environmental group representatives who met in 
     a CSB-organized round table discussion of the problem last 
     December.
       ``We want to be sure that Y2K doesn't become an explosive 
     catalyst for system failures in the chemical industry.'' 
     Bennett said. ``This industry is already accustomed to 
     dealing with dangerous chemicals, and although I am hopeful 
     there won't be Y2K-related accidents in the chemical 
     industry, the risks are too great to chance the possibility 
     of failures that threaten human lives.''
       The following findings were presented in the CSB report:
       Large chemical companies with sufficient awareness, 
     leadership, planning and resources to address the Y2K problem 
     are unlikely to experience catastrophic failures--unless 
     there are widespread power failures.
       There is a lack of information about small- and medium-
     sized chemical businesses, but readiness efforts appear to be 
     ``less than appropriate.''
       Current federal safety rules provide valuable guidance for 
     risk management, but no specific Y2K guidelines for the 
     chemical industry have been provided by the federal agencies, 
     and there are no plans to do so.
       The CSB recommended that the administration convene an 
     urgent meeting of federal agencies to plan public awareness 
     campaigns, develop local and state emergency response and 
     preparedness plans, and contingencies for emergency shutdowns 
     and manual operation of chemical facilities. The report also 
     stresses the importance of preserving the national power grid 
     and local utility continuity.
       The Chemical Safety Board is an independent federal agency 
     with the mission of ensuring the safety of workers and the 
     public by preventing or minimizing the effects of industrial 
     and commercial chemical incidents. Congress modeled it after 
     the National Transportation Safety Board (NTSB), which 
     investigates aircraft and other transportation accidents for 
     the purpose of improving safety.
       Like the NTSB, the CSB is a scientific investigatory 
     organization. CSB is responsible for finding ways to prevent 
     or minimize the effects of chemical accidents at industrial 
     facilities and in transport; the Board is not an enforcement 
     or regulatory body, but can make recommendations to the 
     Congress and other federal agencies.
                                  ____


                [From the Public Citizen, May 10, 1999]

   Summary of H.R. 775, the Anti-Consumer, Anti-Remediation Y2K Bill

       H.R. 775 unfairly limits defendants' liability for injuries 
     to consumers and small businesses that result from computer 
     failures due to the Year 2000 date processing problem. Rather 
     than promoting ``readiness and responsibility,'' H.R. 775 
     gives special protections to corporations whose actions 
     result in serious harm to consumers and small companies. This 
     removes one of the primary motivating factors for the Y2K 
     remediation efforts--the threat of legal accountability 
     offered by a strong civil justice system.
       Every section of the bill benefits corporate wrongdoers at 
     the expense of injured consumers and small businesses. These 
     one-sided, unfair provisions would:
       Cap punitive damages at $250,000 or three times 
     compensatory damages, whichever is greater. For individuals 
     with a net worth of $500,000 or less or businesses or units 
     of local government with fewer than 25 employees, the cap 
     would be whichever amount is smaller. This provision gives 
     the most protection to the most irresponsible companies and 
     is a strong disincentive to quick remediation before failures 
     occur.
       Create a new and unprecedented federal standard for 
     punitive damages in Y2K cases. The bill dictates to the 
     States unprecedented new requirements for imposing punitive 
     damages, mandating that punitive damages may only be assessed 
     in Y2K cases if the plaintiff shows by clear and convincing 
     evidence that the defendant's conduct showed a conscious, 
     flagrant indifference to the rights or safety of others and 
     was the proximate cause of the harm or loss at issue in the 
     case. These requirements are in addition to any others 
     imposed by state law for awards of punitive damages--State 
     standards that are already very difficult for plaintiffs to 
     meet. Taken together, these requirements could virtually wipe 
     out punitive damages in Y2K cases. The proximate cause 
     requirement itself is unprecedented in punitive damages law 
     and is tantamount to a bar on these damages in cases where it 
     is not possible to prove a direct causal link between the 
     defendant's egregious acts and the plaintiff's injury.
       Require that plaintiffs wait up to 90 days before they can 
     file suit. Plaintiffs must give defendants notice of their 
     intent to sue, and all defendants must do is respond to the 
     notice in 30 days to say what measures they will take--if 
     any--during the next 60 days to fix the problem. But there is 
     no requirement that defects be corrected even though a 
     plaintiff company could suffer substantial losses or go out 
     of business during the waiting period.
       Limit Recovery for Economic Losses. H.R. 775 prevents 
     recovery for economic losses unless such losses are provided 
     for by contract or incidental to personal injury or property 
     damages, in addition to other requirements already in State 
     law. Under this provision, a small business forced to close 
     because of Y2K failures could be left without compensation 
     for economic losses such as lost profits or sales.
       Eliminate Joint and Several Liability. The bill makes it 
     federal policy to leave innocent consumers and small 
     businesses injured by Y2K failures uncompensated rather than 
     to make wrongdoers jointly pay for the full amount of the 
     injuries they caused. This means that injured plaintiffs run 
     the risk of remaining partially uncompensated for their Y2K 
     economic and non-economic damages if one or more defendants 
     is judgment-proof. The elimination of joint liability applies 
     even to defendants that were reckless or deliberately injured 
     consumers and small businesses.
       Cap the liability of corporate officers and executives. 
     Total liability for corporate officers and executives would 
     be limited to the greater of $100,000 or the person's annual 
     compensation--no matter how knowing or delinquent the 
     corporate officers' or executives' acts were, or how many 
     people were harmed.
       Add onerous requirements for more specific information in 
     the pleading document that initiates a case. Normally 
     plaintiffs are required to just give notice of what product 
     or action injured them, not provide evidentiary details 
     backing up their allegations at the outset. Then the 
     discovery process allows the plaintiffs' attorneys to uncover 
     facts and evidence about the defendant's actions and state of 
     mind. This bill requires plaintiffs to provide facts about 
     elements such as the defendant's state of mind before the 
     discovery process ever begins.
       Allow most class actions to be removed to federal court, 
     allowing the defendants to choose the most favorable forum. 
     Any claim with aggregated damages of $1 million could be 
     removed from State to federal court even if the suit is based 
     on State law. Plaintiffs must also show that the defect was 
     material for the majority of the class (necessitating 
     individual contact with and assessment of each class member 
     before bringing the case, a requirement that doesn't exist 
     under most, if any, current State laws).
       Allow defendants to disclaim implied warrants of fitness. 
     In most States, products are warranted to be fit for the 
     purposes for which they are sold. This bill would allow small 
     print disclaimers and consumers probably never read to keep 
     consumers from recovering for defective products and the 
     losses they cause unless the enforcement of the disclaimer 
     would ``mainifestly and directly'' contravene State law.
       The unfairness of H.R. 775 is revealed not only by its one-
     sided, anti-consumer provisions but also by its one-way 
     preemption of State law. Proponents of this bill say that it 
     would standardize laws across 50 States. However, in several 
     key areas, the bill would not standardize the law but would 
     only preempt state laws that are more pro-consumer than the 
     federal bill. For example, the limits of corporate officer 
     and executive liability only overrides State laws where 
     officers and executives are potentially liable for greater 
     amounts; it leaves in place State laws that cap officer 
     liability at an amount lower than in this federal 
     legislation. The proposal is carefully crafted to provide the 
     most protection for the industries lobbying for it, and the 
     least for those who are injured.
                                  ____


                              Media Alert

       Who: U.S. Senator Robert F. Bennett (R-Utah), Chairman, 
     Senate Special Committee on the Year 2000 Technology Problem.
       What: Tour of Sybron Chemicals Inc., Birmingham, NJ.
       Field Hearing on Chemical Industry Y2K Preparedness, 
     Trenton, NJ.
       When: Monday, May 10, 1999.
       Where: Birmingham, NJ--Trenton, NJ.
       Plant Tour and Press Availability, 10 am., Sybron 
     Chemicals, Inc., Birmingham Road, Birmingham, NJ.
       Field Hearing, 12 noon, New Jersey Statehouse Annex, 125 
     West State Street, 4th Floor--Room 11, Trenton, NJ.


                          scheduled witnesses

       Charles Jeffress, Assistant Secretary of Labor, U.S. 
     Occupational Safety and Health Agency (OSHA).
       Dr. Gerald Poje, Board Member, U.S. Chemical Safety and 
     Hazard Investigation Board.
       Paul Couvillion, Global Y2K Director, DuPont.
       Jamie Schleck, Executive Vice President, Jame Fine 
     Chemicals, Inc., Bound Brook, NJ.
       James Makris, Director, Office of Chemical Emergency 
     Preparedness and Prevention, U.S. Environmental Protection 
     Agency (EPA).
       Charlie Martin, Jr., Site Safety Director, Hickson DanChem 
     Corporation, Danville, VA.
       Robert Wages, Executive Vice President, Paper, Allied-
     Industrial, Chemical and Energy Workers (PACE) International 
     Union.
       Captain Kevin Hayden, Assistant State Director of Emergency 
     Management, State of New Jersey.
       Jane Nagoki, Board Member, Work Environment Council of New 
     Jersey.

[[Page 9351]]




                               background

       A report release in March by the U.S. Chemical Safety Board 
     found the chemical production industry among those vulnerable 
     to Y2K-related problems. the report divided the potential for 
     ``catastrophic'' events at U.S. Chemical process plants into 
     three parts:
       Failures from software or embedded chips.
       External Y2K failures such as power loss.
       Multiple accidents that may strain emergency response 
     organizations.
       The report found that Y2K assessments on small and medium-
     sized chemical facilities are ``indeterminate.''
       There are approximately 278,000 facilities in the U.S. that 
     generate, transport, treat, store or dispose of hazardous 
     chemicals such as chlorine, propane, and ammonia.
       According to the EPA, 85 million Americans live and work 
     within a 5-mile radius of 66,000 facilities handling 
     regulated amounts of high hazard chemicals.
  Mr. BOYD. Mr. Chairman, it is estimated that the Year 2000 computer 
problem could generate up to $1 trillion in litigation costs. This 
figure is staggering, particularly when we consider the billions of 
dollars that companies have already invested in trying to correct the 
crisis before it strikes. While we certainly want to guarantee the 
court system is open to small businesses who have genuine claims as a 
result of Y2K failures, we must ensure the Y2K crisis does not lead to 
a flood of frivolous lawsuits which will only tie up our courts, 
hampering the timely consideration of legitimate cases, and inhibit our 
Nation's economic prosperity.
  For these reasons, I support Congress' consideration of legislation 
to lessen the economic impact of the Y2K problem and encourage 
businesses to correct the problem before January 1 arrives so the court 
system is not bogged down with unmeritorious claims. I believe H.R. 
775, the Year 2000 Fairness and Responsibility Act, addresses many of 
these problems, and I support this legislation because I believe it is 
critical for this Congress to pass legislation dealing with Y2K 
problems before they occur.
  However, I do have concerns about certain provisions included in H.R. 
775, and I hope these problems with the bill will be addressed during 
the amendment process in the House and in conference committee 
negotiations. Most notably, I do not support the Committee passed 
``loser pays'' provision which would require a litigant who was offered 
a settlement before trial to pay the other parties' attorney fees if 
the trial verdict is less favorable to the litigant than the settlement 
conditions. In such a case, a small business who actually wins a suit 
against a large software provider would be forced to pay that 
provider's attorney fees if the final award is $1 less than the 
proposed settlement figure.
  In addition, I feel the ``reasonable efforts'' defense which the bill 
establishes for the defendant goes too far in overriding current 
contract and tort law. It is my hope that as Congress continues to 
consider this important legislation, we can develop a workable 
compromise which addresses these legislative problems and ensures both 
the plaintiffs and defendants in Y2K cases are treated fairly and 
guaranteed their day in court.
  Mr. MOORE. Mr. Chairman, I rise to explain my votes cast today on 
H.R. 775, the Year 2000 Readiness and Responsibility Act.
  I have heard from a number of businesspeople from Kansas' Third 
Congressional District who are concerned over the potential for 
liability over Year 2000 computer failures or for the cost of 
remediation. I agree that we should provide incentives to make Y2K 
systems compliant before a problem occurs, and that we should encourage 
resolution of Y2K problems without litigation, wherever possible. 
Therefore, I support a legislative solution that discourages frivolous 
litigation, while ensuring that the courts remain available for 
legitimate claims.
  I am very concerned, however, that the bill before us today goes too 
far. Enactment in its current form will lessen the incentive for 
corrective action by businesses.
  I have several specific problems with the language in H.R. 775 that 
is before us today:
  The legislation includes ``loser pays'' language providing that, if a 
plaintiff damaged by a Y2K defect rejects a plaintiff's offer to settle 
a case, and wins a verdict for even $1 less than the settlement offer, 
the plaintiff would be forced to pay the defendant's costs and 
attorneys' fees from the time of the offer. This proposal would 
fundamentally alter the American rule that each side should pay its own 
legal costs, and would impose a tremendous burden on small businesses 
harmed by Y2K defects.
  Small businesses also often must resort to class action suits in 
order to pool the resources necessary to seek remediation through the 
judicial system. This legislation would impose federal standards on 
class action lawsuits excluding potential members of a class action who 
have been damaged by a Y2K defect from the class if they fail to 
respond to notices sent through the mail. The bill also adds additional 
burdens to our overtaxed federal court system by allowing the removal 
of state class action suits to federal court if the amount the 
defendant is being sued for is greater than $1 million.
  The legislation also would limit punitive damages--assessed for the 
most outrageous misconduct--to the greater of three times the 
compensatory damages or $250,000. When the defendant is an individual 
with a net worth of less than $500,000 or a business with fewer than 25 
employees, the arbitrary limit would be the lesser of three times the 
actual damages or $250,000. I am unconvinced of the need to eliminate 
the option of assessing a greater level of punitive damages against a 
defendant capable of paying such damages, if his or her conduct was so 
flagrantly abusive that our judicial system finds additional penalties 
are warranted.
  Mr. Speaker, the Kansas Legislature considered, but did not enact, 
legislation to shield our state's businesses from Y2K liability. For 
this reason, I believe federal action in this area is appropriate. I 
supported the substitute amendment offered by Representative Lofgren, 
which addresses the legitimate needs of the high technology community 
without depriving harmed businesses and consumers of their basic 
rights. The Lofgren substitute encourages mediation, through a 90 day 
cooling off period and alternative dispute resolution procedures. It 
helps eliminate frivolous litigation, through special pleading 
requirements and mitigation of damages. It increases certainty within 
the legal process, by preserving the defenses of impossibility and 
commercial impracticability, and eliminating economic damages not 
covered by contract. Additionally, it limits joint and several 
liability.
  I know that the legislation before the House today will be 
substantially revised before being presented to the President for his 
signature. The companion measure has not yet passed the Senate; both 
versions would then be considered, and redrafted, by a House-Senate 
conference committee before being submitted to the House for a final 
vote. I hope the final version of this measure will include the kind of 
moderate, common sense reforms that my constituents and I can support. 
I will continue to work with my House and Senate colleagues toward 
achievement of this goal.
  The CHAIRMAN. All time for general debate has expired.
  Pursuant to the rule, the committee amendment in the nature of a 
substitute printed in the bill, modified by the amendments printed in 
part 1 of House Report 106-134, is considered as an original bill for 
the purpose of amendment and is considered read.
  The text of the committee amendment in the nature of a substitute, as 
modified, is as follows:

                                H.R. 775

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Year 2000 Readiness and 
     Responsibility Act''.

     SEC. 2. FINDINGS.

       The Congress finds the following:
       (1) The Congress seeks to encourage businesses to 
     concentrate their attention and resources in the short time 
     remaining before January 1, 2000, on addressing, assessing, 
     remediating, and testing their year 2000 problems, and to 
     minimize any possible business disruptions associated with 
     year 2000 issues.
       (2) It is appropriate for the Congress to enact legislation 
     to assure that year 2000 problems do not unnecessarily 
     disrupt interstate commerce or create unnecessary case loads 
     in Federal and State courts and to provide initiatives to 
     help businesses prepare and be in a position to withstand the 
     potentially devastating economic impact of the year 2000 
     problem.
       (3) Year 2000 issues will affect practically all business 
     enterprises to some degree, giving rise to a large number of 
     disputes.
       (4) Resorting to the legal system for resolution of year 
     2000 problems is not feasible for many businesses, 
     particularly small businesses, because of its complexity and 
     expense.
       (5) The delays, expense, uncertainties, loss of control, 
     adverse publicity and animosities that frequently accompany 
     litigation of business disputes can only exacerbate the 
     difficulties associated with the year 2000 date change, and 
     work against the successful resolution of those difficulties.
       (6) The Congress recognizes that every business in the 
     United States should be concerned that widespread and 
     protracted year 2000 litigation may threaten the network of 
     valued and trusted business relationships that are so 
     important to the effective functioning of the world economy, 
     and which may put unbearable strains on an overburdened 
     judicial system.
       (7) A proliferation of frivolous year 2000 actions by 
     opportunistic parties may further limit access to courts by 
     straining the resources of the legal system and depriving 
     deserving parties of their legitimate rights to relief.

[[Page 9352]]

       (8) The Congress encourages businesses to approach their 
     year 2000 disputes responsibly, and to avoid unnecessary, 
     time-consuming and costly litigation based on year 2000 
     failures. Congress supports good faith negotiations between 
     parties when there is a dispute over a year 2000 problem, 
     and, if necessary, urges the parties to enter into voluntary, 
     non-binding mediation rather than litigation.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Contract.--The term ``contract'' means a contract, 
     tariff, license, or warranty.
       (2) Defendant.--The term ``defendant'' means any person 
     against whom a year 2000 claim has been asserted.
       (3) Economic loss.--The term ``economic loss''--
       (A) means any damages other than damages arising out of 
     personal injury or damage to tangible property; and
       (B) includes, but is not limited to, damages for lost 
     profits or sales, for business interruption, for losses 
     indirectly suffered as a result of the defendant's wrongful 
     act or omission, for losses that arise because of the claims 
     of third parties, for losses that must be pleaded as special 
     damages, and consequential damages (as defined in the Uniform 
     Commercial Code or analogous State commercial law).
       (4) Governmental entity.--The term ``governmental entity'' 
     means an agency, instrumentality, other entity, or official 
     of Federal, State, or local government (including 
     multijurisdictional agencies, instrumentalities, and 
     entities).
       (5) Material defect.--The term ``material defect'' means a 
     defect in any item, whether tangible or intangible, or in the 
     provision of a service, that substantially prevents the item 
     or service from operating or functioning as designed or 
     intended. The term ``material defect'' does not include a 
     defect that has an insignificant or de minimis effect on the 
     operation or functioning of an item, that affects only a 
     component of an item that, as a whole, substantially operates 
     or functions as designed, or that has an insignificant or de 
     minimis effect on the efficacy of the service provided.
       (6) Person.--The term ``person'' means any natural person 
     and any entity, organization, or enterprise, including but 
     not limited to corporations, companies, joint stock 
     companies, associations, partnerships, trusts, and 
     governmental entities.
       (7) Personal injury.--The term ``personal injury'' means 
     any physical injury to a natural person, including death of 
     the person, and mental suffering, emotional distress, or like 
     elements of injury suffered by a natural person in connection 
     with a physical injury.
       (8) Plaintiff.--The term ``plaintiff'' means any person who 
     asserts a year 2000 claim.
       (9) Punitive damages.--The term ``punitive damages'' means 
     damages that are awarded against any person to punish such 
     person or to deter such person, or others, from engaging in 
     similar behavior in the future.
       (10) State.--The term ``State'' means any State of the 
     United States, the District of Columbia, the Commonwealth of 
     Puerto Rico, the Northern Mariana Islands, the United States 
     Virgin Islands, Guam, American Samoa, and any other territory 
     or possession of the United States, and any political 
     subdivision thereof.
       (11) Year 2000 action.--The term ``year 2000 action'' means 
     any civil action of any kind brought in any court under 
     Federal or State law, or an agency board of contract appeal 
     proceeding, in which a year 2000 claim is asserted.
       (12) Year 2000 claim.--The term ``year 2000 claim''--
       (A) means any claim or cause of action of any kind, other 
     than a claim based on personal injury, whether asserted by 
     way of claim, counterclaim, cross-claim, third-party claim, 
     defense, or otherwise, in which the plaintiff's alleged loss 
     or harm resulted, directly or indirectly, from a year 2000 
     failure;
       (B) includes a claim brought in any Federal or State court 
     by a governmental entity when acting in a commercial or 
     contracting capacity; and
       (C) does not include a claim brought by such a governmental 
     entity acting in a regulatory, supervisory, or enforcement 
     capacity.
       (13) Year 2000 failure.--The term ``year 2000 failure'' 
     means any failure by any device or system (including, without 
     limitation, any computer system and any microchip or 
     integrated circuit embedded in another device or product), or 
     any software, firmware, or other set or collection of 
     processing instructions, however constructed, in processing, 
     calculating, comparing, sequencing, displaying, storing, 
     transmitting, or receiving year 2000 date-related data.

     SEC. 4. APPLICATION OF ACT.

       (a) General Rule.--This Act applies to any year 2000 claim 
     brought after February 22, 1999, including any appeal, 
     remand, stay, or other judicial, administrative, or 
     alternative dispute resolution proceeding with respect to 
     such claim.
       (b) No New Cause of Action Created.--Nothing in this Act 
     creates a new cause of action, and, except as otherwise 
     explicitly provided in this Act, nothing in this Act expands 
     any liability otherwise imposed or limits any defense 
     otherwise available under Federal or State law.
       (c) Exclusion of Personal Injury Claims.--None of the 
     provisions of this Act shall apply to any claim based on 
     personal injury.
       (d) Preemption of State Law.--Except as otherwise provided 
     in this Act, this Act supersedes State law to the extent that 
     it establishes a rule of law applicable to a year 2000 claim 
     that is inconsistent with State law.
    TITLE I--UNIFORM PRE-LITIGATION PROCEDURES FOR YEAR 2000 ACTIONS

     SEC. 101. NOTICE PROCEDURES TO AVOID UNNECESSARY YEAR 2000 
                   ACTIONS.

       (a) Notification Period.--Before filing a year 2000 action, 
     except an action that seeks only injunctive relief, a 
     prospective plaintiff shall send by certified mail to each 
     prospective defendant a written notice that identifies, with 
     particularity as to any year 2000 claim--
       (1) any symptoms of any material defect alleged to have 
     caused harm or loss;
       (2) the harm or loss allegedly suffered by the prospective 
     plaintiff;
       (3) the facts that lead the prospective plaintiff to hold 
     such person responsible for both the defect and the injury;
       (4) the relief or action sought by the prospective 
     plaintiff; and
       (5) the name, title, address, and telephone numbers of any 
     individual who has authority to negotiate a resolution of the 
     dispute on behalf of the prospective plaintiff.

     Except as provided in subsection (c), the prospective 
     plaintiff shall not commence an action in Federal or State 
     court until the expiration of 90 days after the date on which 
     such notice is received. Such 90-day period shall be excluded 
     in the computation of any applicable statute of limitations.
       (b) Response to Notice.--
       (1) In general.--Not later than 30 days after receipt of 
     the notice specified in subsection (a), each prospective 
     defendant shall send by certified mail with return receipt 
     requested to each prospective plaintiff a written statement 
     acknowledging receipt of the notice and describing any 
     actions it has taken or will take by not later than 60 days 
     after the end of that 30-day period, to remedy the problem 
     identified by the prospective plaintiff.
       (2) Inadmissibility.--A written statement required by this 
     subsection is not admissible in evidence, under Rule 408 of 
     the Federal Rules of Evidence or any analogous rule of 
     evidence in any State, in any proceeding to prove liability 
     for, or the invalidity of, a claim or its amount, or 
     otherwise as evidence of conduct or statements made in 
     compromise negotiations.
       (3) Presumptive time of receipt.--For purposes of paragraph 
     (1), a notice under subsection (a) is presumed to be received 
     7 days after it was sent.
       (c) Failure To Respond.--If a prospective defendant fails 
     to respond to a notice provided pursuant to subsection (a) 
     within the 30-day period specified in subsection (b) or does 
     not describe the action, if any, that the prospective 
     defendant has taken or will take to remedy the problem 
     identified by the prospective plaintiff within the subsequent 
     60 days, the 90-day period specified in subsection (a) shall 
     terminate at the end of that 30-day period as to that 
     prospective defendant and the prospective plaintiff may 
     thereafter commence its action against that prospective 
     defendant.
       (d) Failure To Provide Notice.--If a defendant determines 
     that a plaintiff has filed a year 2000 action without 
     providing the notice specified in subsection (a) and without 
     awaiting the expiration of the 90-day period specified in 
     subsection (a), the defendant may treat the plaintiff's 
     complaint as such a notice by so informing the court and the 
     plaintiff in its initial response to the complaint. If any 
     defendant elects to treat the complaint as such a notice--
       (1) the court shall stay all discovery in the action 
     involving that defendant for the applicable time period 
     provided in subsection (a) or (c), as the case may be, after 
     filing of the complaint; and
       (2) the time for filing answers and all other pleadings 
     shall be tolled during such applicable period.
       (e) Effect of Contractual Waiting Periods.--In cases in 
     which a contract or a statute enacted before January 1, 1999, 
     requires notice of nonperformance and provides for a period 
     of delay prior to the initiation of suit for breach or 
     repudiation of contract, the period of delay provided in the 
     contract or the statute is controlling over the waiting 
     period specified in subsections (a) and (d).
       (f) Sanction for Frivolous Invocation of the Stay 
     Provision.--In any action in which a defendant acts pursuant 
     to subsection (d) to stay the action, and the court 
     subsequently finds that the defendant's assertion that the 
     suit is a year 2000 action was frivolous and made for the 
     purpose of causing unnecessary delay, the court may award 
     sanctions to opposing parties in accordance with the 
     provisions of Rule 11 of the Federal Rules of Civil Procedure 
     or the equivalent applicable State rule.
       (g) Computation of Time.--For purposes of this section, the 
     rules regarding computation of time shall be governed by the 
     applicable Federal or State rules of civil procedure.
       (h) Special Rule for Class Actions.--For the purpose of 
     applying this section to a year 2000 action that is 
     maintained as a class action in Federal or State court, the 
     requirements of the preceding subsections of this section 
     apply only to named plaintiffs in the class action.

     SEC. 102. ALTERNATIVE DISPUTE RESOLUTION TO AVOID UNNECESSARY 
                   YEAR 2000 ACTIONS.

       (a) In General.--(1) At any time during the 90-day period 
     specified in section 101(a), either party may request the 
     other to use alternative dispute resolution. If, based upon 
     that request, the parties enter into an agreement to use 
     alternative dispute resolution, they may also agree to an 
     extension of the 90-day period.
       (2) At any time after expiration of the 90-day period 
     specified in section 101(a), whether before

[[Page 9353]]

     or after the filing of a complaint, either party may request 
     the other to use alternative dispute resolution.
       (b) Payment of Moneys Due.--If the parties resolve their 
     dispute through alternative dispute resolution as provided in 
     subsection (a), the defendant shall pay all moneys due within 
     30 days, unless another period of time is agreed to by the 
     parties or established by contract between the parties.
       (c) Foreclosure of Further Proceedings on Resolved 
     Issues.--Resolution of the issues by the parties prior to 
     litigation through negotiation or alternative dispute 
     resolution shall foreclose any further proceedings with 
     respect to those issues.

     SEC. 103. PLEADING REQUIREMENTS.

       (a) Application With Rules of Civil Procedure.--This 
     section applies exclusively to year 2000 claims and, except 
     to the extent that this section requires additional 
     information to be contained in or attached to pleadings, 
     nothing in this section is intended to amend or otherwise 
     supersede applicable rules of Federal or State civil 
     procedure.
       (b) Nature and Amount of Damages.--With respect to any year 
     2000 claim that seeks the award of money damages, the 
     complaint shall state with particularity the nature and 
     amount of each element of damages, and the factual basis for 
     the damages calculation.
       (c) Material Defects.--With respect to any year 2000 claim 
     in which the plaintiff alleges that a product or service was 
     defective, the complaint shall identify with particularity 
     the symptoms of the material defects and shall state with 
     particularity the facts supporting the conclusion that the 
     defects are material.
       (d) Required State of Mind.--With respect to any year 2000 
     claim as to which the plaintiff may prevail only on proof 
     that the defendant acted with a particular state of mind, the 
     complaint shall, with respect to each element of the year 
     2000 claim, state with particularity the facts giving rise to 
     a strong inference that the defendant acted with the required 
     state of mind.
       (e) Motion To Dismiss; Stay of Discovery.--
       (1) Dismissal for failure to meet pleading requirements.--
     In any year 2000 action, the court shall, on the motion of 
     any defendant, dismiss the complaint without prejudice if the 
     requirements of subsection (a), (b), or (c) are not met with 
     respect to any year 2000 claim asserted therein.
       (2) Stay of discovery.--In any year 2000 action, all 
     discovery shall be stayed during the pendency of any motion 
     to dismiss, unless the court finds upon the motion of any 
     party that particularized discovery is necessary to preserve 
     evidence or prevent undue prejudice to that party.
       (3) Preservation of evidence.--
       (A) In general.--During the pendency of any stay of 
     discovery entered pursuant to this subsection, unless 
     otherwise ordered by the court, any party to the action with 
     actual notice of the allegations contained in the complaint 
     shall treat all documents, data compilations (including 
     electronically stored or recorded data), and tangible objects 
     that are in the custody or control of such person and that 
     are relevant to the allegations, as if they were a subject of 
     a continuing request for production of documents from an 
     opposing party under applicable Federal or State rules of 
     civil procedure.
       (B) Sanction for willful violation.--A party aggrieved by 
     the willful failure of an opposing party to comply with 
     subparagraph (A) may apply to the court for an order awarding 
     appropriate sanctions.

     SEC. 104. DUTY OF ALL PERSONS TO MITIGATE YEAR 2000 COMPUTER 
                   FAILURES AND RESULTING DAMAGES.

       Damages awarded for any year 2000 claim shall 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, including information made available by the defendant 
     to purchasers or users of the defendant's product or services 
     concerning means of remedying or avoiding the year 2000 
     failure.
            TITLE II--YEAR 2000 ACTIONS INVOLVING CONTRACTS

     SEC. 201. CERTAINTY OF CONTRACT TERMS FOR PREVENTION OF YEAR 
                   2000 DAMAGES.

       (a) In General.--Subject to subsection (b), in resolving 
     any year 2000 claim, any written contractual term, including 
     a limitation or an exclusion of liability, or a disclaimer of 
     warranty, shall be fully enforced unless the enforcement of 
     that term would manifestly and directly contravene applicable 
     State law embodied in any statute in effect on January 1, 
     1999, specifically addressing that term.
       (b) Interpretation of Contract.--In resolving any year 2000 
     claim as to which a contract to which subsection (a) applies 
     is silent with respect to a particular issue, the 
     interpretation of the contract with respect to that issue 
     shall be determined by applicable law in effect at the time 
     the contract was executed.

     SEC. 202. APPLICATION OF EXISTING IMPOSSIBILITY OR COMMERCIAL 
                   IMPRACTICABILITY DOCTRINES.

       (a) Doctrine of Impossibility and Commercial 
     Impracticability.--With respect to any year 2000 claim for 
     breach or repudiation of contract, the applicability of the 
     doctrines of impossibility and commercial impracticability 
     shall be determined by the law in existence on January 1, 
     1999. Nothing in this Act shall be construed as limiting or 
     impairing a party's right to assert defenses based upon such 
     doctrines.
       (b) Reasonable Efforts.--To the extent that impossibility 
     or commercial impracticability is raised as a defense against 
     a claim for breach or repudiation of contract, the party 
     asserting the defense shall be allowed to offer evidence that 
     its implementation of the contract, or its efforts to 
     implement the contract, were reasonable in light of the 
     circumstances.

     SEC. 203. PROTECTION OF PERSONS FROM LIABILITY NOT 
                   ANTICIPATED IN YEAR 2000 CONTRACTS.

       With respect to any year 2000 claim involving a breach of 
     contract or a claim related to the contract, no party may 
     claim or be awarded any category of damages unless such 
     damages are allowed by the express terms of the contract or, 
     if the contract is silent on such damages, by operation of 
     the applicable Federal or State law that governed 
     interpretation of the contract at the time the contract was 
     entered into.
 TITLE III--YEAR 2000 ACTIONS INVOLVING TORT AND OTHER NONCONTRACTUAL 
                                 CLAIMS

     SEC. 301. PROPORTIONATE LIABILITY.

       (a) In General.--A person against whom a final judgment is 
     entered with respect to a year 2000 claim, other than a claim 
     for breach or repudiation of contract, shall be liable solely 
     for the portion of the judgment that corresponds to the 
     percentage of responsibility of that person, as determined 
     under subsection (b).
       (b) Determination of Responsibility.--
       (1) In general.--With respect to any year 2000 claim, the 
     court shall instruct the jury to answer special 
     interrogatories, or if there is no jury, shall make findings, 
     with respect to each defendant and plaintiff, and each of the 
     other persons claimed by any of the parties to have caused or 
     contributed to the loss incurred by the plaintiff, including 
     (but not limited to) persons who have entered into 
     settlements with the plaintiff or plaintiffs, concerning the 
     percentage of responsibility of the defendant, the plaintiff, 
     and each such person, measured as a percentage of the total 
     fault of all persons who caused or contributed to the total 
     loss incurred by the plaintiff.
       (2) Contents of special interrogatories or findings.--The 
     responses to interrogatories, or findings, as appropriate, 
     under paragraph (1) shall specify the total amount of damages 
     that the plaintiff is entitled to recover and the percentage 
     of responsibility of each person found to have caused or 
     contributed to the loss incurred by the plaintiff or 
     plaintiffs.
       (3) Factors for consideration.--In determining the 
     percentage of responsibility under this subsection, the trier 
     of fact shall consider--
       (A) the nature of the conduct of each person alleged to 
     have caused or contributed to the loss incurred by the 
     plaintiff; and
       (B) the nature and extent of the causal relationship 
     between the conduct of each such person and the damages 
     incurred by the plaintiff or plaintiffs.
       (4) Nondisclosure to jury.--The standard for allocation of 
     damages under paragraph (1) shall not be disclosed to members 
     of the jury.

     SEC. 302. LIMITATION ON BYSTANDER LIABILITY FOR YEAR 2000 
                   FAILURES.

       (a) In General.--With respect to any year 2000 claim for 
     money damages in which--
       (1) the defendant is not the manufacturer, seller, or 
     distributor of a product, or the provider of a service, that 
     suffers or causes the year 2000 failure at issue,
       (2) the plaintiff is not in substantial privity with the 
     defendant, and
       (3) the defendant's actual or constructive awareness of an 
     actual or potential year 2000 failure is an element of the 
     claim under applicable law,

     the defendant shall not be liable unless the plaintiff, in 
     addition to establishing all other requisite elements of the 
     claim, proves by clear and convincing evidence that the 
     defendant actually knew, or recklessly disregarded a known 
     and substantial risk, that such failure would occur.
       (b) Substantial Privity.--For purposes of subsection 
     (a)(2), a plaintiff and a defendant are in substantial 
     privity when, in a year 2000 claim arising out of the 
     performance of professional services, the plaintiff and the 
     defendant either have contractual relations with one another 
     or the plaintiff is a person who, prior to the defendant's 
     performance of such services, was specifically identified to 
     and acknowledged by the defendant as a person for whose 
     special benefit the services were being performed.
       (c) Certain Claims Excluded.--For purposes of subsection 
     (a)(3), claims in which the defendant's actual or 
     constructive awareness of an actual or potential year 2000 
     failure is an element of the claim under applicable law do 
     not include claims for negligence but do include claims such 
     as fraud, constructive fraud, breach of fiduciary duty, 
     negligent misrepresentation, and interference with contract 
     or economic advantage.

     SEC. 303. REASONABLE EFFORTS DEFENSE.

       With respect to any year 2000 claim seeking money damages, 
     except with respect to claims asserting breach or repudiation 
     of contract--
       (1) the fact that a year 2000 failure occurred in an 
     entity, facility, system, product, or component that was sold 
     by, leased by, rented by, or otherwise within the control of 
     the party against whom the claim is asserted shall not 
     constitute the sole basis for recovery; and
       (2) the party against whom the claim is asserted shall be 
     entitled to establish, as a complete defense to the claim, 
     that it took measures that were reasonable under the 
     circumstances to prevent the year 2000 failure from occurring 
     or from causing the damages upon which the claim is based.

[[Page 9354]]



     SEC. 304. DAMAGES LIMITATION.

       (a) Standard for Awards.--With respect to any year 2000 
     claim for which punitive damages may be awarded under 
     applicable law, the defendant shall not be liable for 
     punitive damages unless the plaintiff proves by clear and 
     convincing evidence that conduct carried out by the defendant 
     showed a conscious, flagrant indifference to the rights or 
     safety of others and was the proximate cause of the harm or 
     loss that is the subject of the year 2000 claim. This 
     requirement is in addition to any other requirement in 
     applicable law for the award of such damages.
       (b) Caps on Punitive Damages.--
       (1) In general.--With respect to any year 2000 claim, if a 
     defendant is found liable for punitive damages, the amount of 
     punitive damages that may be awarded to a plaintiff shall not 
     exceed the greater of--
       (A) 3 times the amount awarded to the plaintiff for 
     compensatory damages; or
       (B) $250,000.
       (2) Special rule.--
       (A) In general.--Notwithstanding paragraph (1), with 
     respect to any year 2000 claim, if the defendant is found 
     liable for punitive damages and the defendant--
       (i) is an individual whose net worth does not exceed 
     $500,000,
       (ii) is an owner of an unincorporated business that has 
     fewer than 25 full-time employees, or
       (iii) is--

       (I) a partnership,
       (II) corporation,
       (III) association,
       (IV) unit of local government, or
       (V) organization,

     that has fewer than 25 full-time employees,

     the amount of punitive damages shall not exceed the lesser of 
     3 times the amount awarded to the plaintiff for compensatory 
     damages, or $250,000.
       (B) Applicability.--For purposes of determining the 
     applicability of this paragraph to a corporation, the number 
     of employees of a subsidiary of a wholly owned corporation 
     shall include all employees of a parent corporation or any 
     subsidiary of that parent corporation.
       (3) Application of limitations by the court.--The 
     limitations contained in paragraphs (1) and (2) shall be 
     applied by the court and shall not be disclosed to the jury.

     SEC. 305. RECOVERY OF ECONOMIC DAMAGES FOR YEAR 2000 CLAIMS.

       (a) Limitation on Recovery of Economic Losses.--Subject to 
     subsection (b), a plaintiff making a year 2000 claim alleging 
     a nonintentional tort may recover economic losses only upon 
     establishing, in addition to all other elements of the claim 
     under applicable law, that any one of the following 
     circumstances exists:
       (1) The recovery of such losses is provided for in a 
     contract to which the plaintiff is a party.
       (2) Such losses are incidental to a year 2000 claim based 
     on damage to tangible personal or real property caused by a 
     year 2000 failure (other than damage to property that is the 
     subject of a contract between the parties involved in the 
     year 2000 claim).
       (b) Recovery Must Be Permitted Under Applicable Law.--
     Economic losses shall be recoverable under this section only 
     if applicable Federal law, or applicable State law embodied 
     in statute or controlling judicial precedent as of January 1, 
     1999, permits the recovery of such losses.

     SEC. 306. LIABILITY OF OFFICERS AND DIRECTORS.

       (a) In General.--A director, officer, or trustee of a 
     business or other organization (including a corporation, 
     unincorporated association, partnership, or nonprofit 
     organization) shall not be personally liable with respect to 
     any year 2000 claim in his or her capacity as a director or 
     officer of the business or organization for an aggregate 
     amount that exceeds the greater of--
       (1) $100,000; or
       (2) the amount of cash compensation received by the 
     director or officer from the business or organization during 
     the 12-month period immediately preceding the act or omission 
     for which liability was imposed.
       (b) Rule of Construction.--Nothing in this section shall be 
     deemed to impose, or to permit the imposition of, personal 
     liability on any director, officer, or trustee in excess of 
     the aggregate amount of liability to which such director, 
     officer, or trustee would be subject under applicable State 
     law in existence on January 1, 1999 (including any charter or 
     bylaw authorized by such State law).
                   TITLE IV--YEAR 2000 CLASS ACTIONS

     SEC. 401. MINIMUM INJURY REQUIREMENT.

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

     SEC. 402. NOTIFICATION.

       (a) Notice by Mail.--In any year 2000 action that is 
     maintained as a class action, the court, in addition to any 
     other notice required by applicable Federal or State law, 
     shall direct notice of the action to each member of the class 
     by United States mail, return receipt requested. Persons 
     whose actual receipt of the notice is not verified by the 
     court or by counsel for one of the parties shall be excluded 
     from the class unless those persons inform the court in 
     writing, on a date no later than the commencement of trial or 
     entry of judgment, that they wish to join the class.
       (b) Contents of Notice.--In addition to any information 
     required by applicable Federal or State law, the notice 
     described in this subsection shall--
       (1) concisely and clearly describe the nature of the 
     action;
       (2) identify the jurisdiction whose law will govern the 
     action and where the action is pending;
       (3) identify any potential claims that class counsel chose 
     not to pursue so that the action would satisfy class 
     certification requirements;
       (4) describe the fee arrangements with class counsel, 
     including the hourly fee being charged, or, if it is a 
     contingency fee, the percentage of the final award which will 
     be paid, including an estimate of the total amount that would 
     be paid if the requested damages were to be granted; and
       (5) describe the procedure for opting out of the class.
       (c) Settlement.--The parties to a year 2000 action that is 
     brought as a class action may not enter into, nor request 
     court approval of, any settlement or compromise before the 
     class has been certified.

     SEC. 403. DISMISSAL PRIOR TO CERTIFICATION.

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

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

       (a) Jurisdiction.--Except as provided in subsection (b), a 
     year 2000 action may be brought as a class action in the 
     United States district court or removed to the appropriate 
     United States district court if the amount in controversy is 
     greater than the sum or value of $1,000,000 (exclusive of 
     interest and costs), computed on the basis of all claims to 
     be determined in the action.
       (b) Exception.--A year 2000 action shall not be brought or 
     removed as a class action under this section if--
       (1)(A) the substantial majority of the members of the 
     proposed plaintiff class are citizens of a single State of 
     which the primary defendants are also citizens; and
       (B) the claims asserted will be governed primarily by the 
     laws of that State; or
       (2) the primary defendants are States, State officials, or 
     other governmental entities against whom the United States 
     district court may be foreclosed from ordering relief.
    TITLE V--CLIENT PROTECTION IN CONNECTION WITH YEAR 2000 ACTIONS

     SEC. 501. SCOPE.

       This title applies to any year 2000 action asserted or 
     brought in Federal or State court.

     SEC. 502. DEFINITIONS.

       In this title:
       (1) Attorney.--the term ``attorney'' means any natural 
     person, professional law association, corporation, or 
     partnership authorized under applicable State law to practice 
     law.
       (2) Attorney's services.--The term ``attorney's services'' 
     means the professional advice or counseling of or 
     representation by an attorney, but such term shall not 
     include other assistance incurred, directly or indirectly, in 
     connection with an attorney's services, such as 
     administrative or secretarial assistance, overhead, travel 
     expenses, witness fees, or preparation by a person other than 
     the attorney of any study, analysis, report, or test.
       (3) Contingent fee.--The term ``contingent fee'' means the 
     cost or price of an attorney's services determined by 
     applying a specified percentage, which may be a firm fixed 
     percentage, a graduated or sliding percentage, or any 
     combination thereof, to the amount of the settlement or 
     judgment obtained.
       (4) Hourly fee.--The term ``hourly fee'' means the cost or 
     price per hour of an attorney's services.
       (5) Retain.--The term ``retain'' means the act of a client 
     in engaging an attorney's services, whether by express or 
     implied agreement, by seeking and obtaining the attorney's 
     services.

     SEC. 503. CONSUMER'S RIGHT TO UP-FRONT DISCLOSURE OF 
                   INFORMATION REGARDING FEES AND SETTLEMENT 
                   PROPOSALS.

       Before being retained by a client with respect to a year 
     2000 claim or a year 2000 action, an attorney shall disclose 
     to the client the client's rights under this title and the 
     client's right to receive a written statement of the 
     information described under sections 504 and 505.

     SEC. 504. INFORMATION AFTER INITIAL MEETING.

       (a) Written Disclosure of Fees.--Within 30 days after the 
     disclosure described under section 503, an attorney retained 
     by a client with respect to a year 2000 claim or a year 2000 
     action shall provide a written statement to the client 
     setting forth--
       (1) in the case of an attorney retained on an hourly basis, 
     the attorney's hourly fee for services in pursuing the year 
     2000 claim or year 2000

[[Page 9355]]

     action and any conditions, limitations, restrictions, or 
     other qualifications on the fee, including likely expenses 
     and the client's obligation for those expenses; and
       (2) in the case of an attorney retained on a contingent fee 
     basis, the attorney's contingent fee for services in pursuing 
     the year 2000 claim or year 2000 action and any conditions, 
     limitations, restrictions, or other qualifications on the 
     fee, including likely expenses and the client's obligation 
     for those expenses.
       (b) Consumer's Right to Timely Updated Information About 
     Fees.--In addition to the requirements contained in 
     subsection (a), in the case of an attorney retained on an 
     hourly basis, the attorney shall also render regular 
     statements (at least once each 90 days) to the client 
     containing a description of hourly charges and expenses 
     incurred in the pursuit of the client's year 2000 claim or 
     year 2000 action by each attorney assigned to the client's 
     matter.

     SEC. 505. CONSUMER'S RIGHT TO TIMELY UPDATED INFORMATION 
                   ABOUT SETTLEMENT PROPOSALS AND DETAILED 
                   STATEMENT OF HOURS AND FEES.

       An attorney retained by a client with respect to a year 
     2000 claim or a year 2000 action shall advise the client of 
     all written settlement offers to the client and of the 
     attorney's estimate of the likelihood of achieving a more or 
     less favorable resolution to the year 2000 claim or year 2000 
     action, the likely timing of such resolution, and the likely 
     attorney's fees and expenses required to obtain such a 
     resolution. An attorney retained by a client with respect to 
     a year 2000 claim or a year 2000 action shall, within a 
     reasonable time not later than 60 days after the date on 
     which the year 2000 claim or year 2000 action is finally 
     settled or adjudicated, provide a written statement to the 
     client containing--
       (1) in the case of an attorney retained on an hourly basis, 
     the actual number of hours expended by each attorney on 
     behalf of the client in connection with the year 2000 claim 
     or year 2000 action, the attorney's hourly rate, and the 
     total amount of hourly fees; and
       (2) in the case of an attorney retained on a contingent fee 
     basis, the total contingent fee for the attorney's services 
     in connection with the year 2000 claim or year 2000 action.

     SEC. 506. CLASS ACTIONS.

       An attorney representing a class or a defendant in a year 
     2000 action maintained as a class action shall make the 
     disclosures required under this title to the presiding judge, 
     in addition to making such disclosures to each named 
     representative of the class. The presiding judge shall, at 
     the outset of the year 2000 action, determine a reasonable 
     attorney's fee by determining the appropriate hourly rate and 
     the maximum percentage of the recovery to be paid in 
     attorney's fees. Notwithstanding any other provision of law 
     or agreement to the contrary, the presiding judge shall award 
     attorney's fees only pursuant to this title.

     SEC. 507. AWARD OF REASONABLE COSTS AND ATTORNEY'S FEES AFTER 
                   AN OFFER OF SETTLEMENT.

       (a) Offer of Settlement.--With respect to any year 2000 
     claim, any party may, at any time not less than 10 days 
     before trial, serve upon any adverse party a written offer to 
     settle the year 2000 claim for money or property, including a 
     motion to dismiss the claim, and to enter into a stipulation 
     dismissing the claim or allowing judgment to be entered 
     according to the terms of the offer. Any such offer, together 
     with proof of service thereof, shall be filed with the clerk 
     of the court.
       (b) Acceptance of Offer.--If the party receiving an offer 
     under subsection (a) serves written notice on the offeror 
     that the offer is accepted, either party may then file with 
     the clerk of the court the notice of acceptance, together 
     with proof of service thereof.
       (c) Further Offers Not Precluded.--The fact that an offer 
     under subsection (a) is made but not accepted does not 
     preclude a subsequent offer under subsection (a). Evidence of 
     an offer is not admissible for any purpose except in 
     proceedings to enforce a settlement, or to determine costs 
     and expenses under this section.
       (d) Exemption of Claims.--At any time before judgment is 
     entered, the court, upon its own motion or upon the motion of 
     any party, may exempt from this section any year 2000 claim 
     that the court finds presents a question of law or fact that 
     is novel and important and that substantially affects 
     nonparties. If a claim is exempted from this section, all 
     offers made by any party under subsection (a) with respect to 
     that claim shall be void and have no effect.
       (e) Petition for Payment of Costs, Etc.--If all offers made 
     by a party under subsection (a) with respect to a year 2000 
     claim, including any motion to dismiss the claim, are not 
     accepted and the dollar amount of the judgment, verdict, or 
     order that is finally issued (exclusive of costs, expenses, 
     and attorneys' fees incurred after judgment or trial) with 
     respect to the year 2000 claim is not more favorable to the 
     offeree with respect to the year 2000 claim than the last 
     such offer, the offeror may file with the court, within 10 
     days after the final judgment, verdict, or order is issued, a 
     petition for payment of costs and expenses, including 
     attorneys' fees, incurred with respect to the year 2000 claim 
     from the date the last such offer was made or, if the offeree 
     made an offer under this section, from the date the last such 
     offer by the offeree was made.
       (f) Order To Pay Costs, Etc.--If the court finds, pursuant 
     to a petition filed under subsection (e) with respect to a 
     year 2000 claim, that the dollar amount of the judgment, 
     verdict, or order that is finally issued is not more 
     favorable to the offeree with respect to the year 2000 claim 
     than the last such offer, the court shall order the offeree 
     to pay the offeror's costs and expenses, including attorneys' 
     fees, incurred with respect to the year 2000 claim from the 
     date the last offer was made or, if the offeree made an offer 
     under this section, from the date the last such offer by the 
     offeree was made, unless the court finds that requiring the 
     payment of such costs and expenses would be manifestly 
     unjust.
       (g) Amount of Attorney's Fees.--Attorney's fees under 
     subsection (f) shall be a reasonable attorney's fee 
     attributable to the year 2000 claim involved, calculated on 
     the basis of an hourly rate which may not exceed that which 
     the court considers acceptable in the community in which the 
     attorney practices law, taking into account the attorney's 
     qualifications and experience and the complexity of the case, 
     except that the attorney's fees under subsection (f) may not 
     exceed--
       (A) the actual cost incurred by the offeree for an 
     attorney's fee payable to an attorney for services in 
     connection with the year 2000 claim; or
       (B) if no such cost was incurred by the offeree due to a 
     contingency fee agreement, a reasonable cost that would have 
     been incurred by the offeree for an attorney's noncontingent 
     fee payable to an attorney for services in connection with 
     the year 2000 claim.
       (h) Inapplicability to Equitable Remedies.--This section 
     does not apply to any claim seeking an equitable remedy.
       (i) Inapplicability to Class Actions.--This section does 
     not apply with respect to a year 2000 action brought as a 
     class action.

     SEC. 508. ENFORCEMENT OF CONSUMER PROTECTION RULES IN YEAR 
                   2000 CLAIMS AND ACTIONS.

       A client whose attorney fails to comply with this title may 
     file a civil action for damages in the court in which the 
     year 2000 claim or year 2000 action was filed or could have 
     been filed or other court of competent jurisdiction. The 
     remedy provided by this section is in addition to any other 
     available remedy or penalty.

  The CHAIRMAN. No amendment to that amendment shall be in order except 
those printed in part 2 of House Report 106-134. Each amendment may be 
offered only in the order printed in the report, may be offered only by 
a Member designated in the report, shall be considered read, debatable 
for the time specified in the report, equally divided and controlled by 
the proponent and an opponent, shall not be subject to amendment except 
as specified in the report, and shall not be subject to a demand for 
division of the question.
  The Chairman of the Committee of the Whole may postpone a request for 
a recorded vote on any amendment and may reduce to a minimum of 5 
minutes the time for voting on any postponed question that immediately 
follows another vote, provided that the time for voting on the first 
question shall be a minimum of 15 minutes.
  It is now in order to consider amendment No. 1 printed in part 2 of 
House Report 106-134.


            Amendment No. 1 Offered by Mr. Davis of Virginia

  Mr. DAVIS of Virginia. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 1 offered by Mr. Davis of Virginia:
       Page 4, add the following after line 23 and redesignate 
     succeeding paragraphs accordingly:
       (2) Damages.--The term ``damages'' means punitive, 
     compensatory, and restitutionary relief.
       Page 8, line 18, strike ``February 22, 1999'' and insert 
     ``January 1, 1999''.

  The CHAIRMAN. Pursuant to House Resolution 166, the gentleman from 
Virginia (Mr. Davis) and the gentleman from Virginia (Mr. Boucher) each 
will control 10 minutes.
  The Chair recognizes the gentleman from Virginia (Mr. Davis).
  Mr. DAVIS of Virginia. Mr. Chairman, I yield myself such time as I 
may consume.
  Mr. Chairman, this amendment does several things.
  First of all, it changes the effective date of the legislation from 
the arbitrary date of February 22, 1999, the date of the final draft, 
to January 1, 1999. We think this makes sense. Sections 201(a) and 
202(a) of the bill addresses a Year 2000 action involving contracts as 
of the date of January 1, 1999, as the effective date of those actions. 
This language would make all such actions consistent with that date. 
Changing the effective date of the overall legislation simply makes 
H.R. 775 consistent within itself.
  In addition, the Senate version of the legislation, S. 96, has 
already changed

[[Page 9356]]

its effective date to January 1, 1999. So this action will aid in the 
consistency and ease for enactment as the two Houses get together and 
iron out any difficulties in the legislation, so we would make that 
consistent.
  The second part of this amendment completes a needed definition to 
the term ``damages'' that was left out of the bill.

                              {time}  1300

  The amendment defines damage to mean punitive, compensatory and 
restitutionary relief. The bill clearly proposes to require detailed 
pleading of the bases of Year 2000 lawsuits to reduce claims that could 
have been avoided by a plaintiff's own timely actions and to curtail 
the recovery of money damages in designated circumstances.
  The intent here is to be broad, but there is a type of monetary 
relief that the term ``damages'' generally does not include. Many 
States allow awards that are restitutionary in nature, allowing 
plaintiffs to recover money that is not based on a proven loss but on 
what it will take to make the plaintiff whole.
  This language is more inclusive and allows a broader definition of 
damage, something I would hope the other side would accept.
  This amendment will clarify that restitution and damages accomplish 
the same purpose for the purposes of this bill. This will clarify the 
point for courts on down the line so that a bill that is designed to 
limit litigation does not spawn more of it because of confusion over 
definitions, and it makes it consistent.
  Mr. Chairman, I reserve the balance of my time.
  Mr. BOUCHER. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, I rise in opposition to the amendment. My principal 
concern with the amendment offered by the gentleman from Virginia (Mr. 
Davis) is that it moves the retroactive date for the effectiveness of 
the provisions contained in H.R. 775 to January 1, 1999, and all 
lawsuits filed since January 1, 1999 that fall within the general ambit 
of H.R. 775 would then be subjected to these new rules.
  In addition to the general constitutional and fairness questions that 
concern applying new legal restrictions to lawsuits that have already 
been brought, I think this amendment raises a whole host of legal 
uncertainties.
  For example, what happens to suits that have been filed which did not 
undergo the 90-day cooling off period? What about class actions that 
have already been filed and certified? What about cases that have been 
filed that did not meet the heightened pleading standard that is set 
forth in the bill? How would this early date affect settlements that 
have been achieved and that are now pending court approval?
  I have worked in the years that I have been in the House of 
Representatives on a number of tort reforms and have supported the 
enactment of several of them that are law today. These include the 
General Aviation Liability Act and the Volunteer Protection Act. These 
bills were carefully crafted. They were very bipartisan and we always 
sought to avoid the very problems concerning retroactivity that I am 
raising at this time.
  So while I understand the motivation of the gentleman from Virginia 
(Mr. Davis) and I commend him for the leadership that he has shown in 
bringing a whole set of important concerns here today, it is with 
reluctance but with determination nonetheless that I rise in opposition 
to this amendment.
  Mr. Chairman, I reserve the balance of my time.
  Mr. DAVIS of Virginia. Mr. Chairman, I yield myself 1 minute.
  Mr. Chairman, many of the issues that have been brought to mind by my 
friend, the gentleman from Virginia (Mr. Boucher), apply to the 
February 22 date as well, which is currently in the legislation. Any 
litigation that commenced after that date, the same concerns that the 
gentleman from Virginia (Mr. Boucher) raises would apply to that. So 
whether it is February 22 or January 1 really does not make any 
difference for the majority of those concerns.
  What this does do is that litigation that is filed between January 1 
and February 22 would come under the ambit of this legislation, and it 
is that window of 6 weeks or 7 weeks where there may be pending 
legislation that would be affected under this, but as to the other 
concerns, regardless of whether this amendment passes or not, his 
concerns I think remain.
  We, of course, need an enactment date. We are trying to make it 
internally consistent so we do not have one day for enactment for 
contracts that were entered into and another for tort. We just think 
this makes it more internally consistent at this point. Again, it is 
consistent with the Senate version that is currently pending there.
  In addition to that, I would hope the gentleman would not have any 
problem with the second part of this amendment that talks about the 
term ``damages'' and broadens that in a way that I think clarifies it 
with existing State law.
  Mr. DAVIS of Virginia. Mr. Chairman, I yield back the balance of my 
time.
  Mr. BOUCHER. Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Virginia (Mr. Davis).
  The amendment was agreed to.
  The CHAIRMAN. It is now in order to consider amendment No. 2 printed 
in part 2 of House Report 106-134.


            Amendment No. 2 Offered by Mr. Moran of Virginia

  Mr. MORAN of Virginia. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 2 offered by Mr. Moran of Virginia:
       Page 9, strike lines 3 through 5 and insert the following:
       (c) Exclusion of Personal Injury Claims.--None of the 
     provisions of this Act shall apply to any claim based on 
     personal injury, including any claim asserted by way of 
     claim, counterclaim, cross-claim, third-party claim, or 
     otherwise, that arises out of an underlying action for 
     personal injury.
       Page 9, insert the following after line 9:
       (e) Certain Other Actions.--A person who is liable for 
     damages, whether by settlement or judgment, in a claim or 
     civil action to which this Act does not apply by reason of 
     subsection (c) and whose liability, in whole or in part, is 
     the result of a year 2000 failure may pursue any remedy 
     otherwise available under Federal or State law against the 
     person responsible for that year 2000 failure to the extent 
     of recovering the amount of those damages. Any such remedy 
     shall not be subject to this Act.

  The CHAIRMAN. Pursuant to House Resolution 166, the gentleman from 
Virginia (Mr. Moran) and a Member opposed each will control 10 minutes.
  The Chair recognizes the gentleman from Virginia (Mr. Moran).
  Mr. MORAN of Virginia. Mr. Chairman, I yield myself such time as I 
may consume.
  Mr. Chairman, this amendment clarifies and ensures the intent of the 
sponsors of this bill regarding the exemption of personal injury 
claims. The amendment addresses possible unintended liability for 
defendants, including doctors and other health care providers.
  Under the existing legislation, personal injury actions are excluded 
from the scope of the act, but there is some uncertainty regarding its 
impact on defendants in such claims. So this proposed amendment would 
clarify that defendants, including physicians or other health care 
providers, who incur personal injury liability caused by a Y2K defect 
would be able to recover from the manufacturer of the malfunctioning 
product to the extent of those damages.
  The amendment makes it clear that none of the provisions of H.R. 775 
shall apply to any claim based on personal injury, including any claim 
asserted by way of counterclaim, cross claim or third party claim, and 
will make sure that third party defendants brought into Y2K personal 
injury claims are not provided with the liability protections of this 
legislation.
  The amendment further clarifies the original intent of the 
legislation, and that is why I do not believe there is any opposition 
to it. I think it strengthens and balances it, and I would ask my 
colleagues to support it.

[[Page 9357]]

  Mr. Chairman, I reserve the balance of my time.
  The CHAIRMAN. Does any Member claim the time in opposition to the 
amendment?
  The Chair recognizes the gentleman from Virginia (Mr. Moran).
  Mr. MORAN of Virginia. Mr. Chairman, I yield such time as he may 
consume to the gentleman from Virginia (Mr. Boucher).
  Mr. BOUCHER. Mr. Chairman, I thank the gentleman from Virginia (Mr. 
Moran) for yielding me this time.
  Mr. Chairman, I rise for the purpose of encouraging support for his 
amendment. I think it represents a step forward in clarifying that 
actions for personal injuries are excluded from the provisions of the 
bill. It is a worthwhile provision and I encourage support for it.
  Mr. MORAN of Virginia. Mr. Chairman, I yield such time as he may 
consume to the gentleman from Virginia (Mr. Davis).
  Mr. DAVIS of Virginia. Mr. Chairman, let me just commend the 
gentleman for offering this amendment. I think it is not only just a 
clarification, it is in the spirit. I think the most obvious example 
was the case of malfunctioning equipment in a hospital that injures a 
patient. If a defendant's doctor or hospital made a claim against a 
responsible third party, this amendment makes sure that that party 
would not be able to claim the liability protections under this 
legislation that are available to the doctor or the hospital.
  It is a good clarification. I commend the gentleman and ask my 
colleagues to support it.
  Mr. MORAN of Virginia. Mr. Chairman, I yield myself my remaining time 
to make a general statement on the bill, having decided previously that 
it may be more efficient to make the statement while I was speaking on 
my amendment.
  Mr. Chairman, unless this legislation is enacted, the costs 
associated with year 2000 lawsuits will pose a very serious threat to 
our Nation's continued economic prosperity as we enter the new 
millennium. It is absolutely essential that individuals and companies 
that suffer legitimate economic injuries due to Y2K disruptions retain 
the right to sue. Left unchecked, strident litigators could discourage 
preventative action by businesses and stifle innovation and economic 
growth.
  That is why I believe that this is reasonable, bipartisan legislation 
that will lessen the economic impact of this Y2K potential problem, 
encourage businesses to fix their problems now and help to ensure a 
balanced, fair and efficient outcome to Y2K litigation.
  Excessive litigation and the potential negative impact on targeted 
industries threaten the jobs of American workers and the position of 
American industries in the world market. Unless legislation is enacted 
quickly, Y2K-related problems could result in more than a trillion 
dollars in litigation expenses.
  It has been estimated by one technology association that the amount 
of litigation associated with Y2K will be two to three dollars for 
every dollar that will actually be spent fixing the problem. In fact, a 
panel of experts at the American Bar Association's last annual meeting 
predicted that legal costs associated with Y2K suits could exceed that 
of litigation over asbestos, breast implants, tobacco and Superfund 
liability combined.
  Think about that. That is more than three times the total annual 
estimated cost of all civil litigation in the United States. It is 
inconceivable that this could occur without serious long-term damage to 
the United States economy.
  Currently, American businesses, governments and other organizations 
are tirelessly working to correct potential Y2K failures, but as 
diligently as we work on this problem it is nevertheless a daunting 
task. It involves reviewing, testing and correcting billions of lines 
of computer code.
  It has been estimated by the Federal Reserve that the U.S. Government 
will spend over $30 billion to correct its computers and American 
businesses will spend an estimated $50 billion to reprogram theirs. 
Regardless of all the efforts and all the money, some failures are 
bound to occur.
  This legislation does not protect companies that have reason to know 
they will have failures and do nothing to correct them. Even companies 
that simply run out of time will still be liable for economic damages 
that they cause. We have to understand that many of the Y2K computer 
failures will occur because of the interdependency of the United States 
in world economies. Every Y2K failure will have a compounding effect on 
other organizations that are dependent upon it.
  Those disruptions, in turn, cause further disruptions to other 
interdependent organizations and individuals. In other words, we will 
have an exponential domino effect. That is what we have to worry about.
  Many of those organizations, whether they are compliant or 
noncompliant, will nevertheless find themselves suing and being sued 
for the entire amount of damages caused by the business interruptions. 
That will create a substantial drag on our economy if we do not 
intervene, at least with this legislation.
  Every dollar that is spent on litigation and frivolous lawsuits is a 
dollar that cannot be used to invest in new equipment, pay skilled 
workers, train them or pay dividends to shareholders.
  In addition to the potentially huge costs of litigation, there is 
another unique element to this Y2K problem. In contrast to other 
problems that affect some businesses or even entire industries engaging 
in damaging activity, this Y2K problem affects all aspects of the 
economy, especially our most productive high tech industries.
  In the words of Robert Atkinson of the Progressive Policy Institute, 
it is a unique one-time event, best understood as an incomparable 
societal problem rooted in the early stages of this entire Nation's 
transformation to the digital economy.
  This is something we can see coming. We need to act now so that it 
does not have the kind of adverse consequences that it potentially 
could have.
  This bill, I emphasize, 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 they cause. In addition, all personal injury claims 
are totally exempt from this legislation.
  So it is time for Congress to protect American jobs and industry with 
this legislation. It has been endorsed by impressive coalitions of over 
300 organizations, including the Information Technology Industry 
Council, the Business Software Alliance, the National League of Cities, 
the Information Technology Association of America. It is a very wide 
array of public and private sector organizations representing both 
likely plaintiffs and defendants.
  On May 7, Alan Greenspan was quoted in the Post as saying that an 
unexpected leap in technology is primarily responsible for the Nation's 
phenomenal economic performance and the current extraordinary 
combination of strong growth, low unemployment, low inflation, high 
corporate profits and soaring stock prices.
  The goal of this 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, lead the rest 
of the world and not let it unnecessarily become a litigation bonanza.
  In his State of the Union address, President Clinton urged Congress 
to find solutions that would make the year 2000 computer program the 
last headache of the 20th century rather than the first crisis of the 
21st.
  The Year 2000 Readiness and Responsibility Act is an important part 
of the solution. By promoting remediation over unnecessary litigation, 
we can help bring in the next millennium with continued economic growth 
and prosperity. That is why I support this fair bipartisan bill, and I 
urge the support of my colleagues for this bill as well as for the 
amendment immediately before us.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Virginia (Mr. Moran).

[[Page 9358]]

  The amendment was agreed to.

                              {time}  1315

  The CHAIRMAN. It is now in order to consider amendment No. 3 printed 
in part 2 of House Report 106-134.


          Amendment No. 3 Offered by Ms. Jackson-Lee of Texas

  Ms. JACKSON-LEE of Texas. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 3 offered by Ms. Jackson-Lee of Texas:
       Page 10, line 10, strike ``Except'' and insert the 
     following: ``The notice under this subsection does not 
     require descriptions of technical specifications or other 
     technical details with respect to the material defect at 
     issue. Except''.

  The CHAIRMAN. Pursuant to House Resolution 166, the gentlewoman from 
Texas (Ms. Jackson-Lee) and a Member opposed each will control 10 
minutes.
  The Chair recognizes the gentlewoman from Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I yield myself such time as I 
may consume.
  Mr. Chairman, let me thank my committee members for considering this 
amendment, and particularly I ask my colleagues to join me in 
supporting the amendment that I offer this afternoon.
  Mr. Chairman, this amendment is a simple and noncontroversial one, I 
would hope, supported by both the U.S. Chamber of Commerce and the 
American Trial Lawyers Association, and one which I hope this House can 
support unanimously.
  My amendment simply clarifies the notification provisions in this 
bill, which regulate the filing of claims brought against defendants by 
the Y2K bug-related transgressions.
  Under section 101 of H.R. 775, a plaintiff who is filing a year 2000 
action must notify each perspective defendant of their impending action 
before their lawsuit can actually be filed. This is called a cooling 
off provision.
  Under the terms of that provision, the notification must contain, 
stated with particularity, the symptoms of the material defect, the 
alleged harm, the facts that show causation, the relief sought, and a 
contact person who has the authority to mediate the dispute.
  My amendment merely makes it crystal clear that in this initial 
notification document, that the particularity requirement does not 
exclude the use of layman's terms when providing notification to the 
defendant.
  Mr. Chairman, in one of our hearings on this particular legislation 
in the Committee on the Judiciary, and I also participated in some in 
the Committee on Science, we heard from a storekeeper who ran a fruit 
grocery store, if you will, and his expressions were very instructive 
to me. It is the day-to-day businesses that have to deal with this 
issue. It is the flower shop, the bakery shop, the grocery store, it is 
the small law office or physician's office. We think it is extremely 
important that those laymen not have the burden of talking in 
technologese in order to make their point.
  As a Member who sits on both the Committee on the Judiciary and the 
Committee on Science, and who has sat through numerous hearings on the 
Millennium bug, I know issues relating to the Y2K bug can be very 
complex. I know not everybody is a Y2K expert. I understand that not 
everyone can be expected to tell the difference between a flashable 
BIOS and firmware, or between an embedded chip and integrated chipset.
  That is why many businesses have decided, rather than to tackle the 
Y2K bug on their own, to hire a Y2K specialist to help them work 
through this rough transition. If, when all is said and done, they 
realize that their equipment or software is not Y2K compliant, the 
first problem they will face is trying to figure out what went wrong. 
This will be a difficult problem to solve if the entity they are 
seeking a response from is not cooperating and they do not have the 
technical wherewithal to solve the problem themselves.
  This problem can only be exacerbated if a court were to interpret the 
particularity requirement in the notification provision in this bill to 
mean that plaintiffs who bring causes of action must provide technical 
details about what caused the failure of their computer system, 
something that most will be unable to do without hiring another Y2K bug 
expert.
  We can fix this problem, Mr. Chairman, and save these claimants a 
great deal of money by passing this amendment today.
  The language in my amendment will also save individuals and 
businesses the additional expenses of hiring a technically savvy 
attorney before they can bring this type of action. As an attorney, Mr. 
Chairman, I am not looking to put attorneys out of business, but I 
certainly think it is important to speak on behalf of our small 
businesses across America and let them write out what they think the 
problem is, the machine just does not work, and have that be sufficient 
notice. It will also save them a great deal of trouble if they live or 
do business in an area where such lawyers are tough to find.
  This amendment protects small businesses by letting them give their 
notification in their own straightforward terms, no technical experts 
needed. Maybe later on, but not at this juncture.
  This is a commonsense and bipartisan amendment that truly improves 
this bill. I urge all of my colleagues to vote aye. I hope we can stand 
up for the small businesses of America.
  Mr. Chairman, today I rise to offer an amendment to H.R. 775, the 
Year 2000 Readiness and Responsibility Act of 1999. This amendment is a 
simple and non-controversial one, supported by both the U.S. Chamber of 
Commerce and the American Trial Lawyers Association, and one which I 
hope can be accepted by this House unanimously.
  My amendment simply clarifies the notification provisions in this 
bill, which regulate the filing of claims brought against defendants 
for Y2K bug-related transgressions. Under Section 101 of H.R. 775, a 
plaintiff who is filing a Year 2000 action, must notify each 
prospective defendant of their impending action before their lawsuit 
can actually be filed. This is the so-called ``cooling off'' provision. 
Under the terms of that provision, the notification must contain, 
stated ``with particularity''--the (1) symptoms of the material defect; 
(2) the alleged harm; (3) the facts that show causation; (4) the relief 
sought, and (5) a contact person who has the authority to mediate the 
dispute.
  My amendment merely makes it crystal clear that in this initial 
``notification'' document, that the ``particularity requirement'' does 
not exclude the use of layman's terms when providing notification to 
the defendant.
  As a Member who sits on both the Judiciary and Science Committees, 
and who has sat through numerous hearings on the Millennium Bug, I know 
that issues related to the Y2K bug can be very complex. I know that not 
everybody is a Y2K expert. I understand that not everyone can be 
expected to tell the difference between a flashable BIOS and firmware, 
or between an embedded chip and an integrated chipset.
  That is why many businesses have decided, rather than to tackle the 
Y2K bug on their own, to hire a Y2K specialist to help them work 
through this rough transition period. If when all is said and done, 
they realize that their equipment or software is not Y2K complaint, the 
first problem they will face is trying to figure out what went wrong. 
This will be a difficult problem to solve if the entity that they are 
seeking a response from is not cooperating--and they do not have the 
technical wherewithal to solve the problem themselves.
  This problem can only be exacerbated if a court were to interpret the 
``particularity'' requirement in the notification provision in this 
bill to mean that plaintiffs who bring causes of action must provide 
technical details about what caused the failure of their computer 
system--something that most will be unable to do without hiring another 
Y2K bug expert. We can fix this problem, and save these claimants a 
great deal of money, by passing this amendment today.
  The language in my amendment will also save individuals and 
businesses the additional expense of hiring a technically savvy 
attorney before they can bring this type of action. And it will also 
save them a great deal of trouble if they live or do business in an 
area where such lawyers are tough to find. This amendment protects 
small businesses by letting them give their notification in their own 
straightforward terms--no technical experts needed.

[[Page 9359]]

  This is a common sense and bi-partisan amendment that truly improves 
this bill, and I urge all of you to support it with an ``aye'' vote.
  Mr. GOODLATTE. Mr. Chairman, will the gentlewoman yield?
  Ms. JACKSON-LEE of Texas. I yield to the gentleman from Virginia.
  Mr. GOODLATTE. Mr. Chairman, I thank the gentlewoman for yielding. I 
commend her for her amendment, which I think is a positive addition to 
the legislation. I support it. We will accept the amendment.
  Mr. BOUCHER. Mr. Chairman, will the gentlewoman yield?
  Ms. JACKSON-LEE of Texas. I yield to the gentleman from Virginia.
  Mr. BOUCHER. Mr. Chairman, I thank the gentlewoman for yielding to 
me, and I want to commend her for bringing this amendment to the House. 
This makes important changes that assure that commonly-used, everyday 
language can be embodied in the notice that is sent that would trigger 
the cooling-off period. I think it definitely improves the bill, and 
would encourage support for it.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I yield myself such time as I 
may consume.
  Mr. Chairman, I want to thank both gentlemen from Virginia for their 
leadership on this issue. I also thank the gentlewoman from California 
(Ms. Lofgren) and the gentleman from Michigan (Mr. Conyers) for the 
amendment they will offer and I intend to support.
  Let us try to work together to ensure that we do the very best in 
this instance for Y2K.
  Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentlewoman from Texas (Ms. Jackson-Lee).
  The amendment was agreed to.
  The CHAIRMAN. It is now in order to consider amendment No. 4 printed 
in part 2 of House Report 106-134.


                  Amendment No. 4 Offered by Mr. Scott

  Mr. SCOTT. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 4 offered by Mr. Scott:
       Page 23, strike line 1 and all that follows through page 
     25, line 8, and redesignate succeeding sections, and 
     references thereto, accordingly.

  The CHAIRMAN. Pursuant to House Resolution 166, the gentleman from 
Virginia (Mr. Scott) and the gentleman from Virginia (Mr. Goodlatte) 
each will control 10 minutes.
  The Chair recognizes the gentleman from Virginia (Mr. Scott).
  Mr. SCOTT. Mr. Chairman, I yield myself such time as I may consume.
  This amendment would eliminate section 304 of the bill. That section, 
if it is not removed, would overturn the discretion of States to 
determine when and how punitive damages should be paid, and prescribes 
an inflexible Federal standard and process for arbitrarily limiting 
such awards.
  The bill overturns State punitive damage laws without any findings 
that they are inadequate or inappropriate. In fact, States have found 
punitive damages to be an effective tool in preventing and correcting 
reckless or wanton actions on the part of designers, manufacturers, and 
distributors of products sold to their citizens.
  One of the usual rationales for federalizing an area of the law that 
has been historically left to the States is that we want to promote 
uniformity in State laws across the Nation. However, this rationale is 
violated in this very case because States which do not allow punitive 
damages are not required to adopt them, and those with lower limits are 
not required to raise them to a uniform level. Therefore, wide 
differences in punitive damages will continue under this bill.
  There is no indication that there are too many punitive damages 
awarded. The standards in States for awarding punitive damages, those 
standards are very high as it is. Generally, they require intentional, 
reckless, and wanton behavior which threatens the health and safety of 
innocent people.
  In fact, between 1965 and 1990, one study only found 355 such awards 
across the country in product liability cases, and more than half of 
those were reduced or overturned on appeal.
  States provide for punitive damages because they know that the mere 
threat of a large punitive damages award discourages reckless or 
malicious harm to consumers. Moreover, limiting punitive damages awards 
could cause reckless and malicious defendants to conclude that it is 
more cost-effective to risk paying limited amounts than to prevent or 
correct the problems that they are causing in the first place.
  This was precisely the rationale employed by the Ford Motor Company 
regarding its Pinto. In Grisham vs. Ford Motor Company, it was found 
that the company determined that it would be cheaper to sell the 
defectively-designed car and risk paying damage awards to injured 
consumers than it would be to make the car significantly safer at a 
cost of $11 per car.
  Or we have another example where in 1980 a 4-year-old girl received 
permanent scars, second- and third-degree burns, when the pajamas she 
was wearing caught fire, and it was only after punitive damages were 
assessed that the company stopped manufacturing flammable pajamas.
  Clearly, the threat of punitive damages protects consumers from such 
profit-oriented calculations. In fact, in nearly 80 percent of the 
product liability cases in which punitive damages were awarded, the 
manufacturer made safety changes which subsequently protected future 
customers. Without this amendment, the bill will serve to protect those 
who would act irresponsibly because there is less incentive for them to 
take corrective action.
  Whatever Members' views are on the merits of limiting the discretion 
of States to determine their punitive damage laws, there is no 
justification for singling out the information technology industry for 
such treatment.
  It is clear that efforts to limit punitive damage awards and other 
provisions of the bill, such as limitations on joint and several 
liability, have more to do with pushing a general tort reform agenda 
than it does with addressing Y2K problems.
  Unfortunately, Congress is again allowing itself to be used by the 
most powerful side of a legal dispute in jerryrigging laws in their 
favor. Congress should not act as an alternative appellate court only 
available to those whose political clout is effective enough to cause a 
legislative change quickly enough to benefit their case.
  We have done that frequently in the past, and this amendment will 
allow us to continue to rely upon the States to know what is best to 
protect their consumers and the interests of businesses, and to balance 
those interests. Of all the pressing needs of Congress today, we should 
not be limiting the discretion of States to protect consumers.
  I urge my colleagues to allow States to continue to deter 
intentional, reckless, wanton, and fraudulent behavior by supporting 
this amendment.
  Mr. Chairman, I reserve the balance of my time.
  Mr. GOODLATTE. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, I am in strong opposition to this amendment. The 
punitive damage caps that are contained in this legislation are badly 
needed and entirely reasonable. They provide for $250,000 in punitive 
damages in each case, in each instance of liability, or three times the 
amount of economic loss that the plaintiff may have suffered, whichever 
is greater, except in the case of very small businesses with fewer than 
25 employees, in which case, they can still suffer $250,000 in punitive 
damages or three times their economic loss, whichever is lesser.
  The reasonable limits on punitive damages contained in H.R. 775 are 
very important. In many instances, the pleading of punitive damages 
amounts to an extortion threat to companies. Unfortunately, many 
companies settle those cases, although the company was not responsible 
for the damages alleged by the plaintiff.
  The settlement occurs because the company does not want to take a 
chance in a legal lottery that could make it liable for millions of 
dollars in

[[Page 9360]]

punitive damages when the actual harm alleged by the plaintiff is 
several orders of magnitude less.
  Let me give an example. The May 11, 1999, editions of the Wall Street 
Journal and the Washington Times illustrate what can happen when a 
company decides to take a case to trial. A jury in Alabama has awarded 
$580 million in punitive damages against Whirlpool Corporation for a 
satellite dish loan program. The satellite dishes cost $1,124. In 
addition to the punitive damages, the two plaintiffs were awarded 
$975,000 for mental anguish. This type of outrageous award is what this 
legislation is trying to curtail.
  Punitive damages are awarded primarily as punishment to a defendant. 
They are intended to deter a repeat of the offensive conduct. Punitive 
damages are not awarded to compensate losses or damage suffered by the 
plaintiff. But Y2K cases are unusual in that the conduct is not likely 
to occur again. That is because Y2K is going to resolve itself here 
with time. Thus, there is little deterrent value to awarding punitive 
damages. Without a deterrent effect, punitive damages serve only as a 
windfall to plaintiffs and attorneys.
  Additionally, since we have eliminated personal injuries from 
coverage of the bill, the only harm caused by defendants will be 
economic damage, which can be appropriately compensated without the 
need for punitive award. Furthermore, excessive punitive damage awards 
will simply compound the economic impact of Y2K litigation, and the 
cost will be passed along to the public and consumers through higher 
prices.
  In this situation, punitive damages truly become a lottery for the 
plaintiff. Thus, they should be limited. Our limitations of $250,000 or 
three times the economic loss cap are entirely reasonable. I urge my 
colleagues to oppose the amendment.
  Mr. Chairman, I reserve the balance of my time.
  Mr. SCOTT. Mr. Chairman, I yield 3 minutes to my colleague, the 
gentleman from Virginia (Mr. Boucher).
  Mr. BOUCHER. Mr. Chairman, I thank the gentleman for yielding time to 
me, and I am pleased to rise in support of the amendment offered by the 
gentleman from Virginia (Mr. Scott) which strikes the bill's cap on 
punitive damages.
  Punitive damages impose punishment for conduct that is outrageous and 
deliberate, and it deters others from engaging in similar behavior. But 
the bill would cap punitive damages in Y2K actions at the greater of 
three times the amount of actual damages, or $250,000, and the lesser 
of these two amounts would be applicable if the defendant is a small 
business.

                              {time}  1330

  In addition, a plaintiff would have to prove by clear and convincing 
evidence that conduct carried out by the defendant showed a conscious, 
flagrant indifference to the rights or safety of others and was the 
proximate causes of the harm or the loss that is the subject of the Y2K 
claim.
  Collectively, these restrictions on punitive damages are likely to 
completely eliminate not only the incentive for seeking punitive 
damages but any realistic possibility of obtaining them. These 
restrictions are counterproductive in that they provide the greatest 
amount of liability protection to the worst offenders, those who have 
done the least to resolve their Y2K problems.
  In addition, absolute caps send a message to wrongdoers that it does 
not matter how harmful or malicious their behavior, they will never be 
liable for more than a set limit. These restrictions allow companies to 
ignore Y2K problems knowing that they can never be subjected to 
punitive damages for completely reckless and irresponsible behavior.
  This is clearly not the signal that we ought to be sending during 
this crucial time for the making of Y2K remediation efforts. This is 
yet another issue that has very little to do with the Y2K problem.
  While caps on punitive damages are not needed to address the genuine 
concerns of the Y2K transition, if the provision imposing the caps 
remains as a part of this bill, the bill will be vetoed. Given the 
limited amount of time that we have to put these changes and some 
genuinely needed protections into effect, the punitive damages cap 
seriously threatens our ability to provide as a legislative matter the 
protections that truly are needed.
  So I am pleased to rise in support of the amendment offered by the 
gentleman from Virginia (Mr. Scott). In adopting this amendment, we 
will improve the product and enhance greatly the opportunity to provide 
the protections that really are needed to address the Y2K transition.
  Mr. GOODLATTE. Mr. Chairman, I yield 3 minutes to the gentleman from 
Virginia (Mr. Davis).
  Mr. DAVIS of Virginia. Mr. Chairman, I rise in strong opposition to 
this amendment of the gentleman from Virginia (Mr. Scott). I think this 
guts the purpose of the bill. Without a punitive damage cap, one 
lawsuit can bring down some of the major emerging technology companies 
in this country.
  The argument that it will be vetoed and, therefore, we have to let 
the White House write the bill I think is strained at best. How many 
times have my friends from the other side of the aisle heard this 
language and then heard the administration, whether it be Republican or 
Democrat, withdraw and end up signing a bill?
  We overturned the administration on one tort liability issue in 
securities litigation. We overturned them because we had the votes here 
to do that as well.
  If we start thinking about whatever the White House says we are going 
to do, then I think we can pack it up and go home, and we can forget 
about the separation of powers.
  I think at the end of the day we are going to have a bill that the 
White House can sign. I think we will have a bill that will be good for 
American consumers, but we are also going to have a bill that protects 
American business.
  One lawsuit without a cap on punitive damages can bring a major 
company down. It can bring them down. It can throw their employees out 
on the street, as they would have to fold up their tent. It will drive 
up the cost of insurance and drive up the cost of settlements. In 
driving up the cost of settlements on these suits, it spurs more 
lawsuits.
  So where are we? We are where a number of groups and individuals who 
testified before these committees talked about. Estimates of anywhere 
between tens of billions to hundreds of billions of dollars, upwards of 
a trillion dollars of profits from these companies, instead of going to 
their employees, instead of going to get new products so we can compete 
in the global marketplace, can be tied up in litigation, lawsuits and 
attorneys fees, bringing down the fastest-growing segment of American 
economy. That is what this is about.
  This amendment just guts the purpose of this bill. We may as well 
pack it up without some kind of punitive damage cap.
  But I think the most disturbing thing about this amendment is the 
fact that, for small businesses, we offer the protection of a $250,000 
punitive damage cap. For small businesses, they take that out as well, 
and small business would be subjected to very high caps.
  This jeopardizes every small business in America, which I think is 
why the National Federation of Independent Businesses, the Chamber of 
Commerce representing large and small businesses, are so adamantly 
opposed to this amendment.
  Mr. SCOTT. Mr. Chairman, I yield myself the balance of my time.
  Mr. Chairman, this is an important provision to protect consumers. 
The bill provides problems for consumers by making them chase around 
every possible person that may have had anything to do with it, rather 
than the person they bought the product from.
  It has a loser-pays provision where, if they do not accept an offer 
that is given and in court gets just less than that, then they owe the 
other side's attorneys fees. So they have to sometimes bet their house 
on whether or not they can get compensation. The limit on punitive 
damages in the bill

[[Page 9361]]

makes it more difficult to prove the punitive damages.
  It is interesting that my colleague points out the case in Alabama 
where the punitive damage judgment was hundreds of millions of dollars. 
I would only point out that that case is still going on. It is subject 
to appeal.
  But it is also interesting to note the allegations in that particular 
case, where the allegation was that the company was just systematically 
overcharging consumers, just ripping them off. That is exactly the kind 
of company that is going to benefit with this bill if this amendment is 
not adopted. Those who rip-off consumers, those who act with a reckless 
and wanton disregard for the safety of others, those are the ones who 
will benefit by this bill if the amendment is not adopted.
  Mr. Chairman, I would hope that we would protect consumers and adopt 
this amendment.
  Mr. GOODLATTE. Mr. Chairman I yield myself the balance of my time.
  Mr. Chairman, it is the consumers who benefit from a cap on punitive 
damages. A $580 million punitive damage award against the Whirlpool 
Corporation that I cited earlier reported in the May 11, that is 
yesterday's, edition to the Wall Street Journal and Washington Times 
gets passed on to every single consumer who buys products manufactured 
by the Whirlpool Corporation, washers and dryers and dishwashers and 
refrigerators and freezers and everything else that they manufacture.
  All of them have to pay more when one unelected jury in the State of 
Alabama gives a $580 million punitive damage award. The company has to 
spread that cost over every single item that they sell to consumers.
  Punitive damages represent a large and growing percentage of total 
damages awarded in all financial injury verdicts, rising from 44 
percent to 59 percent of total awards between 1985 and 1989 and 1990 to 
1994. In Alabama, the figure was 82 percent.
  In the jurisdictions studied for 1985 to 1994, the total amount 
awarded for punitive damages nearly doubled, from $1.2 billion in 1985 
to 1989 to $2.3 billion in 1990 to 1994. This does not relieve any 
plaintiff of any injury. It is simply a windfall.
  We do need to deter future action of bad actors. Y2K is a 
particularly good area to have caps on punitive damages because of the 
fact that there is not going to be, in most instances, any future 
action related to Y2K cases because, once we get passed next year, 
there are not going to be any more new actions or new suits related to 
this.
  I urge my colleagues to oppose this amendment.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Virginia (Mr. Scott).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.
  Mr. GOODLATTE. Mr. Chairman, I demand a recorded vote, and pending 
that, I make the point of order that a quorum is not present.
  The CHAIRMAN. Pursuant to House Resolution 166, further proceedings 
on the amendment offered by the gentleman from Virginia (Mr. Scott) 
will be postponed.
  The point of no quorum is considered withdrawn.


                 Amendment No. 5 Offered By Mr. Nadler

  Mr. NADLER. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 5 offered by Mr. Nadler:
       Strike title IV and redesignate title V, sections therein, 
     and references thereto, accordingly.

  The CHAIRMAN. Pursuant to House Resolution 166, the gentleman from 
New York (Mr. Nadler) and the gentleman from Virginia (Mr. Goodlatte) 
each will control 10 minutes.
  The Chair recognizes the gentleman from New York (Mr. Nadler).
  Mr. NADLER. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, this amendment would strike the sections of the bill 
which place severe limits and, I would say, gut any possibility of 
class-action suits in Y2K situations.
  The bill's unnecessary class action provisions will do nothing to 
address the Y2K problem and serve only to restrict the rights of 
millions of consumers who may be negatively affected by the negligence 
of some. In addition, they will burden the Federal courts, and it will 
impede justice for many others as well.
  Some of the provisions that would do this, one provision would 
require plaintiffs to prove in a class-action suit that there was a 
material defect as to a majority of the members of the class. This 
provision places a huge burden on the plaintiffs and on the court and 
is totally unnecessary.
  Plaintiffs would now be required to interview and document the same 
type of damage on thousands of people with identical injuries. For 
example, in a case involving 17,000 doctors, a recent case, about 8,500 
doctors would have had to document that they were all harmed in the 
same way because they all had the same defective computer program. This 
is a total waste of money.
  The only reason for this provision is to make it more difficult for 
people to file class-action lawsuits. After all, why are there class-
action lawsuits in the first place? Class actions are used by large 
groups of people who have suffered the same injury from a single 
defendant or group of defendants. When more than a million people were 
cheated out of $150 each because of fraud by Sears Roebuck a couple of 
years ago, it did not make sense for all of them to sue individually 
for $150. It could not have been done. Without a class-action 
proceeding, Sears Roebuck would have profited from its fraud to the 
tune of $168 million.
  By joining together, the victims, individuals or small businesses who 
are victimized by intentional or by negligent torts, can seek their 
damages collectively and hold the tort-feasors responsible. Class 
actions let the little guys sue the big guys, which, as I understand, 
is why some people want to eliminate them.
  They also help the courts. Why should the courts be forced to hear 
the same story over and over again?
  Second, the bill would limit access to the courts by requiring notice 
of the action to be sent by mail, return receipt requested. That would 
cost, according to the Post Office, $2.65 plus postage for each 
individual. So that means, for those 17,000 doctors cases, it would 
have cost $51,000 just to send a one-page notice. What a waste of 
money.
  What if there were more than 17,000 plaintiffs? What if, as in the 
Sears case, there were over a million? It would have cost over $3 
million just for notice to institute the lawsuit.
  This is simply ridiculous and is another attempt to prevent class-
action lawsuits, which is the only way for the powerless victims to 
hold the powerful accountable. It sends a message in the context of 
this bill that large companies do not have to make any real efforts to 
prepare for Y2K problems. After all, most victims of their negligence 
in failing to prepare will not be able to sue them because it would 
cost hundreds of thousands or millions of dollars just for the notice 
provision.
  The bill also removes almost all Y2K class-action lawsuits to Federal 
court. It overrides State law. It would require that any amount in 
controversy over a million dollars, which in any class-action almost 
all are for over a million dollars, it would go to Federal court.
  It would provide that if there is one diversity of citizenship, if a 
million people in New York claimed damages and one in New Jersey, that 
goes to Federal court.
  This overburdens the Federal courts. Judge Stapleton of the Court of 
Appeals for the Third Circuit testified on behalf of the Judicial 
Conference that this class-action provision in this bill would 
significantly disrupt the administration of justice in the Federal 
courts, which are overburdened.
  Of course, we hear from the other side of the aisle all the time in 
favor of not infringing on the rights of the States. That is what we 
were told in the bankruptcy debate last week. We could not have a 
ceiling on the homestead exemptions because a couple States would not 
like that.
  This bill infringes on the traditional authority of States to manage 
their

[[Page 9362]]

own judicial business. By shifting all these State-created causes of 
action to Federal court, the bills confront the Federal courts with the 
time-consuming responsibility of engaging in a lot of choice-of-law 
decisions.
  Finally, I will mention that the State courts provide most of the 
Nation's judicial capacity, so we should not limit access to this 
capacity in the face of the burden that Y2K litigation may impose.
  Contrary to the stated goals of this litigation, the class-action 
provisions, by essentially eliminating class actions and federalizing 
those that would remain, would seriously impair our ability to 
efficiently resolve Y2K disputes and again says to major companies, 
``Do not bother fixing the Y2K problem. The cost will be passed on to 
your customers and consumers because they will not be able to sue you 
because of the normal cost of litigation. We will not let them 
consolidate those costs in a class action, which is the only way small 
customers, small consumers ever can sue big tort-feasors.'' This 
provision should be called the ``Tort-feasors Rights Act of 1999.''
  Mr. Chairman, I reserve the balance of my time.
  Mr. GOODLATTE. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, I rise in strong opposition to this amendment. The 
class-action reform contained in this bill is entirely reasonable. It 
is strongly supported by a large number of bipartisan folks. In fact, 
legislation very similar to what is provided here will be introduced by 
myself, the gentleman from Virginia (Mr. Boucher) and others next week 
which will deal with class-action reform in a broader sense.
  But the principle is very simple. Nobody should be able to go forum 
shopping in one county, in one State and bring a nationwide class-
action suit before a judge that is predisposed to certify such class-
action suits when the case considered on a larger scale would not be 
brought.

                              {time}  1345

  There are judges in this country who have certified large numbers of 
class action lawsuits and, in fact, far more than the entire Federal 
Judiciary combined. And so this is simply a reasonable reform.
  The gentleman from New York makes reference to not wanting to hear 
cases over and over and over again. That is exactly what this 
legislation will do, because if it is truly a diverse class action with 
plaintiffs from across the country, the case will be removed to Federal 
Court and only heard once, whereas a class action could be brought in a 
number of States and retried a number of times under different legal 
theories. This is a sensible way to address that.
  The provisions of this section of the bill are also very reasonable 
and, in fact, some of them are included in both the substitute offered 
by the gentleman from Michigan (Mr. Conyers) and are supported by the 
White House, including the minimum injury requirement.
  This provision simply states that where it is claimed in a class 
action that a product or service is defective, one can file a class 
action only where the court finds that the alleged defect was material 
as to a majority of the class members. The provision simply says that 
an individual should not be able to file a class action unless the 
majority of people on whose behalf the action is brought have allegedly 
suffered some sort of real injury.
  The notice provision is also entirely reasonable. It is impossible to 
see how this provision can be controversial. It simply requires that 
class members in a Y2K class action must be notified directly that they 
are parties to a lawsuit, that they have claims that are going to be 
resolved, that they have certain rights in the lawsuit, and that they 
may opt out of the lawsuit if they wish. Such notice is critical to a 
fair litigation system.
  Some class members may want to opt out of a class action and insert 
their claims individually. In other instances, class members may object 
to having litigation brought on their behalf without their permission 
and for that reason may likewise wish to opt out.
  What justifying could there be for not providing such information to 
the class members who are being represented in the case, the people on 
whose behalf the litigation supposedly has been brought?
  The dismissal prior to certification provision merely provides that a 
court may rule on a motion to dismiss or a summary judgment motion 
before deciding whether a case may be prosecuted on behalf of a class. 
This provision should also not be controversial. Under present law both 
Federal and State courts engage in this practice every day.
  The Federal jurisdiction provisions, to me, are most important. H.R. 
775 would not make any changes where individual Year 2000 actions may 
be filed. If the cases are meeting Federal jurisdictional requirements, 
they may be filed in Federal District Court, otherwise they may be 
filed in an appropriate State court. However, H.R. 775 does provide 
that larger Year 2000 class actions, that is cases in which the total 
of all claims asserted exceed $1 million, may be brought in Federal 
Court or may be removed to such court by the defendant.
  There are two exceptions: Local class actions. The bill does not 
create Federal jurisdiction for Year 2000 class actions in which a 
substantial majority of the members of the proposed class are citizens 
of a single State of which the primary defendants are also citizens and 
to the claims asserted will be by the laws of that State.
  Also, State action cases. The bill creates no Federal jurisdiction 
over Year 2000 class actions in which the defendants are States or 
State entities against which a Federal District Court may be foreclosed 
from ordering relief.
  Defendants wishing to remove Year 2000 cases to Federal Court under 
these provisions would simply employ the existing removal statutes as 
they apply to Federal question matters. The bill does not alter 
existing removal procedures.
  The creation of Federal jurisdiction over certain larger Year 2000 
class actions is appropriate for several reasons:
  First, H.R. 775 is prompted in part by a concern that a proliferation 
of Year 2000 actions by opportunistic parties may further limit access 
to the courts by straining the resources of the legal system and 
depriving deserving parties of their legitimate right to relief.
  To address that concern, the bill would establish certain subsequent 
prerequisites in bringing Year 2000 class actions, particularly the 
material defect requirement I mentioned earlier. In the interest of 
consistent, rigorous enforcement of these important provisions, it is 
critical most such matters be heard by our Federal courts.
  Second, overlapping class actions asserting similar claims on behalf 
of the same persons undoubtedly will be filed in numerous different 
State courts nationwide. In the interest of consistent, efficient 
adjudication of such class actions they should be consolidated before a 
single court.
  That consolidation is not possible if those claims remain in State 
courts. Only our Federal courts can achieve sump consolidation through 
their multi-district litigation authority. Thus, allowing these cases 
access to Federal courts is critical to the fair, orderly adjudication 
of such claims.
  Third, as drafted, the bill makes proper use of Federal question 
jurisdiction. Even though State law typically will apply to many 
aspects of Year 2000 class action claims, the bill will be supplying 
important new Federal substantive law to such cases, as mentioned 
above. Thus, there is a basis for Federal question jurisdiction.
  There is precedent for the use of Federal question jurisdiction in 
such circumstances, such as the Magnuson-Moss Warranty Act that 
authorizes certain claims be asserted in Federal Court, even though 
many aspects thereof are governed by State laws.
  Fourth, the bill includes appropriate limits on the available Federal 
question jurisdiction over Year 2000 class actions to avoid having 
small or local disputes heard in Federal Court. For example, for many 
years, until 1980, the general Federal question statute

[[Page 9363]]

contained a jurisdictional amount requirement.
  Finally, by enacting H.R. 775, Congress will be declaring Year 2000 
litigation to warrant priority attention. It is thus appropriate for 
our Federal courts to be empowered to hear the largest Year 2000 cases 
that will touch the most Americans; the inevitable class actions 
asserting Year 2000 claims.
  Mr. Chairman, for these reasons I oppose this amendment and strongly 
urge my colleagues to vote against it.
  Mr. Chairman, I reserve the balance of my time.
  Mr. NADLER. Mr. Chairman, how much time do I have and how much time 
does the gentleman from Virginia have?
  The CHAIRMAN. The gentleman from New York (Mr. Nadler) has 4\1/2\ 
minutes remaining, and the gentleman from Virginia (Mr. Goodlatte) has 
2\1/2\ minutes remaining.
  Mr. NADLER. Mr. Chairman, I yield 2\1/4\ minutes to the gentlewoman 
from California (Ms. Lofgren).
  Ms. LOFGREN. Mr. Chairman, I rise in support of this amendment 
offered by the gentleman from New York (Mr. Nadler) which strikes the 
class action section of the bill.
  Class action procedures offer valuable mechanisms for the little guy 
to get into court where a defendant may have gained a substantial 
benefit through injuries to a large number of persons. I think H.R. 775 
creates an undue burden on this important pro-consumer procedure.
  We have had a discussion of some of the issues, but I think it is 
worth pointing out that some of the procedural issues are enormously 
burdensome in terms of notification. For example, one of the persons 
who argued against this in committee said if a party has to, in 
writing, deliver the notice of an offer to every member of the class 
every time an offer is made, that party could end up with a situation 
where opposing counsel may offer $10, and then that offer has to be 
mailed to everyone; and then the next hour an offer of $11 is made, and 
that offer has to be mailed to everyone in the class. It is really 
quite unworkable, and I do not see that it is really on point to the 
grit of the Y2K issue.
  The elimination of the complete diversity requirement for Y2K is also 
a problem. The Judicial Conference has told us that in their judgment 
this will swamp the Federal courts and prove to be impossible. That is 
a concern we ought to listen to, because access to courts is important 
to everyone, but it is also enormously important for businesses to have 
access to courts. If our high-tech industries cannot get into court to 
litigate infringement cases because the courts are crippled by taking 
over all class action lawsuits in America on Y2K, that will be a 
problem for all of us.
  Finally, and I do not want to be too nit-picky about it, but I do 
think it is worth pointing out that there are some provisions in the 
section that I think none of us know what they mean; for example, on 
page 29, line 20, ``the substantial majority of the members of the 
proposed plaintiff class.'' What does that mean? And ``governed 
primarily by the laws of that state.''
  The laws of conflict of laws are very particular, and I think that 
should this pass this will prove to be a complete mystery to courts who 
try to interpret it.
  Mr. GOODLATTE. Mr. Chairman, I yield myself such time as I may 
consume.
  In response to the contention that we are going to flood the Federal 
courts with class action lawsuits, that assertion is disproved by the 
U.S. Judicial Conference's own statistics.
  According to those data, the number of diversity jurisdiction cases 
being filed in Federal Court is going down dramatically. During the 12-
month period ending March 31, 1998, diversity of citizenship filings 
fell 6 percent to 54,547 cases, accounting for less than 20 percent of 
the civil cases filed in Federal Court during that period. For the 12-
month period ending December 31, 1998, the downward trend is even more 
dramatic.
  The Judicial Conference's position fails to take account of the 
impact of class action on our entire national judicial system, 
particularly the fact that many State courts face even greater burdens 
and are less equipped to deal with complex cases like class actions. 
Many State courts have crushing caseloads. And as a group, State courts 
have had a much more rapid growth in civil case filings than have 
Federal courts. Civil filings in State trial courts of general 
jurisdiction have increased 28 percent since 1984 versus only a 4 
percent increase in the Federal courts.
  For that reason, and the reasons that I outlined earlier, I urge my 
colleagues to object to the amendment.
  Mr. Chairman, I reserve the balance of my time.
  Mr. NADLER. Mr. Chairman, how much time do we each have, please?
  The CHAIRMAN. The gentleman from New York (Mr. Nadler) has 2\1/2\ 
minutes remaining, and the gentleman from Virginia (Mr. Goodlatte) has 
1 minute remaining.
  Mr. NADLER. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, the gentleman from Virginia gave the game away a few 
minutes ago when he said that he is going to be introducing a bill, 
along with others, on embracing most of these same provisions on class 
action suits in general. And that is the proper forum to discuss these 
issues.
  Why here, only with respect to Y2K? Well, why not get away with it 
where one can? Why not make a different rule for Y2K? There is no 
justification for that.
  I disagree with the gentleman's positions on class actions, but the 
proper forum to debate those is in general for class actions. If it is 
proper to require these specific notice provisions in a class action 
suit in Y2K, it is proper to require them in all class actions and we 
ought to debate that separately.
  But let us talk for a moment about the effect on Y2K. These 
provisions will eliminate 95 percent of class action suits. How many 
people will be able to afford the tens of thousands or the hundreds of 
thousands or the millions of dollars up front just for the notice 
provisions? That is why we have notice provisions in the law now, but 
not overly burdensome notice provisions.
  What the gentleman's bill would do, without this amendment, would be 
to say an individual cannot start a class action suit unless they can 
come up with all this money up front. And the intention is, little guys 
should not sue big guys. Big guys should do whatever they want and not 
be subject to justice in our courts. And that is what this bill would 
do.
  The Judicial Conference said the Federalization provisions would clog 
the courts. The gentleman says diversity cases are going down. Yes, 
they went down by 6 percent, but this would open up almost all cases to 
Federal diversity jurisdiction now, and that would clog the courts. One 
person in the class lives in a different State, we have diversity 
jurisdiction under this bill, which means essentially every class 
action suit will be in Federal Court. That will clog the Federal 
courts.
  I would remind everybody that most judicial personnel, better than 95 
percent of judicial personnel, are in State courts, not Federal courts.

                              {time}  1400

  This would make the victim pay. It is another whole discussion 
whether we should turn our American justice system upside down and make 
the victim pay if he loses the lawsuit, pay all the court costs. This 
is a discussion for a general bill. It is not a discussion for the Y2K 
bill.
  In summary, these provisions do not belong in this bill and they 
would say, essentially, to big businesses, do not bother getting 
themselves into shape for Y2K because nobody except another big 
business is going to be able to sue them because we are eliminating 
class actions here. And if that is the intent, then we ought to be up 
front about it and say we do not believe that the courts are for little 
people to sue big people, because that is what this bill does.
  Mr. GOODLATTE. Mr. Chairman, I yield myself the balance of my time.
  Mr. Chairman, we are not trying to eliminate class-action lawsuits. 
We are

[[Page 9364]]

simply saying that, if they are diverse, they ought to be heard in 
Federal court and not recognize that the current forum shopping that 
takes place where they find a judge in one small county in one State 
who likes to certify nationwide class-action suits, those class-action 
suits that have merit will be treated fairly by the entire 600-judge 
Federal judiciary and those that are appropriately certifiable will be 
certified and go forward.
  Y2K is a particularly good issue in which to reform class action 
because it is limited and because it will only proceed for a limited 
period of time.
  So in order to avoid a mass of class-action suits in a whole host of 
States, let us be practical, let us make sure that those that are truly 
diverse are removed to Federal court and heard in a more orderly, 
efficient, and economical fashion.
  I urge my colleagues to oppose this amendment.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from New York (Mr. Nadler).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.
  Mr. GOODLATTE. Mr. Chairman, I demand a recorded vote, and pending 
that, I make the point of order that a quorum is not present.
  The CHAIRMAN. Pursuant to House Resolution 166, further proceedings 
on the amendment offered by the gentleman from New York (Mr. Nadler) 
will be postponed.
  The point of no quorum is considered withdrawn.


          Sequential Votes Postponed in Committee of the Whole

  The CHAIRMAN. Pursuant to House Resolution 166, proceedings will now 
resume on those amendments on which further proceedings were postponed 
in the following order: Amendment No. 4 offered by the gentleman from 
Virginia (Mr. Scott), and amendment No. 5 offered by the gentleman from 
New York (Mr. Nadler).
  The Chair will reduce to 5 minutes the time for any electronic vote 
after the first vote in this series.


                  Amendment No. 4 Offered by Mr. Scott

  The CHAIRMAN. The pending business is the demand for a recorded vote 
on the amendment offered by the gentleman from Virginia (Mr. Scott) on 
which further proceedings were postponed and on which the noes 
prevailed by voice vote.
  The Clerk will redesignate the amendment.
  The Clerk redesignated the amendment.


                             Recorded Vote

  The CHAIRMAN. A recorded vote has been demanded.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 192, 
noes 235, not voting 6, as follows:

                             [Roll No. 124]

                               AYES--192

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baird
     Baldacci
     Baldwin
     Barrett (WI)
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bishop
     Blagojevich
     Blumenauer
     Bonior
     Borski
     Boswell
     Boucher
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson
     Clay
     Clayton
     Clement
     Clyburn
     Coble
     Conyers
     Costello
     Coyne
     Crowley
     Cummings
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Diaz-Balart
     Dicks
     Dingell
     Dixon
     Doggett
     Doyle
     Duncan
     Engel
     English
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frost
     Ganske
     Gejdenson
     Gephardt
     Gibbons
     Gonzalez
     Gordon
     Graham
     Green (TX)
     Gutierrez
     Hall (OH)
     Hastings (FL)
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holt
     Hooley
     Hoyer
     Inslee
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Jenkins
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy
     Kildee
     Kilpatrick
     Kind (WI)
     King (NY)
     Kleczka
     Klink
     Kucinich
     LaFalce
     Lampson
     Lantos
     Larson
     Lazio
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Luther
     Maloney (CT)
     Maloney (NY)
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Mink
     Moakley
     Mollohan
     Moore
     Murtha
     Nadler
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Paul
     Payne
     Pelosi
     Phelps
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Schakowsky
     Scott
     Serrano
     Sherman
     Shows
     Skelton
     Snyder
     Spratt
     Stabenow
     Stark
     Strickland
     Stupak
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Traficant
     Udall (CO)
     Udall (NM)
     Velazquez
     Vento
     Visclosky
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Weygand
     Wise
     Woolsey
     Wu
     Wynn

                               NOES--235

     Aderholt
     Archer
     Armey
     Bachus
     Baker
     Ballenger
     Barcia
     Barr
     Barrett (NE)
     Bartlett
     Bass
     Bateman
     Bereuter
     Biggert
     Bilbray
     Bilirakis
     Bliley
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boyd
     Brady (TX)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Campbell
     Canady
     Cannon
     Castle
     Chabot
     Chambliss
     Chenoweth
     Coburn
     Collins
     Combest
     Condit
     Cook
     Cooksey
     Cramer
     Crane
     Cubin
     Cunningham
     Danner
     Davis (VA)
     Deal
     DeLay
     DeMint
     Dickey
     Dooley
     Doolittle
     Dreier
     Edwards
     Ehlers
     Ehrlich
     Emerson
     Eshoo
     Everett
     Ewing
     Fletcher
     Foley
     Forbes
     Fossella
     Fowler
     Frank (MA)
     Franks (NJ)
     Frelinghuysen
     Gallegly
     Gekas
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goodling
     Goss
     Granger
     Green (WI)
     Greenwood
     Gutknecht
     Hall (TX)
     Hansen
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (IN)
     Hill (MT)
     Hilleary
     Hobson
     Hoekstra
     Holden
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Isakson
     Istook
     John
     Johnson (CT)
     Johnson, Sam
     Jones (NC)
     Kasich
     Kelly
     Kingston
     Knollenberg
     Kolbe
     Kuykendall
     LaHood
     Largent
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     McCollum
     McCrery
     McHugh
     McInnis
     McIntosh
     McKeon
     Metcalf
     Mica
     Miller (FL)
     Miller, Gary
     Minge
     Moran (KS)
     Moran (VA)
     Morella
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Ose
     Oxley
     Packard
     Pease
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pickett
     Pitts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Quinn
     Radanovich
     Ramstad
     Regula
     Reynolds
     Riley
     Roemer
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Salmon
     Sanford
     Saxton
     Scarborough
     Schaffer
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simpson
     Sisisky
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Souder
     Spence
     Stearns
     Stenholm
     Stump
     Sununu
     Sweeney
     Talent
     Tancredo
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thompson (CA)
     Thornberry
     Thune
     Tiahrt
     Toomey
     Turner
     Upton
     Walden
     Walsh
     Wamp
     Watkins
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--6

     Barton
     Brown (CA)
     Cox
     Dunn
     Napolitano
     Slaughter

                              {time}  1422

  Messrs. THOMAS, TANCREDO, GILLMOR, Mrs. Johnson of Connecticut and 
Mr. MINGE changed their vote from ``aye" to ``no.''
  Messrs. ROTHMAN, DAVIS of Illinois, ABERCROMBIE, ORTIZ and FATTAH 
changed their vote from ``no'' to ``aye.''
  So the amendment was rejected.
  The result of the vote was announced as above recorded.
  Stated against:
  Ms. DUNN. Mr. Chairman, on rollcall No. 124, I was inadvertently 
detained. Had I been present, I would have voted ``no.''


                      Announcement by the Chairman

  The CHAIRMAN. Pursuant to House Resolution 166, the Chair announces 
that he will reduce to 5 minutes the period of time within which a vote 
by electronic device will be taken on the next amendment on which the 
Chair has postponed further proceedings.


                 Amendment No. 5 Offered by Mr. Nadler

  The CHAIRMAN. The pending business is the demand for a recorded vote 
on the amendment offered by the gentleman from New York (Mr. Nadler)

[[Page 9365]]

on which further proceedings were postponed and on which the noes 
prevailed by voice vote.
  The Clerk will redesignate the amendment.
  The Clerk redesignated the amendment.


                             Recorded Vote

  The CHAIRMAN. A recorded vote has been demanded.
  A recorded vote was ordered.
  The CHAIRMAN. This is a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 180, 
noes 244, not voting 9, as follows:

                             [Roll No. 125]

                               AYES--180

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baird
     Baldacci
     Baldwin
     Barrett (WI)
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bishop
     Blagojevich
     Bonior
     Borski
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capuano
     Cardin
     Carson
     Clay
     Clayton
     Clement
     Clyburn
     Conyers
     Costello
     Coyne
     Crowley
     Cummings
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Diaz-Balart
     Dicks
     Dingell
     Dixon
     Doggett
     Duncan
     Edwards
     Engel
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Frost
     Ganske
     Gejdenson
     Gephardt
     Gonzalez
     Green (TX)
     Gutierrez
     Hastings (FL)
     Hill (IN)
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holt
     Hoyer
     Hulshof
     Inslee
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy
     Kildee
     Kilpatrick
     Kind (WI)
     Kleczka
     Klink
     Kucinich
     LaFalce
     Lampson
     Lantos
     Larson
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Luther
     Maloney (CT)
     Maloney (NY)
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McDermott
     McGovern
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Minge
     Mink
     Moakley
     Murtha
     Nadler
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Paul
     Payne
     Pelosi
     Phelps
     Price (NC)
     Pryce (OH)
     Rahall
     Rangel
     Reyes
     Rodriguez
     Roemer
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Schakowsky
     Scott
     Serrano
     Sherman
     Shows
     Smith (WA)
     Snyder
     Spratt
     Stabenow
     Stark
     Strickland
     Stupak
     Sweeney
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Traficant
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Vento
     Visclosky
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Weygand
     Wise
     Woolsey
     Wu
     Wynn

                               NOES--244

     Aderholt
     Archer
     Armey
     Bachus
     Baker
     Ballenger
     Barcia
     Barr
     Barrett (NE)
     Bartlett
     Bass
     Bateman
     Bereuter
     Biggert
     Bilbray
     Bilirakis
     Bliley
     Blumenauer
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boswell
     Boucher
     Boyd
     Brady (TX)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Campbell
     Canady
     Cannon
     Capps
     Castle
     Chabot
     Chambliss
     Chenoweth
     Coble
     Coburn
     Collins
     Combest
     Condit
     Cook
     Cooksey
     Cramer
     Crane
     Cubin
     Cunningham
     Danner
     Davis (FL)
     Davis (VA)
     Deal
     DeLay
     DeMint
     Dickey
     Dooley
     Doolittle
     Dreier
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Eshoo
     Everett
     Ewing
     Fletcher
     Foley
     Forbes
     Fossella
     Fowler
     Franks (NJ)
     Frelinghuysen
     Gallegly
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goodling
     Gordon
     Goss
     Graham
     Granger
     Green (WI)
     Greenwood
     Gutknecht
     Hall (OH)
     Hall (TX)
     Hansen
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hill (MT)
     Hilleary
     Hobson
     Hoekstra
     Holden
     Hooley
     Horn
     Hostettler
     Houghton
     Hunter
     Hutchinson
     Hyde
     Isakson
     Istook
     Jenkins
     John
     Johnson (CT)
     Johnson, Sam
     Jones (NC)
     Kasich
     Kelly
     King (NY)
     Kingston
     Knollenberg
     Kolbe
     Kuykendall
     LaHood
     Largent
     Latham
     LaTourette
     Lazio
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     McCollum
     McCrery
     McHugh
     McInnis
     McIntosh
     McIntyre
     McKeon
     Metcalf
     Mica
     Miller (FL)
     Miller, Gary
     Mollohan
     Moore
     Moran (KS)
     Moran (VA)
     Morella
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Ose
     Oxley
     Packard
     Pease
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pickett
     Pitts
     Pombo
     Pomeroy
     Porter
     Portman
     Quinn
     Radanovich
     Ramstad
     Regula
     Reynolds
     Riley
     Rivers
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Salmon
     Sanford
     Saxton
     Scarborough
     Schaffer
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simpson
     Sisisky
     Skeen
     Skelton
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Spence
     Stearns
     Stenholm
     Stump
     Sununu
     Talent
     Tancredo
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Thurman
     Tiahrt
     Toomey
     Upton
     Walden
     Wamp
     Watkins
     Watts (OK)
     Weldon (FL)
     Weller
     Whitfield
     Wicker
     Wilson
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--9

     Barton
     Brown (CA)
     Cox
     Doyle
     Herger
     Napolitano
     Slaughter
     Walsh
     Weldon (PA)

                              {time}  1430

  So the amendment was rejected.
  The result of the vote was announced as above recorded.
  The CHAIRMAN. It is now in order to consider amendment No. 6 printed 
in part 2 of House Report 106-134.


  Amendment No. 6 in the Nature of a Substitute Offered by Mr. Conyers

  Mr. CONYERS. Mr. Chairman, I offer an amendment in the nature of a 
substitute.
  The CHAIRMAN. The Clerk will designate the amendment in the nature of 
a substitute.
  The text of the amendment in the nature of a substitute is as 
follows:

       Amendment No. 6 in the nature of a substitute offered by 
     Mr. Conyers:
       Strike all after the enacting clause and insert the 
     following:

     SECTION. 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Y2K 
     Readiness and Remediation Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title and table of contents.
Sec. 2. Findings, purposes, and scope.
Sec. 3. Definitions.
Sec. 4. Preemption of State law.

                      TITLE I--COOLING OFF PERIOD

Sec. 101. Notice and opportunity to cure.
Sec. 102. Out of court settlement.

           TITLE II--SPECIFIC PLEADINGS AND DUTY TO MITIGATE

Sec. 201. Pleading requirements.
Sec. 202. Duty to mitigate damages.

         TITLE III--YEAR 2000 CIVIL ACTIONS INVOLVING CONTRACTS

Sec. 301. Contract preservation.
Sec. 302. Impossibility or commercial impracticability.

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

Sec. 401. Fair share liability.
Sec. 402. Economic losses.

                        TITLE V--EFFECTIVE DATE

Sec. 501. Effective date.

     SEC. 2. FINDINGS, PURPOSES, AND SCOPE.

       (a) Findings.--Congress finds the following:
       (1) Many information technology systems, devices, and 
     programs are not capable of recognizing certain dates in 1999 
     and after December 31, 1999, and will read dates in the year 
     2000 and thereafter as if those dates represent the year 1900 
     or thereafter or will fail to process those dates.
       (2) If not corrected, the year 2000 problem described above 
     and the resulting failures could incapacitate systems that 
     are essential to the functioning of markets, commerce, 
     consumer products, utilities, Government, and safety and 
     defense systems, in the United States and throughout the 
     world.
       (3) It is in the national interest that producers and users 
     of technology products concentrate their attention and 
     resources in the time remaining before January 1, 2000, on 
     assessing, fixing, testing, and developing contingency plans 
     to address any and all outstanding year 2000 computer date 
     change problems, so as to minimize possible disruptions 
     associated with computer failures.
       (4) The year 2000 computer date change problems may 
     adversely affect businesses and other users of technology 
     products in a unique fashion, prompting unprecedented 
     litigation and the delays, expense, uncertainties, loss of 
     control, adverse publicity, and animosities that frequently 
     accompany litigation could exacerbate the difficulties 
     associated with the Year 2000 date change and compromise 
     efforts to resolve these difficulties.
       (b) Purposes.--Based upon the power contained in article I, 
     section 8, clause 3 of the Constitution of the United States, 
     the purposes of this Act are--
       (1) to establish uniform legal standards that give all 
     businesses and users of technology products reasonable 
     incentives to

[[Page 9366]]

     solve year 2000 computer date-change problems before they 
     develop;
       (2) to encourage the resolution of year 2000 computer date-
     change disputes involving economic damages without recourse 
     to unnecessary, time consuming, and wasteful litigation; and
       (3) to lessen burdens on interstate commerce by 
     discouraging insubstantial lawsuits, while also preserving 
     the ability of individuals and businesses that have suffered 
     real injury to obtain complete relief.
       (c) Scope.--Except as provided in section 201(c) or other 
     provisions of this Act, this Act applies only to claims for 
     commercial loss.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Person.--The term ``person'' means any natural person 
     and any entity, organization, or enterprise, including any 
     corporation, company (including any joint stock company), 
     association, partnership, trust, or governmental entity.
       (2) Plaintiff.--The term ``plaintiff'' means any person who 
     asserts a year 2000 claim.
       (3) Defendant.--The term ``defendant'' means any person 
     against whom a year 2000 claim is asserted.
       (4) Contract.--The term ``contract'' means a contract, 
     tariff, license, or warranty.
       (5) Year 2000 civil action.--The term ``year 2000 civil 
     action''--
       (A) means any civil action of any kind brought in any court 
     under Federal, State, or foreign law, in which--
       (i) a year 2000 claim is asserted; or
       (ii) any claim or defense is related to an actual or 
     potential year 2000 failure;
       (B) includes a civil action commenced in any Federal or 
     State court by a department, agency, or instrumentality of 
     the United States government or of a State government when 
     acting in a commercial or contracting capacity; but
       (C) does not include any action brought by a Federal, 
     State, or other public entity, agency, or authority acting in 
     a regulatory, supervisory, or enforcement capacity.
       (6) Year 2000 claim.--The term ``year 2000 claim'' means 
     any claim or cause of action of any kind, whether asserted by 
     way of claim, counterclaim, cross-claim, third-party claim, 
     or otherwise, in which the plaintiff's alleged loss or harm 
     resulted from an actual or potential year 2000 failure.
       (7) Year 2000 failure.--The term ``year 2000 failure'' 
     means any failure by any device or system (including any 
     computer system and any microchip or integrated circuit 
     embedded in another device or product), or any software, 
     firmware, or other set or collection of processing 
     instructions, however constructed, in processing, 
     calculating, comparing, sequencing, displaying, storing, 
     transmitting, or receiving year 2000 date related data, 
     including failures--
       (A) to administer accurately or account for transitions or 
     comparisons from, into, and between the 20th and 21st 
     centuries, and between 1999 and 2000;
       (B) to recognize or process accurately any specific date, 
     or to account accurately for the status of the year 2000 as a 
     leap year, including recognition and processing of the 
     correct date on February 29, 2000.
       (8) Material defect.--
       (A) In general.--The term ``material defect'' means a 
     defect in any item, whether tangible or intangible, or in the 
     provision of a service, that substantially prevents the item 
     or service from operating or functioning as designed or 
     intended.
       (B) Exclusions.--The term does not include any defect 
     that--
       (i) has an insignificant or de minimis effect on the 
     operation or functioning of an item;
       (ii) affects only a component of an item that, as a whole, 
     substantially operates or functions as designed; or
       (iii) has an insignificant or de minimis effect on the 
     efficacy of the service provided.
       (9) Economic loss.--The term ``economic loss''--
       (A) means any damages other than damages arising out of 
     personal injury or damage to tangible property; and
       (B) includes damages for--
       (i) lost profits or sales;
       (ii) business interruption;
       (iii) losses indirectly suffered as a result of the 
     defendant's wrongful act or omission;
       (iv) losses that arise because of the claims of third 
     parties;
       (v) losses that are required to be pleaded as special 
     damages; or
       (vi) items defined as consequential damages in the Uniform 
     Commercial Code or an analogous State commercial law.
       (10) Personal injury.--The term ``personal injury'' means 
     physical injury to a natural person, including --
       (i) death as a result of a physical injury; and
       (ii) mental suffering, emotional distress, or similar 
     injuries suffered by that person in connection with a 
     physical injury.
       (11) State.--The term ``State'' means any State of the 
     United States, the District of Columbia, the Commonwealth of 
     Puerto Rico, the Northern Mariana Islands, the United States 
     Virgin Islands, Guam, American Samoa, and any other territory 
     or possession of the United States, and any political 
     subdivision thereof.
       (12) Alternative dispute resolution.--The term 
     ``alternative dispute resolution'' means any process or 
     proceeding, other than adjudication by a court or in an 
     administrative proceeding, to assist in the resolution of 
     issues in controversy, through processes such as early 
     neutral evaluation, mediation, minitrial, and arbitration.
       (13) Commercial loss.--The term ``commercial loss'' means 
     any loss or harm incurred by a plaintiff in the course of 
     operating a business enterprise that provides goods or 
     services for remuneration, if the loss or harm is to the 
     business enterprise.

     SEC. 4. PREEMPTION OF STATE LAW.

       Except as otherwise provided in this Act, this Act 
     supersedes State law to the extent that it establishes a rule 
     of law applicable to a year 2000 claim that is inconsistent 
     with State law.
                      TITLE I--COOLING OFF PERIOD

     SEC. 101. NOTICE AND OPPORTUNITY TO CURE.

       (a) Notice of Cooling Off Period.--
       (1) In general.--Before filing a year 2000 claim, except an 
     action for a claim that seeks only injunctive relief, a 
     prospective plaintiff shall be required to provide to each 
     prospective defendant a verifiable written notice that 
     identifies and describes with particularity, to the extent 
     possible before discovery--
       (A) any manifestation of a material defect alleged to have 
     caused injury;
       (B) the injury allegedly suffered or reasonably risked by 
     the prospective plaintiff; and
       (C) the relief or action sought by the prospective 
     plaintiff.
       (2) Commencement of action.--Except as provided in 
     subsections (c) and (e), a prospective plaintiff shall not 
     file a year 2000 claim in Federal or State court until the 
     expiration of the 90-day period beginning on the date on 
     which the prospective plaintiff provides notice under 
     paragraph (1).
       (b) Response to Notice.--Not later than 30 days after 
     receipt of the notice specified in subsection (a), each 
     prospective defendant shall provide each prospective 
     plaintiff a written statement that--
       (1) acknowledges receipt of the notice; and
       (2) describes any actions that the defendant will take, or 
     has taken, to address the defect or injury identified by the 
     prospective plaintiff in the notice.
       (c) Failure to Respond.--If a prospective defendant fails 
     to respond to a notice provided under subsection (a)(1) 
     during the 30-day period prescribed in subsection (b) or does 
     not include in the response a description of actions referred 
     to in subsection (b)(2)--
       (1) the 90-day waiting period identified in subsection (a) 
     shall terminate at the expiration of the 30-day period 
     specified in subsection (b) with respect to that prospective 
     defendant; and
       (2) the prospective plaintiff may commence a year 2000 
     civil action against such prospective defendant immediately 
     upon the termination of that waiting period.
       (d) Failure to Provide Notice.--
       (1) In general.--Subject to subsections (c) and (e), a 
     defendant may treat a complaint filed by the plaintiff as a 
     notice required under subsection (a) by so informing the 
     court and the plaintiff if the defendant determines that a 
     plaintiff has commenced a year 2000 civil action--
       (A) without providing the notice specified in subsection 
     (a); or
       (B) before the expiration of the waiting period specified 
     in subsection (a).
       (2) Stay.--If a defendant elects under paragraph (1) to 
     treat a complaint as a notice--
       (A) the court shall stay all discovery and other 
     proceedings in the action for the period specified in 
     subsection (a) beginning on the date of filing of the 
     complaint; and
       (B) the time for filing answers and all other pleadings 
     shall be tolled during the applicable period.
       (e) Effect of Waiting Periods.--In any case in which a 
     contract, or a statute enacted before March 1, 1999, requires 
     notice of nonperformance and provides for a period of delay 
     before the initiation of suit for breach or repudiation of 
     contract, the contractual period of delay controls and shall 
     apply in lieu of the waiting period specified in subsections 
     (a) and (d).
       (f) Sanction for Frivolous Invocation of The Stay 
     Provision.--If a defendant acts under subsection (d) to stay 
     an action, and the court subsequently finds that the 
     assertion by the defendant that the action is a year 2000 
     civil action was frivolous and made for the purpose of 
     causing unnecessary delay, the court may impose a sanction, 
     including an order to make payments to opposing parties in 
     accordance with Rule 11 of the Federal Rules of Civil 
     Procedure or applicable State rules of civil procedure.
       (g) Computation of Time.--For purposes of this section, the 
     rules regarding computation of time shall be governed by the 
     applicable Federal or State rules of civil procedure.
       (h) Single Period.--With respect to any year 2000 claim--
       (1) to which subsection (c)(2) regarding commencement of 
     actions applies, or
       (2) to which subsection (d)(2) requiring stays applies,

     only one waiting period, not exceeding 90 days, shall be 
     accorded to the parties.
       (i) Applicability of Statutes of Limitations.--Any 
     applicable statute of limitations shall toll during the 
     period during which a

[[Page 9367]]

     claimant has filed notice under subsection (a).

     SEC. 102. OUT OF COURT SETTLEMENT.

       (a) Requests Made During Notification (Cooling Off) 
     Period.--At any time during the 90-day notification period 
     under section 101(a), either party may request the other 
     party to use alternative dispute resolution. If, based upon 
     that request, the parties enter into an agreement to use 
     alternative dispute resolution, the parties may also agree to 
     an extension of that 90-day period.
       (b) Request Made After Notification Period.--At any time 
     after expiration of the 90-day notification period under 
     section 101(a), whether before or after the filing of a 
     complaint, either party may request the other party to use 
     alternative dispute resolution.
       (c) Payment Date.--If a dispute that is the subject of the 
     complaint or responsive pleading is resolved through 
     alternative dispute resolution as provided in subsection (a) 
     or (b), the defendant shall pay any amount of funds that the 
     defendant is required to pay the plaintiff under the 
     settlement not later than 30 days after the date on which the 
     parties settle the dispute, and all other terms shall be 
     implemented as promptly as possible based upon the agreement 
     of the parties, unless another period of time is agreed to by 
     the parties or established by contract between the parties.
           TITLE II--SPECIFIC PLEADINGS AND DUTY TO MITIGATE

     SEC. 201. PLEADING REQUIREMENTS.

       (a) Nature and Amount of Damages.--In any year 2000 civil 
     action in which a plaintiff seeks an award of money damages, 
     the complaint shall state with particularity to the extent 
     possible before discovery with regard to each year 2000 
     claim--
       (1) the nature and amount of each element of damages; and
       (2) the factual basis for the calculation of the damages.
       (b) Material Defects.--In any year 2000 civil action in 
     which the plaintiff alleges that a product or service was 
     defective, the complaint shall, with respect to each year 
     2000 claim--
       (1) identify with particularity the manifestations of the 
     material defects; and
       (2) state with particularity the facts supporting the 
     conclusion that the defects were material.
       (c) Material Defects in Class Action Minimum Injury 
     Requirement.--In any year 2000 civil action involving a year 
     2000 claim that a product or service is defective, the action 
     may be maintained as a class action in Federal or State court 
     with respect to that claim only if--
       (1) the claim satisfies all other prerequisites established 
     by applicable Federal or State law; and
       (2) the court finds that the alleged defect in the product 
     or service was a material defect with respect to a majority 
     of the members of the class.

     This subsection applies to year 2000 claims for commercial 
     loss and to year 2000 claims for loss or harm other than 
     commercial loss.
       (d) Motion to Dismiss; Stay of Discovery.--
       (1) Dismissal for failure to meet pleading requirements.--
     In any year 2000 civil action, the court shall, on the motion 
     of any defendant, dismiss without prejudice any year 2000 
     claim asserted in the complaint if any of the requirements 
     under subsection (a), (b), or (e) is not met with respect to 
     the claim.
       (2) Stay of discovery.--Subject to the 90-day single period 
     provisions of section 101(h), in any year 2000 civil action, 
     all discovery and other proceedings shall be stayed during 
     the pendency of any motion pursuant to this subsection to 
     dismiss, unless the court finds upon the motion of any party 
     that particularized discovery is necessary to preserve 
     evidence or prevent undue prejudice to that party.
       (3) Preservation of evidence.--
       (A) In general.--
       (i) Treatment of evidence.-- During the pendency of any 
     stay of discovery entered under paragraph (2), unless 
     otherwise ordered by the court, any party to the action shall 
     treat the items described in clause (ii) as if they were a 
     subject of a continuing request for production of documents 
     from an opposing party under applicable Federal or State 
     rules of civil procedure.
       (ii) Items.--The items described in this clause are all 
     documents, data compilations (including electronically stored 
     or recorded data), and tangible objects that--

       (I) are in the custody or control of the party described in 
     clause (i); and
       (II) are relevant to the allegations.

       (B) Sanction for willful violation.--A party aggrieved by 
     the willful failure of an opposing party to comply with 
     subparagraph (A) may apply to the court for an order awarding 
     appropriate sanctions.

     SEC. 202. DUTY TO MITIGATE DAMAGES.

       Damages awarded for any year 2000 claim shall exclude any 
     amount that the plaintiff reasonably should have avoided in 
     light of any disclosure or information provided to the 
     plaintiff by defendant.
         TITLE III--YEAR 2000 CIVIL ACTIONS INVOLVING CONTRACTS

     SEC. 301. CONTRACT PRESERVATION.

       (a) In general.--Subject to subsection (b), in resolving 
     any year 2000 claim each written contractual term, including 
     any limitation or exclusion of liability or disclaimer of 
     warranty, shall be strictly enforced, unless the enforcement 
     of that term would contravene applicable State law as of 
     January 1, 1999.
       (b) Interpretation of Contract.--In any case in which a 
     contract under subsection (a) is silent with respect to a 
     particular issue, the interpretation of the contract with 
     respect to that issue shall be determined by applicable law 
     in effect at the time that the contract was entered into.

     SEC. 302. IMPOSSIBILITY OR COMMERCIAL IMPRACTICABILITY.

       (a) In General.--In any year 2000 civil action in which a 
     year 2000 claim is advanced alleging a breach of contract or 
     related claim, in resolving that claim applicability of the 
     doctrines of impossibility and commercial impracticability 
     shall be determined by applicable law in existence on January 
     1, 1999.
       (b) Rule of Construction.--Nothing in this Act shall be 
     construed as limiting or impairing a party's right to assert 
     defenses based upon the doctrines referred to in subsection 
     (a).
      TITLE IV--YEAR 2000 CIVIL ACTIONS INVOLVING TORT AND OTHER 
                         NONCONTRACTUAL CLAIMS

     SEC. 401. FAIR SHARE LIABILITY.

       (a) General Rule.--Subject to subsection (d), in any year 
     2000 civil action, the liability of each tort feasor or 
     noncontractual defendant shall be joint and several, subject 
     to the court's equitable discretion to determine, following 
     upon a finding of proportional responsibility, that the 
     liability of a tort feasor or noncontractual defendant (as 
     the case may be) of minimal responsibility shall be several 
     only and not joint.
       (b) Amount of Liability.--Each defendant that is severally 
     liable in a year 2000 civil action shall be liable only for 
     the amount of loss allocated to the defendant in direct 
     proportion to the percentage of responsibility of the 
     defendant (determined in accordance with subsection (c)) for 
     such harm.
       (c) Determination of Responsibility.--
       (1) In general.--In any year 2000 civil action, the court 
     shall instruct the jury to answer special interrogatories, or 
     if there is no jury, make findings, with respect to each 
     defendant and plaintiff, and each of the other persons 
     claimed by any of the parties to have caused or contributed 
     to the loss incurred by the plaintiff, including persons who 
     have entered into settlements with the plaintiff or 
     plaintiffs, concerning the percentage of responsibility of 
     that person, measured as a percentage of the total fault of 
     all persons who caused or contributed to the total loss 
     incurred by the plaintiff.
       (2) Contents of special interrogatories or findings.--The 
     responses to interrogatories, or findings, as appropriate, 
     under paragraph (1) shall specify--
       (A) the total amount of damages that the plaintiff is 
     entitled to recover; and
       (B) the percentage of responsibility of each person found 
     to have caused or contributed to the loss incurred by the 
     plaintiff or plaintiffs.
       (3) Factors for consideration.--In determining the 
     percentage of responsibility under this paragraph, the trier 
     of fact shall consider--
       (A) the nature of the conduct of each person alleged to 
     have caused or contributed to the loss incurred by the 
     plaintiff; and
       (B) the nature and extent of the causal relationship 
     between the conduct of each such person and the damages 
     incurred by the plaintiff or plaintiffs.
       (d) Special Rules for Joint Liability.--
       (1) In general.--Notwithstanding subsection (a), in any 
     case the liability of a defendant to which subsection (a) 
     applies in a year 2000 civil action is joint and several if 
     the trier of fact specifically determines that the defendant 
     --
       (A) acted with specific intent to injure the plaintiff; or
       (B) knowingly committed fraud.
       (2) Knowing commission of fraud described.--For purposes of 
     paragraph 1(B), a defendant knowingly committed fraud if the 
     defendant--
       (A) made an untrue statement of a material fact, with 
     actual knowledge that the statement was false;
       (B) omitted a fact necessary to make the statement not be 
     misleading, with actual knowledge that, as a result of the 
     omission, the statement was false; and
       (C) knew that the plaintiff was reasonably likely to rely 
     on the false statement.
       (3) Recklessness.--For purposes of paragraph (1), reckless 
     conduct by the defendant does not constitute either a 
     specific intent to injure, or the knowing commission of 
     fraud, by the defendant.
       (e) Contribution.--A defendant who is a jointly and 
     severally liable for damages in a year 2000 civil action may 
     recover contribution for such damages from any other person 
     who, if joined in the original action, would have been liable 
     for the same damages. A claim for contribution shall be 
     determined based on the percentage of responsibility of the 
     claimant and of each person against whom a claim for such 
     contribution is made.
       (f) Statute of Limitations for Contribution.--An action for 
     contribution under subsection (e) in connection with a year 
     2000

[[Page 9368]]

     civil action may not be brought later than six months after 
     the entry of a final, nonappealable judgment in the year 2000 
     civil action.

     SEC. 402. ECONOMIC LOSSES.

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

     SEC. 501. EFFECTIVE DATE.

       This Act and the amendments made by this Act shall take 
     effect on the date of enactment of this Act.

  The CHAIRMAN. Pursuant to House Resolution 166, the gentleman from 
Michigan (Mr. Conyers) and the gentleman from Tennessee (Mr. Bryant) 
each will control 30 minutes.
  The Chair recognizes the gentleman from Michigan (Mr. Conyers).
  Mr. CONYERS. Mr. Chairman, I yield such time as she may consume to 
the gentlewoman from California (Ms. Lofgren) to speak on behalf of 
this very important substitute.
  Ms. LOFGREN. Mr. Chairman, I represent San Jose, California, that 
calls itself the capital of Silicon Valley, and, as my colleagues can 
imagine, addressing the issues posed by Y2K liability is something of 
interest to me. At home among high tech CEO's there is a division of 
opinion on whether Y2K will be a huge deal or a little tiny deal. Some 
people, some CEO's and high tech-ers think that it will be a large 
problem. Others think it has been much overrated.
  For myself, I think the possibility of extensive litigation is 
sufficient for this body to take an act. In a way I think about it as I 
think about the Titanic. The chances of the Titanic running into the 
iceberg were very small, but when it happened it was catastrophic, and 
so I do think it is appropriate for us to put in place some life rafts 
and some rowboats so that the economy of the United States is not 
impaired by litigation that is frivolous or unnecessary.
  On the other hand, I am anxious that we move expeditiously and that 
we come to common ground on this matter.
  How do we legislate here in Congress? Too often, people see us 
arguing and disagreeing, but in truth we know that we come to a 
conclusion by reaching out to each other and finding out what we can 
agree on; Democrats and Republicans, what can we agree on; House and 
Senate, what can we agree on; and Congress and the White House, what 
can we agree on; because it takes all of those parties to make a law. 
And because the Y2K issue is coming at us, it is important that we go 
through this extended process of finding common ground more quickly 
than is ordinarily the case.
  If I can just briefly relate a conversation I had with Scott Cook, 
the founder of Intuit, in San Jose just on Friday. As my colleagues 
know, he thanked me for my efforts on behalf of Y2K and also pointed 
out we cannot wait until the year 2003 to get a bill; we need it this 
spring.
  That is why we have offered up this substitute. I believe that it 
offers those things that we can agree upon, Democrats and Republicans, 
House and Senate, White House and Congress, and that it offers up 
elements that will provide the essential life raft for high tech in our 
economy.
  Specifically Title I allows for a cooling-off period and incentives 
to settle for alternative dispute mechanisms just as does the 
underlying bill. It also requires for a specific and particular 
pleading, which is an important issue, and requires the duty to 
mitigate damages. It also includes, requires, that material defects 
must be the basis for lawsuits, not immaterial material defects, but 
material defects, and finally does provide for an alteration of joint 
and several liability so that those defendants who have minimal 
liability cannot be held totally responsible for the cost unless their 
conduct constituted fraud.
  I must say that although this bill, this amendment, may not be 
perfect, it will get the job done, and it is something that we can 
agree on.
  The Justice Department in defining the underlying Davis bill said 
this: by far the most sweeping litigation reform measure ever 
considered. The bill makes, and I quote again, extraordinarily dramatic 
changes in both Federal procedure, in substantive law and in State 
procedural and substantive laws. The class-action removal is just one 
situation that we have already discussed in the last amendment. We 
cannot come to an agreement on that, and as the gentleman from Virginia 
(Mr. Goodlatte) said in closing under the hour of general debate, much 
of what is in the underlying Davis bill was in the Contract with 
America. Reasonable people can and do disagree on many of those 
provisions, and that argument can be had another day.
  What I am saying is we cannot and we should not tie up this essential 
Y2K matter over those things that we cannot agree on, so I highly 
recommend this.
  Mr. CONYERS. Mr. Chairman, I reserve the balance of my time.
  Mr. BRYANT. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, the Conyers amendment would neither encourage Y2K 
remediation nor discourage frivolous litigation. This substitute 
recognizes the seriousness of the Y2K litigation problem and, as well, 
the necessity of a legislative response. But the amendment waters down 
key provisions of H.R. 775 in a way that would make the bill markedly 
less effective in screening out insubstantial litigation and 
encouraging remediation. This amendment should be rejected.
  Among its most serious defects are, one, the amendment would allow 
vague and unsupported allegations of fraud to survive a motion to 
dismiss. Two, the amendment does not impose a meaningful duty to 
mitigate damages and, therefore, does not encourage remediation. Three, 
the amendment does not impose meaningful limits on joint and several 
liability and thus does nothing to prevent strike suits against 
defendants with deep pockets. Four, the substitute does nothing to 
advance reasonable efforts to remediate Y2K problems. Five, the 
substitute does not limit punitive damages and, therefore, does nothing 
to discourage abusive suits by lawyers who seek to win litigation 
jackpots. And finally, six, the substitute would keep national class 
actions involving out-of-state defendants in State courts.
  Mr. Chairman, I reserve the balance of my time.
  Mr. CONYERS. Mr. Chairman, I yield 5 minutes to the gentleman from 
Virginia (Mr. Boucher), who has worked very diligently on this 
alternative substitute.
  Mr. BOUCHER. Mr. Chairman, I thank the gentleman from Michigan (Mr. 
Conyers) for yielding me this time.
  It is my pleasure to rise in support of the amendment in the nature 
of a substitute offered by the gentleman from Michigan and the 
gentlewoman from California with whom I am pleased to be co-authoring 
this measure. I also urge opposition to the overly broad provisions of 
H.R. 775 as reported from the House Committee on the Judiciary.
  Mr. Chairman, our substitute addresses in a straightforward and in a 
targeted fashion the genuine concerns that arise from the Y2K 
transition. The substitute provides for a cooling-off period. Before a 
suit is filed, plaintiffs would be required to give notice to potential 
defendants of a claim. Defendants would then have 30 days to respond to 
that notice and to provide a plan for how they would intend to repair 
the problem. They would then

[[Page 9369]]

have an additional 60 days within which to affect those repairs.
  The substitute encourages alternative dispute resolution so as to 
avoid expensive litigation. The 90-day cooling-off period can be 
extended while any alternative dispute resolution process is in 
progress.
  The substitute requires that, if suit is filed, the plaintiff must 
state with particularity the problem he is having and the reason that 
the defendant or the defendants are responsible for that harm. This 
pleading requirement is designed to overcome the notice pleading rules 
that are currently in effect in some State courts.
  The substitute prohibits frivolous class-action suits. To sustain a 
Y2K class-action suit, the plaintiff would have to meet all of the 
normal class-action certification rules and, in addition, demonstrate 
that there is a material defect in the product or the service with 
respect to every member of the class. Every member of the class would 
have to show that he is affected by a material defect. This minimum 
injury requirement would go a very long way indeed toward avoiding and 
precluding frivolous or insubstantial class-action suits.
  The substitute imposes a clear duty on plaintiffs to mitigate 
damages. It codifies the economic loss doctrine now applied in many 
States for cases that involve a combination of contract and tort causes 
of action. Under that doctrine, damages are limited to those allowable 
under the contract claim unless there is also a personal injury or 
property damage shown. Economic losses, such as lost profits or 
business interruption, will not be permitted unless explicitly provided 
for in the contract itself. The tort cause of action will simply not 
extend to these elements of loss in the normal case.

                              {time}  1445

  Very importantly, the substitute gives the court the ability to 
protect defendants who have a small proportionate share of the overall 
liability. The substitute says that the court can apply equitable 
principles and make sure that defendants who have a very small part of 
the responsibility for causing harm will have only a very small 
liability, and their liability will be directly proportional to the 
harm that they cause. We do have in this substitute an important 
proportional liability provision.
  The substitute truly meets the needs of the companies that will have 
Y2K liabilities. It is carefully targeted to meet the problem that has 
been presented. Our substitute does not contain the broader litigation 
restrictions that are a part of H.R. 775.
  Unlike H.R. 775, our substitute does not place a cap on damage 
awards. Unlike H.R. 775, our substitute does not introduce into 
American law a loser pays principle. Unlike H.R. 775, our substitute 
does not create a more rigorous standard of proof for plaintiffs to 
receive damages, and unlike H.R. 775, our substitute does not reduce 
the liability of corporate officials.
  These overly broad provisions of H.R. 775 are not necessary to 
address the genuine concerns that are presented in the Y2K transition. 
A measure that contains these overly broad provisions will not be 
signed into law. Our substitute would be signed into law if passed.
  Given the severely limited time that Congress has to put a Y2K 
transition measure into place before the start of the year, given the 
fact that H.R. 775 cannot become law, given that our substitute meets 
the real needs of the Y2K concern that has been presented and can in 
fact become law, I strongly urge the passage of our substitute and the 
defeat of the underlying bill unless it is amended with this 
substitute.
  Mr. BRYANT. Mr. Chairman, I yield myself 30 seconds to respond 
briefly to the Conyers amendment containing joint and several liability 
relief.
  Mr. Chairman, I might point out to my colleagues that this relief 
only applies in circumstances where the judge does not change it. The 
judge has the opportunity under this substitute amendment to come in 
and do away with the joint and several liability or not do away with 
the joint and several liability, which actually causes more confusion 
than the existing law. So, again, I would urge my colleagues to vote 
against this amendment.
  Mr. Chairman, I yield 4 minutes to my friend, the gentleman from 
Virginia (Mr. Davis).
  Mr. DAVIS of Virginia. Mr. Chairman, when I hear them saying let us 
come to common ground, it means give us our way. There is nothing 
common about it.
  I had hoped that by the time we had passed this in the Senate we 
could all sit down and work with the administration, who until 2 days 
ago was saying publicly there was no problem. John Koskinen, the 
administration's guru on Y2K, said we do not need any legislation, and 
just in the last 24 hours they have come forward and admitted, yes, 
there is a problem and they are trying to find a political fig leaf to 
cover it. This substitute, the Conyers amendment, does not do the job.
  Joint and several liability is an important concept. Companies like 
Intel, NetScape, Oracle, companies in the Silicon Valley, this 
legislation, I might add, is supported by the semiconductor industry, 
the Software Information Industry Association, Business Software 
Alliance, the Technology Network, TechNet, the Semiconductor Equipment 
and Materials Information, Information Technology Association of 
America. They want real legislation, not a fig leaf that does not do 
the job, that is feel good.
  What has happened in this case is the larger companies, the Intels, 
the Oracles, if they touch the problem, if they make it better than it 
is now, they can still be held liable for the full amount in a class 
action suit with joint and several liability, because they are held as 
a defendant.
  Proportional liability, I think, is a much better range. If someone 
touches a problem and makes it better, they should not be held liable 
for the full amount just because they happen to be the deep pockets, 
just because they happen to have the cash on hand.
  To take the money from these companies that they should be investing 
in new products so that they compete on a global marketplace, and 
instead put it into litigation, into settlement, into attorneys fees, 
really undermines where we have gone as a country in this new economy 
and where we are in the global marketplace.
  This guts the bill altogether, this amendment.
  They talk about this being a part of the Contract with America. 
Actually, this is a laser shot that goes after a problem that exists 
once every 1,000 years. The Y2K problem is unique because of the 
interconnectibility of computer systems, and the fact that someone can 
have their whole system, they can flush it, they can test it, it can be 
100 percent clean and then some other group gets into it and talks to 
it that is not Y2K compliant, that they never could have conceived of 
could have used it, comes in and messes it up, and yet the group that 
is actually innocent can be held liable for the total amount. That is 
what this amendment is, it holds companies who are trying to improve 
it.
  In addition to that, this makes companies reluctant to fix the 
problem because if they fix the problem, if they come in and help a 
computer system and it is still not 100 percent functional, if they 
happen to be the deep pocket and they are a defendant, under joint and 
several liability they can be liable for the whole thing.
  What that means is the problem is not getting fixed or if they are 
getting fixed the larger companies are going to the smaller companies 
and having them write off indemnities and the like that just do not 
make any sense in the ordinary marketplace.
  Make no mistake about what this amendment does. It guts the bill and 
it is a political fig leaf.
  They talk too about the amendment does not impose a meaningful duty 
to mitigate damages. This amendment does not. This amendment provides 
that a plaintiff cannot obtain damages that it could have reasonably 
avoided in light of information that it received from the defendant. 
Unlike the bill, the substitute does not create a mitigation

[[Page 9370]]

requirement if the plaintiff becomes or should have become aware of the 
information from other sources.
  That is a loophole one can drive a mack truck through. It does 
nothing in terms of mitigation in this case, unless there is a formal 
notification, which so often is many months later, even though they can 
go publicly and acknowledge these things over television, the media and 
other areas.
  If someone could easily avoid damage by taking a simple step which he 
or she should be aware, it is perverse to allow that person to avoid 
taking those steps and to suffer damage and then to sue a third party 
for compensation when they should have known, and probably knew, 
because they were not officially notified.
  This is a bad substitute.
  Mr. CONYERS. Mr. Chairman, I yield myself 30 seconds.
  Mr. Chairman, the gentleman from Virginia (Mr. Davis) will be 
delighted now to find out how much the Lofgren-Conyers-Boucher 
substitute leaves in from the original bill. One, we encourage 
mediation with a 90-day cooling off period. That is in the bill.
  We help eliminate frivolous lawsuits by special pleading requirements 
in mitigation of damages. That is in the bill.
  We increase legal certainty for Y2K defendants, contracts fully 
enforceable, preserving defensive impossibility and commercial 
impracticability.
  So relax. This is good material from the bill.
  Mr. Chairman, I yield 3 minutes to the gentleman from Massachusetts 
(Mr. Frank).
  Mr. FRANK of Massachusetts. Mr. Chairman, I thank the ranking member, 
the gentleman from Michigan (Mr. Conyers), for yielding me this time.
  Mr. Chairman, I know some people think that debate is not often 
instructive but I just learned from the gentleman from Virginia (Mr. 
Davis) that the companies that will be the beneficiaries of this bill 
support it. That is something people might not have taken for granted.
  Beyond that, however, I want to pay tribute to the great work of the 
gentleman from Virginia, the gentlewoman from California and the 
chairman, or the ranking member but chairman to be. The gentleman from 
Virginia and the gentlewoman from California have, in particular, 
distinguished themselves by thoughtful advocacy of the legitimate 
concerns of the high technology community. They have the vehicle that 
is the only one that can become law.
  The administration has changed its position. It has been in part 
because of the work of these individuals who have said to them that 
they are wrong to just stonewall; let us work out a reasonable 
position.
  Now, there is one other thing I do want to notice. I know there are 
Members who talk about how government always gets it wrong and the 
private sector always gets it right. One of our leaders of the House 
says government is dumb and the markets are smart. I think the markets 
obviously are wonderful in their work, but I do have to note that in 
this case it was not the government that forgot that 1999 would become 
2000. That was the private sector. We all make mistakes.
  The private sector is now coming to that stupid government and saying 
can we get a little help? I think we should. I think that is an 
appropriate role for government but we ought to understand what has 
happened here.
  What this amendment does is to deal sensibly and try to find a 
compromise. I do not agree with everything. I am against unlimited 
punitive damages. I voted against the amendment of my friend, the 
gentleman from Virginia (Mr. Scott). I hope if we get to conference we 
will put back a cap on punitive damages, but on the whole this bill 
takes a sensitive and thoughtful approach.
  I voted for the legislation passed over the President's veto, and I 
voted to override his veto limiting suits based on stocks. In this 
case, the companies that the gentleman from Virginia (Mr. Davis) 
enumerated need to be saved from themselves because if they insist on 
getting every single thing on their wish list, if they get everything 
that could mean they would almost never be sued under any 
circumstances, there will be no bill.
  Yes, I think there are things about the American legal system that 
ought to be changed but it is fair to note that these companies we are 
talking about that are so afraid of this legal system grew in this 
legal system. If it was so terrible, if it was so obstructive, how did 
they get where they are? Did they all parachute in here from Mars?
  The fact is that this same legal system allowed them to grow and what 
we now have is a sensible, thoughtful, specific compromise, worked out 
by people who have a great deal of understanding and knowledge of this 
industry and they are trying to get a bill.
  We have a choice now. Some Members think a political issue would 
serve them better. Some Members think that legislation that gets signed 
into law would do a better job for the country, and I think that the 
substitute that is pending reflects that latter view.
  I urge Members to vote for this substitute and set the basis for a 
sensible bill.
  Mr. BRYANT. Mr. Chairman, I yield 3 minutes to the gentlewoman from 
Maryland (Mrs. Morella).
  Mrs. MORELLA. Mr. Chairman, I thank the gentleman from Tennessee (Mr. 
Bryant) for yielding me this time.
  Mr. Chairman, I rise today in support of H.R. 775, the Y2K Readiness 
and Responsibility Act, and against the amendment that has been 
offered.
  As the cochair of the House Y2K working group made up of my 
Subcommittee on Technology of the Committee on Science, the 
Subcommittee on Government Management, Information and Technology of 
the Committee on Government Reform, chaired by the gentleman from 
California (Mr. Horn), we have been reviewing for over the past 3 years 
virtually every facet of the impact of the year 2000 computer problem 
on our public and private sectors.
  In fact, one of our first joint hearings which was held in March of 
1997 was held really to deal with the consequences of legal liability 
in litigation, upon the ability of private industries to fix the 
problem. At that hearing and at others, we discovered that the fear of 
potential legal liability created a disturbing chilling effect that 
froze private industry from sharing important Y2K information with each 
other and with the American public.
  Mention was also made of the concept of the total corrective cost. It 
was estimated ranging from the J. P. Morgan figure of $200 billion to 
the Gartner Group forecast of $300 billion to $600 billion. The Giga 
Group estimates that the total cost could amount to several trillion 
dollars if there are Y2K disruptions.
  So it should come as no surprise to us that certain industries have 
refused to acknowledge or to share year 2000 information for fear that 
such disclosure could ultimately leave them vulnerable to negligence 
and warranty suits.
  That is why, remember last year we did pass the Year 2000 Information 
Readiness Disclosure Act as an attempt to encourage the widest possible 
dissemination of Y2K information by providing limited immunity from 
lawsuits to companies that share information about the problem in good 
faith.
  Now that was great, but now we need to move further. That act was 
narrowly tailored to address just the issue of information exchange. It 
did not affect the greater liability questions. So I believe we must do 
more, and that is what H.R. 775 does.
  It is a positive step, without exempting businesses from their 
responsibility to correct the year 2000 problem. It provides a 
framework for helping to resolve claims from damages that may result 
because of Y2K failures.
  Additionally, it provides some protection for those who have made 
good faith efforts to address the problem. It encourages alternative 
dispute resolutions and settlement negotiations, instead of costly and 
protracted judicial litigation.
  Mr. Chairman, just this past March, the Y2K working group held a 
first House hearing in this Congress on the liability issue. I have 
cited in my testimony, which will be presented for the record, 
statements made by, for example, Mr. Walter Andrews and Mr. Tom 
Donohue.

[[Page 9371]]

  I just want to also state that the High Technology Council of 
Maryland has strongly supported this bill and urge that all the Members 
of the House vote for it.
  Mr. Walter Andrews of the law firm Wiley, Rein and Fielding stated 
that:

       In addition to the current litigation against software 
     developers and other developers of information technology, we 
     can expect eventually to see suits brought against suppliers, 
     vendors and service businesses at every level of the chain of 
     distribution. And the legal claims that eventually may be 
     pursued under the rubric of the Year 2000 problem span the 
     range from contract and tort law to statutory claims.

  Mr. Tom Donohue, the President and Chief Executive Officer of the 
United States Chamber of Commerce, testified that:

       Unlike other national emergencies that hit without any 
     warning, we now have an opportunity to directly address the 
     Y2K problem before it hits. The business community is willing 
     to do its part in fixing the Y2K problem, and to compensate 
     those who have suffered legitimate harms . . . (we must work) 
     to ensure that our precious resources are not squandered and 
     that our focus will be on avoiding disruptions.

                                                   High Technology


                                          Council of Maryland,

                                      Rockville, MD, May 12, 1999.
     Members of the House of Representatives,
     U.S. Congress,
     Washington DC.
       On behalf of the High Technology Council of Maryland, I 
     urge you to support the legislation that provides some 
     protections from liability for companies that have made good 
     faith efforts to address the Y2K problem.
       We think this legislation will be very beneficial to 
     companies as it addresses in a positive way some of the legal 
     problems that may result from the Y2K problem. Y2K is a 
     unique situation that was only brought to light for most 
     businesses and individuals in the last few years.
       The legislation does provide a framework for helping to 
     resolve claims from damages that may result because the Y2K 
     issue caused products to fail. It also provides some 
     protection for those who have made ``good faith'' efforts to 
     address the problem and encourages dispute resolution to 
     resolve the problems, instead of expensive litigation.
       It is important to remember that this legislation does not 
     exempt businesses from their responsibility. It gives 
     companies guidelines for what they should be doing and 
     recognizes the good efforts of the many businesses who are 
     trying to solve a problem not of their making.
       We urge you to support legislation that will help companies 
     do their best to be in compliance for Y2K.
           Sincerely,
                                                  Dyan Brasington,
                                                        President.

                              {time}  1500

  Mr. CONYERS. Mr. Chairman, I yield 1\1/2\ minutes to the gentleman 
from Massachusetts (Mr. Delahunt). No one has worked harder in our 
Committee on the Judiciary than the gentleman.
  Mr. DELAHUNT. Mr. Chairman, I thank the ranking member for yielding 
time to me.
  Mr. Chairman, I just want to set the record straight. I think that my 
friend and colleague, the gentleman from Virginia (Mr. Davis) 
unintentionally misstated the position of the administration in this 
regard, because back on April 13, which is certainly not several days 
ago, in her testimony before the Committee on the Judiciary Assistant 
Attorney General for Policy Development, Eleanor Acheson, was very, 
very clear. Let me read from her statement.
  ``We are committed to working with the committee to formulate 
mutually agreeable principles that would form the basis for a needed, 
targeted, responsible, and balanced approach to Y2K litigation 
reform.''
  So this is not a fig leaf. In fact, it was this testimony that 
prompted the gentlewoman from California (Ms. Lofgren) and the 
gentleman from Virginia (Mr. Boucher) and the gentleman from Michigan 
(Mr. Conyers) to come in with this substitute which I would submit is 
balanced and reasonable, and answers the problem without denying due 
process to small businesses and many, many Americans.
  Mr. BRYANT. Mr. Chairman, I yield 15 seconds to the gentleman from 
Virginia (Mr. Davis).
  Mr. DAVIS of Virginia. Mr. Chairman, I thank my friend for yielding 
time to me.
  Mr. Chairman, I guess the administration has been at odds with 
itself, because just up to a month ago Mr. Koskinen, who is their Y2K 
guru, was saying there was no need for the legislation. So we have the 
Justice Department saying one thing, the Y2K guru at OMB saying 
something else.
  But we are just happy to have them engaged in this. We look forward 
to working with them at the conference.
  Mr. BRYANT. Mr. Chairman, I am pleased to yield 3 minutes to the 
gentleman from Virginia (Mr. Moran), one of the original cosponsors of 
this bill.
  Mr. MORAN of Virginia. Mr. Chairman, I thank the distinguished 
chairman, the gentleman from Tennessee (Mr. Bryant) for yielding time 
to me.
  Mr. Chairman, I rise in opposition to this amendment and in support 
of the underlying bill. I know that this is a well-intended effort to 
come up with a compromise solution that will get the White House on 
board, but it needs to be stated explicitly and definitively on this 
floor that none of the organizations that need this help endorse this 
amendment.
  There are over 300 organizations that are directly affected by the 
Y2K problem that understand the liability involved that support the 
underlying bill. That includes the National League of Cities, which is 
hardly a foil for the Republican Party. They discussed it at length, 
mayors and county board members. They concluded that this bill, the 
underlying bill, not the alternative amendment, is what they need.
  Mr. Chairman, how important is this? It has been estimated that $2 to 
$3 will be spent in litigation for every $1 that will be spent on 
fixing the problem. But it is actually more serious than that. The 
Federal Government, according to the Federal Reserve, will spend about 
$30 billion fixing its Y2K computer problem. The private sector, 
private industry, will spend about $50 billion. But it is also 
estimated that nearly $1 trillion will be spent in litigating the 
problem.
  What kind of an allocation of resources is that? That is insane. In 
fact, and I want every Member in this body to listen to this, a panel 
of experts that studied the Y2K problem of the American Bar Association 
came up with the conclusion that there could be more litigation 
involved in Y2K than asbestos, breast cancer implants, tobacco, and 
Superfund liability combined. This could be the greatest liability 
expense this Nation will have experienced. Imagine, asbestos, breast 
cancer implants, tobacco, and Superfund liability combined may equal 
the amount of litigation involved in Y2K.
  The problem is, there are no really bad actors here. Nobody 
deliberately wants to keep their computer programmed in a way that is 
not useful for the 21st century. That would be nuts. Everybody is 
trying to fix this. The problem is that some people have seen a 
disincentive to fix it because of the potential liability.
  The underlying bill fixes the problem. I do not think the alternative 
amendment does. I will vote against the alternative amendment and for 
the underlying bill.
  Mr. CONYERS. Mr. Chairman, I yield myself 3 minutes.
  Mr. Chairman, this from the San Jose Mercury News:

       Y2K bills are buggy themselves . . . the legislation is 
     still evolving, but the trend so far is that Congress is 
     slighting consumers of hardware and software in its desire to 
     protect the high-tech industry.

  The New York Times:

        . . . the legislation is misguided and potentially unfair. 
     It could even lessen the incentive for corrective action . . 
     . the government should not use the Millenium bug to overturn 
     longstanding liability practices. A potential crisis is no 
     time to abrogate legal rights.

  The Washington Post:

       The fear of significant liability is a powerful incentive 
     for companies to make sure that their products are Y2K 
     compliant and that they can meet the terms of the contracts 
     that they have entered.

  So this substitute, Mr. Chairman, seeks to repair the tremendously 
one-sided advantages that are granted in Y2K. I believe that many 
responsible computer organizations will have no problem whatsoever 
working with the Lofgren-Conyers-Boucher substitute.
  In addition, this substitute increases legal certainty for the 
defendants in Y2K by specifying that their contracts

[[Page 9372]]

shall be fully enforceable, by preserving their ability to assert the 
defense of impossibility or commercial impracticability.
  The substitute also helps to ensure that defendants who are 
responsible for only a small portion of their damages are not held 
responsible for damages caused by other tort feasors.
  So here we have it. Do we really want to go down in flames by 
resisting a well-crafted substitute and risk a veto, or do we want to 
accept something that has many of the elements of the original bill, 
the underlying bill in it?
  I think the smarter, wiser, more correct legislative course is to 
follow the substitute, and let us all work together and get this 
through the Senate and signed by the President into law.
  Mr. Chairman, I reserve the balance of my time.
  Mr. BRYANT. Mr. Chairman, I am pleased to yield 2 minutes to my 
colleague, the gentleman from Missouri (Mr. Talent).
  Mr. TALENT. Mr. Chairman, I thank the gentleman for yielding time to 
me.
  Mr. Chairman, I want to speak in support of the underlying bill and 
against the substitute. I certainly hope we can work something out. I 
am glad that there is some consensus that we need to do something.
  Here is my concern. A small business has done everything it can to 
become Y2K compliant. It has gotten ready. It is Y2K compliant, but one 
of its suppliers is not. That may not even be a domestic supplier, it 
could be a foreign supplier.
  So as a result, that small business is not able to deliver on time to 
maybe a big business, so the big business sues. It just seems to me the 
underlying bill, which has some commonsense things in it, says, look, 
you cannot recover punitive damages that are greater than three times 
your actual damages. There should be some relationship between the 
damage award you get and the actual damages you suffer. That seems to 
me to make sense.
  I also very much like the provisions in the underlying bill that are 
designed to discourage fraudulent or nuisance actions, strike actions. 
When you file a lawsuit and you really know you cannot win if you go to 
trial, but you know that small business does not want to spend $40,000 
or $50,000 or $60,000 or $70,000 defending itself, so you file the 
thing. You have this big punitive damages award hanging over the small 
business. You go and say, well, for $20,000 or $25,000, we will dismiss 
the lawsuit. That is what we call a strike action, a nuisance action.
  The underlying bill has a safeguard. It says, if you think there is 
fraud, state the basis for believing there is fraud in your lawsuit. 
What is wrong with that? One of my concerns about the substitute is 
that it does not have that in there. You should not be able to file a 
lawsuit alleging fraud without having a basis for it, and then go on a 
fishing expedition trying to find it that is costly for the small 
business defending the action.
  I like the underlying bill. I think it is better than the substitute. 
I urge the House to oppose the substitute. I hope we can work something 
out and get a consensus measure. Certainly the bill has bipartisan 
support. I would like something the President could sign.
  Y2K is a difficult enough problem for the small business community 
without having to be concerned about nuisance actions, so I would urge 
the House to oppose the substitute and support the underlying bill.
  Mr. CONYERS. Mr. Chairman, I yield 3 minutes to the gentlewoman from 
Colorado (Ms. DeGette).
  Ms. DeGETTE. Mr. Chairman, I thank the gentleman for yielding time to 
me.
  Mr. Chairman, I believe, with many of my colleagues, that frivolous 
litigation is already a real concern to the business community and 
needs to be addressed by Congress.
  But the legislation, the underlying bill that is before us, would 
make dramatic changes in Federal, procedural, and substantive law at 
both the Federal and State levels. This example just given by the 
previous speaker is the perfect example. There is no other kind of 
lawsuit where you have to plead fraud in the way that the underlying 
bill contemplates. Why should we do it just for one class of lawsuits?
  We need to make sure that year 2000 liability legislation we pass 
does not undercut incentives that will encourage companies to fix year 
2000 problems. The amendment that we have before us would encourage 
entities to fix year 2000 problems now, and would also provide a method 
for weeding out any future frivolous lawsuits, while providing an 
outlet for legitimate claims.
  I also think that it would be foolish to establish an unwarranted 
precedent to limit damage awards in product liability cases, yet 
another example of how we are changing jurisprudence. I think it is 
important to discourage frivolous lawsuits that may come as a result of 
the year 2000 glitch, but this body should not pass overbroad 
legislation that will hurt both businesses and consumers who have 
legitimate claims.
  One of the most important provisions in the substitute specifies that 
those defendants determined to be only minimally liable for the year 
2000 consumer problem will be held to be only proportionally liable by 
the court. This is a far more palatable alternative to completely 
eliminating joint and several liability altogether, which is what the 
underlying bill does.
  The substitute provides that the court will have discretion to 
determine whether a defendant that is minimally liable will be held 
jointly and severally liable. There is little disagreement about 
encouraging resolution of year 2000 problems without resorting to 
litigation. The amendment strikes the needed balance, and it can pass 
and it can be signed into law.
  The year 2000 is just a little over 6 months away. Congress needs to 
act now to pass a law everybody can agree with, instead of dithering 
around for the next 6 months trying to figure out how we are going to 
expedite resolution of the year 2000 glitch, and expedite this 
resolution for the business community and the consumer as well.
  Mr. GOODLATTE. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, I rise in strong opposition to the Conyers substitute. 
I commend the gentleman from Michigan, the gentlewoman from California, 
and the gentleman from Virginia for their efforts to work in this area, 
but this amendment, this substitute, simply does not address the 
problems that are addressed in the bill offered by the gentleman from 
Virginia (Mr. Davis), and as a result, I must support the bill.
  Let me point out what those differences are. First, the amendment 
would allow vague and unsupported allegations of fraud to survive a 
motion to dismiss.
  Like H.R. 775, the Conyers amendment recognizes that heightened 
pleadings standards are necessary to screen out frivolous suits at the 
motion to dismiss stage before defendants and plaintiffs run up huge 
litigation costs.
  Unlike H.R. 775, however, the substitute would not require plaintiffs 
to plead with particularity the facts supporting allegations of fraud. 
This is a major omission. Prior to the enactment of the Private 
Securities Litigation Reform Act in 1995, abusive fraud suits were a 
major problem.
  Similar suits inevitably will be brought in the Y2K area, yet it is 
fundamentally unfair for a plaintiff to accuse a defendant of acting 
with a fraudulent state of mind unless the plaintiff is able to 
articulate some factual basis for that allegation.
  The substitute does not impose a meaningful duty to mitigate damages, 
and therefore does not encourage remediation. The Conyers amendment 
provides that a plaintiff may not obtain damages that it could 
reasonably have avoided in light of information that it received from 
the defendant, but unlike H.R. 775, the substitute does not create a 
mitigation requirement if the plaintiff becomes or should have become 
aware of the information from other sources.
  Surely, however, if someone could easily avoid damage by taking 
simple steps of which he or she is or should be aware, it is perverse 
to allow that person to avoid taking those steps to suffer the damage 
and then sue a third party for compensation.

[[Page 9373]]



                              {time}  1515

  The amendment does not impose meaningful limits on joint and several 
liability and thus does nothing to prevent strike suits against 
defendants with deep pockets.
  Proportionate liability is an essential response to the threat of 
abusive litigation. Without proportionate liability, plaintiff's 
lawyers always will name a deep-pocketed defendant in their suits so 
long as there is any chance that the people who are really responsible 
for the injury are judgment-proof.
  The lawyers will know that the deep pocket will have to pay the 
entire judgment so long as a jury can be persuaded to find it even 1 
percent responsible. As was true in the securities context prior to 
enactment of the PSLRA, that kind of scheme simply encourages strike 
suit litigation by giving lawyers the leverage to bring abusive suits 
that the defendant will have no choice but to settle.
  The Conyers amendment, however, does not impose a real limit on joint 
and several liability. It makes joint and several liability the rule 
unless a judge exercises his or her discretion to order otherwise. This 
scheme offers no protection in State courts with plaintiff-friendly 
judges. Because the outcome in every case will be uncertain, defendants 
who will not know until after trial whether they face joint and several 
liability will have to pay coercive settlements even when they did 
nothing wrong.
  Indeed, the amendment would make the law considerably worse than it 
is now by preempting the many State laws that depart from pure joint 
and several liability.
  Also, this substitute does nothing to advance reasonable efforts to 
remediate Y2K problems. It does not limit punitive damages and, 
therefore, does nothing to discourage abusive suits by lawyers who seek 
to win the litigation jackpot.
  The substitute would keep national class actions involving out-of-
State defendants in State court, an abuse that we have attempted to 
correct in this legislation and is one of the main reasons why I cannot 
join in supporting this substitute.
  I urge my colleagues to oppose it and to support H.R. 775.
  Mr. Chairman, I reserve the balance of my time.
  Mr. CONYERS. Mr. Chairman, how much time remains on each side, sir?
  The CHAIRMAN. The gentleman from Michigan (Mr. Conyers) has 11 
minutes remaining, and the gentleman from Virginia (Mr. Goodlatte) has 
11\3/4\ minutes remaining.
  Mr. CONYERS. Mr. Chairman, I yield myself 30 seconds.
  This question of fraud has to be looked at a lot more carefully than 
the gentleman from Virginia (Mr. Goodlatte) has put forward. The 
pleadings around fraud have been established over generations of 
litigation in the American court system.
  The requirement for particularity that he finds missing in our bill 
is missing because that is the state of the law. But we added 
materiality. The base bill talks about fraud.
  Mr. Chairman, I yield 3 minutes to the gentlewoman from Texas (Ms. 
Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I thank the gentleman from 
Michigan for yielding me this time.
  Mr. Chairman, I would like to pick up where the gentleman from 
Michigan (Mr. Conyers) was raising several points, and I appreciate the 
points he was making on this.
  I rise in strong support for the Conyers-Boucher-Lofgren substitute. 
I have spoken to the gentleman from Virginia (Mr. Goodlatte) on the 
floor and thanked him for his leadership on this issue, and I think the 
temperament or the tone of the debate suggests that it is not 
acrimonious debate. I think we all agree that we have a problem that we 
should face collectively in dealing with Y2K.
  I think the key element is preparedness. But as I heard the gentleman 
from Virginia (Mr. Goodlatte) refuting the amendment, he was refuting 
it by suggesting the things that were not in it or the things that the 
amendment was reestablishing, the joint and several liability, the lack 
of a cap on punitive damages.
  But what he was saying is that the state of the law in America now is 
not good enough. That is the concern we have with the underlying bill 
and why I am supporting the Y2K substitute or this legislation that is 
being offered.
  The substitute was put together in cooperation with the high-tech 
industry and without the assistance of another theme, which is tort 
reform, which I think we can all debate and have our opinions. We can 
agree and disagree. But this is not legislation that is dealing with 
tort reform.
  It is an isolated, portended problem that will come up, or we believe 
will come up, with the Y2K pending crisis. We realize that we must 
address it, but the concern we have in dealing with this legislation, 
the Y2K problem, is that we need to have solutions, as the gentleman 
from Michigan (Mr. Conyers) has said, that can bring about bipartisan 
support and frankly will, if you will, withstand a veto. Why not accept 
the substitute which clearly responds to some of the concerns we have?
  The underlying legislation, for example, for instance, it keeps the 
enhanced pleading requirements, but it jettisons the reasonable efforts 
defense. That defense basically gives carte blanche protection to any 
Y2K solution provider who provides only the bare minimum of assistance 
to their clients.
  This is unprecedented in American law. This is what the underlying 
bill does, which provides ample statutory and common law defenses in 
legal relationships.
  Mr. Howard Nations, a well-respected scholar from my hometown of 
Houston, when he was testifying before both the Committee on Science 
and the House Committee on the Judiciary, repeatedly pointed out that 
the Uniform Commercial Code and State-developed common law were more 
than adequate to handle the problem of the Year 2000 transition.
  I am concerned at the negative stereotypes of State court systems. I 
believe many lawyers practice in those courts, defendants' and 
plaintiffs' lawyers, and find a fair and balanced judicial system.
  Those legal sources include a wide assortment of defenses available 
to named defendants, like the business judgment rule, the statute of 
limitations and the obligation of plaintiff to mitigate damages.
  This substitute saves the cooling-off provisions but reforms the 
provisions on joint and several liability.
  Mr. Chairman, I would simply say that there are so many features in 
this underlying bill that the amendment that is now being offered is a 
fair response to the capping of punitive damages, and it is a fair 
response to bipartisanship.
  I hope, Mr. Chairman, that we can vote on this amendment in a 
bipartisan manner and get a bill that can pass and that will serve the 
American people.
  Mr. Chairman. I rise in strong support of this substitute, which is 
the product of a great deal of hard work by Congressmen Conyers and 
Boucher, and Congresswoman Lofgren, who represents the high-tech 
community in California.
  This substitute was put together in cooperation with the high-tech 
industry, and without the ``assistance'' of the powerful tort-reform 
lobby. As a result, it is a substitute that is narrowly tailored to do 
the job it is needed to do--help people and businesses solve their Y2K 
problems with minimal discomfort.
  It is a substitute that focuses H.R. 775 on the Y2K problem and its 
solutions, and stays away from controversial changes that may change 
the face of our legal system forever. For instance, it keeps the 
enhanced pleading requirements, but jettisons the ``reasonable 
efforts'' defense. That defense basically gives carte blanche 
protection to any Y2K solution provider who provides only the bare 
minimum of assistance to their clients. This is unprecedented in 
American law, which provides ample statutory and common law defenses in 
legal relationships. Mr. Howard Nations, a well-respected legal scholar 
from my home town of Houston, when testifying before both the House 
Science and Judiciary Committees repeatedly pointed out that the 
Uniform Commercial Code (UCC) and state-developed common law were more 
than adequate to

[[Page 9374]]

handle the problem of the Year 2000 transition. Those legal sources 
include a wide assortment of defenses available to named defendants, 
like the ``business judgment rule'', the statute of limitations, and 
the obligation of the plaintiff to mitigate damages.
  This substitute saves the ``cooling off period'', but reforms the 
provisions on joint and several liability. Joint and several liability 
was developed by courts and legislatures over our history to take the 
burden of innocent plaintiffs who have been wronged by many defendants. 
It allows them to receive satisfaction without having to track down 
every defendant that may have wronged them. The unamended version of 
this bill basically eliminates this well-established principle, and 
puts the onerous burden of plaintiffs to seek justice, perhaps all over 
the globe. This substitute vastly improves the provisions on joint and 
several liability by allowing only those defendants who have had 
minimal involvement with the facts in question to escape complete 
liability.
  This substitute eliminates much of the tort-reform clutter that 
pervades this bill. It eliminates the caps on punitive damages, which 
it sets at $250,000. It strikes the provisions that federalize state 
class action laws. But at the same time, this substitute brings relief 
to consumers who might otherwise be caught under the auspices of this 
onerous legislation. It also keeps the provisions that will allow 
courts to discriminate against frivolous lawsuits.
  Furthermore, because of the impending veto threat, I urge each of you 
to give the House a chance to pass a bill that can actually be signed 
into law by voting for this Democratic Substitute. This substitute 
shows that we can address this difficult and complex Y2K problem 
without upsetting the delicate balance that has been slowly developed 
and nurtured by our system. We can do right by the American people--
vote ``aye'' on the Conyers/Lofgren/Boucher substitute.
  Mr. GOODLATTE. Mr. Chairman, I yield myself 2 minutes, and I yield to 
the gentleman from Michigan (Mr. Ehlers) for the purpose of a colloquy.
  Mr. EHLERS. Mr. Chairman, I want to thank the gentleman from Virginia 
(Mr. Goodlatte) for yielding time for purposes of this colloquy; and I 
commend him for all the hard work he has done to address the Y2K 
litigation issue in this bill.
  As the gentleman knows, I have expressed a deep concern to him and 
others about the bill's failure to distinguish between Y2K defects that 
originated before the issue was widely recognized as a problem and the 
Y2K defects that originated after the issue was commonly known. I 
believe this is a critical distinction to make if we are going to 
responsibly modify the laws governing liability in Y2K-related matters.
  Further, I am concerned about the absence in the bill of affirmative 
incentives for manufacturers to fix defective consumer products in an 
expeditious manner should they fail because of a Y2K problem.
  It is especially important to explicitly address the liability and 
damages issues raised by the extensive use of embedded chips or 
microprocessors. These are widely used in consumer products, and Y2K 
defects in these chips can greatly inconvenience and perhaps damage the 
businesses and property of the owners of common consumer products.
  It was my desire to address what I see as a deficiency in the bill 
with an amendment to exempt from the bill those products manufactured 
after the beginning of 1995.
  While I was prohibited by the Committee on Rules from offering my 
amendment on the floor today, I am pleased that the gentleman from 
Virginia and I have made some progress in arriving at a mutually 
agreeable solution to these issues. I am encouraged by the gentleman's 
pledge, as well as the assurances from other bill sponsors, to attempt 
to specifically address these matters as work on the bill continues in 
conference.
  Mr. GOODLATTE. Mr. Chairman, I thank the gentleman from Michigan and 
appreciate hearing his concerns about the additional issues that this 
legislation could be expanded to address. As he accurately stated, I 
have agreed to attempt to specifically address these matters as work on 
the bill continues in conference.
  Mr. Chairman, I reserve the balance of my time.
  Mr. CONYERS. Mr. Chairman, I yield 1 minute to the gentlewoman from 
California (Ms. Lofgren), the major author of our substitute.
  Ms. LOFGREN. Mr. Chairman, although we do not have time to go into a 
full debate on everything, I do think it is important to clarify a 
couple of points that have been discussed.
  First, there is a provision in the substitute on page 14, on line 13, 
relative to material defects that must be applied with particularity; 
and I think that is very specific and does put requirements on the 
pleaders.
  There was a comment made that the intent or the drift was that a 
court might just remove the provisions relative to joint and several 
for a reason that was frivolous. It is only fraud that would allow a 
court to do that if there was minimal negligence.
  The definition of fraud found on page 21 is standard definition of 
fraud. I mean, it is not something new. If it is less than perfect, I 
do not know if it is, but certainly we can work on it. But I thought it 
was important to clarify those.
  Mr. GOODLATTE. Mr. Chairman, it is my pleasure to yield 3 minutes to 
the distinguished gentleman from California (Mr. Dreier), chairman of 
the Committee on Rules, a leader on this and other technology issues.
  Mr. DREIER. Mr. Chairman, I rise in strong opposition to the measure 
and strong support of the bill. But before I speak about it, I would 
like to especially compliment the distinguished gentleman from Virginia 
(Mr. Goodlatte), who has been doing a superb job on this measure. I 
would also like to say that it has been a pleasure to work with the 
gentleman from Virginia (Mr. Davis), who successfully brought the 
Fairfax Journal editorial endorsement of our position in this morning.
  Let me say that, this morning, as I closed the debate on the rule, I 
talked about the fact that both plaintiffs and defendants are very 
supportive of the overall measure. I think it is important to 
underscore that there are a wide range of high-tech organizations out 
there, associations, which are opposed to the Conyers substitute and 
supportive of our underlying bill.
  They include the American Electronics Association, the Business 
Software Alliance, Computing Technology Industry Association, the 
Information Technology Association of America, the Information 
Technology Industry Council, the Semiconductor Industry Association, 
and the Software and Information Industry Association.
  Also, the coalition supporting our bill is basically well beyond 
high-tech companies. The single largest small business organization in 
this country is the National Federation of Independent Business. They 
have hundreds of thousands of members, I know, all over the country. In 
fact, I was an NFIB member before coming to this institution. I will 
say that they are strongly supporting our measure and opposing this 
substitute.
  We have also big businesses involved supporting this thing. So it 
really is a collection of entrepreneurs, small and large, who are 
supportive of the underlying bill and opposed to this substitute which 
is being proposed.
  This legislation does not eliminate anyone's right to sue. It is very 
important that their day in court is maintained. Instead, the common-
sense legislation prevents the threat from litigation from stifling 
good-faith efforts to address potential Y2K problems before they 
happen.
  I reluctantly oppose the substitute. I have enjoyed working with my 
good friends on the other side of the aisle and will continue in the 
months and years to come to do that. But I believe that the underlying 
bill is the best approach for us to take.
  Mr. CONYERS. Mr. Chairman, I am pleased to yield 4 minutes to the 
gentleman from Michigan (Mr. Bonior), the minority whip.
  Mr. BONIOR. Mr. Chairman, last week on the floor, we dealt with the 
bankruptcy bill, and my Republican colleagues talked about personal 
responsibility and, indeed, past legislation to deal with personal 
responsibility on the question of bankruptcy.
  Today, we have a bill that exempts corporations from that same 
responsibility. Last week, responsibility; this week, exemption from 
responsibility.

[[Page 9375]]

  This bill strips consumers of their right to seek justice in the 
courts. The bill, instead of addressing legitimate concerns of the 
high-tech industry, which the Lofgren-Conyers-Boucher substitute does, 
this bill is an example of gross excess. It is radical. It is extreme 
in its approach.

                              {time}  1530

  It deprives, as we have heard from several speakers here, consumers 
and small businesses of their right to seek full damages. And for the 
life of me, I say to my friend, the gentleman from California (Mr. 
Dreier), who just spoke, if the NFIB really cares about the small 
business folks, I do not for the life of me understand where they are 
on this. It even deprives them of these rights to seek full damages in 
cases of deliberate and malicious misconduct.
  It limits the ability of consumers to join together in class action 
suits. Of course, then we empower big corporations to divide and 
conquer. It discourages consumers and small businesses from going to 
court in the first place because they risk the burden of massive court 
costs if they lose their case against wealthy corporations.
  Yes, Y2K is a serious problem, but this is not a serious solution. 
All corporations should be held responsible for their actions. This 
bill sets up a double standard. It absolves special groups of 
corporations from their responsibilities. This act would effectively 
strip consumers of their rights to pursue justice in the courts and it 
would send a terrible message that some corporations can defraud 
consumers and just walk away.
  Mr. Chairman, I urge my colleagues to support the Lofgren-Conyers-
Boucher substitute. They strike a good balance between the legitimate 
concerns of the high-tech industry and the critical need to maintain 
strong protection for consumers and small businesses.
  Mr. GOODLATTE. Mr. Chairman, I yield 2 minutes to the gentleman from 
Texas (Mr. Armey), our distinguished majority leader.
  Mr. ARMEY. Mr. Chairman, I thank the gentleman for yielding me this 
time.
  Colleagues on both sides of the aisle ought to take a quick look at 
where we are today and say what is this really all about and what is 
our responsibility as a legislative body, indeed the Congress of the 
United States.
  Well, what it is about, my colleagues, is the Year 2000 and the 
extent to which the American people do not fully realize how their year 
can be affected by this wonderful New Year's Eve celebration when the 
clocks turn over if the computer chips do not. This is a big deal.
  My nightmare about Y2K is sitting at home, as I do with my wife on 
New Year's Eve, watching the celebration in Times Square as we have 
always done on New Year's Eve, watching that ball begin to drop, and 
participating as we do with the countdown, 5, 4, 3, 2, 1, and then 
blackness. The TV goes off, the ball does not hit the bottom and we 
have people stranded all over Times Square. Their watches have stopped 
working. They cannot get to an ATM to give them cash. They cannot get a 
cab. Their electricity does not work. Their water has stopped running. 
Lord have mercy if they do get home. They cannot get up the next 
morning because their alarm does not go off. We could have all kinds of 
confusion. This is a big, big, big deal.
  Now, I have to tell my colleagues that all those wonderful people in 
the computer industry that are so concerned about the quality of their 
work, as they are, want to solve this problem. But they are like the 
good Samaritan. Or perhaps they are not. The good Samaritan had no 
fear. He stopped and helped. But we know today that there are many 
potential good Samaritans, we talk about them in the medical 
profession, where they do not stop and help because they are afraid of 
the ensuing lawsuit.
  Now, we have documentation right now of millions, hundreds of 
thousands of young, skilled, able people with the technical ability to 
solve this problem on behalf of all of America, wherever it presents 
itself, who are saying, unlike the good Samaritan, I do not dare stop 
to help; I do not dare get involved; I cannot afford the risk of the 
lawsuit exposure that I face under current law. What a shame.
  We cannot in good conscience in this body allow that to be the case. 
Our responsibility is to help those with the ability to solve the 
problem before the year gets here. Let them be free to understand that 
they should engage and, if they do engage, they will not be subjected 
to unreasonable, excessive, greedy lawsuits.
  We should have a system of law that addresses this problem in such a 
way as to reward cooperation and does not reward confrontation. We 
should protect the problem solvers, not those that are sitting on the 
sidelines now licking their chops hoping the problem will not be solved 
so they can move in like a bunch of buzzards and vultures and feed off 
the carcasses. That is not, my colleagues, what responsibility is all 
about in America.
  I know the lawyers have been planning on this day. We all know about 
the training sessions they have had. And, unfortunately, all those 
bright young technicians with all that great ability know about it, 
too. So all of the visibility that the legal profession has had in 
terms of their preparing themselves to swoop down on the carcasses of 
our dead toasters and create a lawsuit has said to these young people, 
I am staying out of harm's way. I will not get involved.
  We have to look at ourselves and our responsibility and we have to 
recognize one very simple thing, and we can address it with this simple 
question. If we vote ``yes'' on this legislation, we will have found 
the right answer to this question. Do we want to live in a world 
between now and January 1 where Y2K is faced by a more well-prepared 
legal profession than a well-prepared America? I do not believe that is 
what our objective should be.
  Let us reward those who would cooperate and fix the problem. Let us 
insulate them from frivolous lawsuits, and let us stop the needless, 
senseless confrontation that is just designed to line the lawyers' 
pockets over somebody else's misfortune and failure.
  We can solve this problem. We are a great Nation. Our young people 
are outstanding. How many of them do we know that are doing things now 
in this electronic and computer field that many people my age do not 
even understand. They are wizards. They are wonderful. They ought not 
to be beset even by the fears of lawyers. Let them do their thing, let 
them be free.
  And on New Year's Eve, I promise my colleagues, if we leave it to the 
technicians and keep the lawyers out of the way, as this bill would do, 
we will sit there and we will count 5, 4, 3, 2, 1. And in the bright 
light of our TV and living room lights, I will get that kiss from my 
wife that I ought to get on New Year's Eve.
  Mr. CONYERS. Mr. Chairman, I yield 1 minute to the gentlewoman from 
California (Ms. Sanchez), and I say to the majority leader that if we 
do not get the substitute, there will be that gloomy prediction.
  Ms. SANCHEZ. Mr. Chairman, I rise today in support of the Democratic 
alternative. If we do not do the Democratic alternative, we are about 
to squander the ability to do a bipartisan bill for the problem of the 
Year 2000.
  Joined by the ranking member, the gentleman from Michigan (Mr. John 
Conyers) and the gentleman from Virginia (Mr. Rick Boucher), Democrats 
on the Committee on the Judiciary sought to resolve the three most 
important problems identified by the high-tech community by offering:
  Number one, a cooling-off period so that parties might settle their 
differences out of court; secondly, additional pleading requirements 
tailored to the Year 2000 problem to discourage frivolous lawsuits; 
and, throw, a fair way for the parties with Year 2000 claims to share 
the liability.
  The Democratic substitute is narrowly tailored to address Y2K 
concerns. Nothing else, only what is necessary. And, therefore, it 
actually is a very good start.
  My colleagues have found a fair and effective solution so that those 
who are negligent are held responsible, while those who have little to 
do with the

[[Page 9376]]

bug are not punished for something they did not do.
  Mr. GOODLATTE. Mr. Chairman, I yield 1 minute to the gentleman from 
California (Mr. Cunningham).
  Mr. CUNNINGHAM. Mr. Chairman, I know people on both sides of the 
aisle have got good motives, but I would like to just once have a bill 
that comes to the House floor that does not benefit the trial lawyers.
  If we look at some health care bills, they are a boon to trial 
lawyers. And they will raise the cost of health care because there are 
no caps on punitive damages, and lawsuits will drive health care costs 
up. Tobacco makes the trial lawyers rich. And now we look at this 
amendment, and it is always the trial lawyers that benefit in these 
things. Why?
  In my opinion, it is because they give 90 percent of their campaign 
funds to Democrats. This substitute would mean a boon for trial 
lawyers. Let us set the trial lawyers apart and let us work for the 
betterment of people, not the trial lawyers but for the people. Oppose 
this substitute, and support this important bill.
  Mr. CONYERS. Mr. Chairman, how much time remains?
  The CHAIRMAN. The gentleman from Michigan (Mr. Conyers) has 2\1/2\ 
minutes remaining, and the gentleman from Virginia (Mr. Goodlatte) has 
4 minutes remaining.
  Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume.
  This is not a matter about what is going to happen on New Year's Eve 
and it is not a matter of what will happen to trial lawyers. I am sure 
somebody here besides me in the Hall must know that punitive damages 
are regularly set aside by judges who object to large amounts.
  The high-tech community itself has made it clear that they are 
interested in a bill that specifically addresses liability issues 
unique to Y2K, but they are not interested in a far-reaching tort 
reform proposal. They want a narrowly tailored bill that will address 
the problem of frivolous lawsuits. We do that.
  The base bill, H.R. 775, goes well beyond reasonable reform by 
failing to protect consumers. They shield grossly negligent defenders 
and they harm innocent plaintiffs. Instead of creating a positive 
incentive, this creates new reasons to avoid remediation. H.R. 775 
should not be supported by ourselves and it will not be signed by the 
President.
  We have the real deal. We have the way out for both the high-tech 
community and those who have been unfortunately affected by it. The Y2K 
problem, as the gentlewoman from California (Ms. Lofgren) stated 
earlier, is a legitimate issue, but has, in my judgment, been turned 
into a political tool. It is unfortunate that the information 
technology community, with its legitimate concerns, are being used as 
pawns in this political game.
  The base bill goes well beyond reasonable reform. It is unprecedented 
and unjustified and is also going nowhere. So vote for the substitute 
for a realistic response to a potentially serious problem without 
overreaching.
  Mr. Chairman, I urge each of my colleagues to join me in voting for 
this good faith effort to deal with the Y2K problem. Support the 
Lofgren-Conyers-Boucher substitute.
  Mr. Chairman, I yield back the balance of my time.
  Mr. GOODLATTE. Mr. Chairman, I yield myself 45 seconds.
  Mr. Chairman, in a moment I will yield the remaining time to the 
gentleman from Virginia (Mr. Davis), the sponsor of the legislation, to 
close our arguments against this substitute and for the bill.
  Before I do that, I think it is only appropriate that we recognize 
some people. I particularly want to commend the gentleman from Virginia 
(Mr. Davis), as well as the chief cosponsor of the legislation, the 
gentleman from Virginia (Mr. Moran), the gentleman from California (Mr. 
Dooley) and the gentleman from Alabama (Mr. Cramer) of the Democratic 
side, the gentleman from California (Mr. Dreier) and the gentleman from 
California (Mr. Cox) on our side of the aisle for their chief 
cosponsorship of this legislation.
  In addition, I want to recognize the staff, who worked very, very 
hard on this; particularly Diana Schacht of the Committee on the 
Judiciary; Ben Kline of my office; Trey Hardin, Amy Heering and Melissa 
Wojak from the office of the gentleman from Virginia (Mr. Davis); as 
well as John Flannery, from the office of the gentlewoman from 
California (Ms. Lofgren); Perry Apelbaum and Semora Ryder of the office 
of the gentleman from Michigan (Mr. Conyers); Ben Cohen of the office 
of the gentleman from California (Mr. Cox); and Brian Bieron, and Don 
Freeman. They all worked very hard. This has been done in the spirit of 
comity.
  Mr. Chairman, I yield the balance of my time to the gentleman from 
Virginia (Mr. Davis).
  Mr. DAVIS of Virginia. Mr. Chairman, just to set the record straight, 
the high-tech industry rejects the substitute amendment offered by the 
gentleman from Michigan (Mr. Conyers) and they support the underlying 
bill H.R. 775. That has been signed and put into the record by a number 
of representatives of the software industry and the information 
technology industry.
  In addition to that, I want to thank the Chamber of Commerce, the 
National Association of Manufacturers, and the NFIB for putting 
together a coalition of groups that have helped us in lobbying and 
getting support for this legislation and making Members aware of the 
consequences if we do not act in this body on this legislation in a 
timely manner.

                              {time}  1545

  Now, we have heard a lot of talk today about we need to solve this on 
a bipartisan basis, and I agree with that. This is the beginning of a 
long trek. It is not the end. And we look forward to working with our 
colleagues that maybe could not find themselves able to support this 
legislation and hope we can bring them on board and the administration 
on board as we move forward.
  But we have a bipartisan bill. It is H.R. 775. There are numerous 
Democratic and Republican sponsors and cosponsors of this legislation. 
What we have before us now is a partisan substitute. If we are really 
going to solve this problem together, we need to work together and 
bring Members of both parties together.
  The whip from the other side talked about taking personal 
responsibility. Our legislation takes personal responsibility. Under 
the underlying bill, if they are damaged in a Y2K suit, they get their 
full economic damages. In fact, they can get three times their economic 
damages in punitive damages or $250,000, whichever is larger.
  We do not take that away. What we do take away is one of the three 
legs of this legislation, and that is unlimited damages, for whatever 
reason, for punitive damages that drive up insurance costs, damages 
that drive up the cost of settlement and encourage more lawsuits and 
discourage companies from trying to fix the problems right now that we 
are attempting to solve in Y2K. Because companies will not fix a 
problem if they can be held liable down the road, even if they better 
that product should it fail.
  Joint and several liability also would pick the pockets of people who 
are improving these because they happen to be a little wealthier and 
easier to reach. Our legislation keeps proportional liability. This is 
a key underpinning of this legislation, to reward companies for making 
products better, to reward companies for trying to come in and make a 
product better so that it will deliver on Y2K, as complex or as messed 
up as it might have been when they initially visited it.
  And finally, the third leg is notification. And this is a consumer 
issue. If I am going to be represented in a Y2K suit, I ought to be 
told by that attorney I am being represented in court before they cut a 
deal on my behalf and decide what kind of damages I get.
  Our legislation simply says that if an attorney is going to represent 
me in a class-action suit, I ought to be notified of that and have the 
opportunity to opt out of that. That is fair consumer legislation. That 
is not radical tort reform. That is something that every

[[Page 9377]]

consumer ought to have. And we require that, as well.
  I want to commend my colleagues from both sides of the aisle for 
working together with this in a bipartisan way. I want to continue to 
invite the administration, the President, and the Vice President to 
work with us on this legislation to make it work for everyone, and 
again, thank the business groups, particularly the Chamber of Commerce, 
which represent small businesses and large businesses nationally that 
will be plaintiffs and defendants in this legislation, for helping us 
put this together.
  I ask for rejection of the fig leaf of a partisan substitute and 
support of bipartisan H.R. 775.
  Mr. FORD. Mr. Chairman, I rise today in support of the Conyers 
substitute because I do think that there is a need for reasonable 
legislation that addresses this once-in-a-lifetime problem.
  I am a cosponsor of this legislation, but I cannot support it in its 
current form for a number of reasons:
  The use of a ``reasonable efforts'' standard for the sole defense in 
Y2K litigation exceeds the burden of proof in most federal and state 
court civil proceedings. Normally, plaintiffs must meet the less 
onerous ``preponderance of the evidence'' standard.
  In addition to setting up a new legal standard, this term is at best 
ambiguous. How will the courts know how to interpret this language?
  Finally, the supporters of this legislation are inconsistent. Just 
last week this Chamber passed a bankruptcy reform bill with the cries 
of ``personal/corporate responsibility''. In its current form, this 
legislation would permit some of these same entities to evade any sort 
of responsibility.
  This Democratic substitute is narrowly tailored to address Y2K 
concerns. Like the base bill, it provides for a cooling off period, has 
additional pleading requirements to discourage frivolous lawsuits, and 
provides for a fair way for the parties with Y2K claims to chair the 
liability.
  I urge my colleagues to support the Conyers substitute.
  The CHAIRMAN. The question is on the amendment in the nature of a 
substitute offered by the gentleman from Michigan (Mr. Conyers).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.


                             Recorded Vote

  Mr. CONYERS. Mr. Chairman, I demand a recorded vote.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 190, 
noes 236, not voting 8, as follows:

                             [Roll No. 126]

                               AYES--190

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baird
     Baldacci
     Baldwin
     Barrett (WI)
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bishop
     Blagojevich
     Blumenauer
     Bonior
     Borski
     Boswell
     Boucher
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson
     Clay
     Clayton
     Clyburn
     Conyers
     Costello
     Coyne
     Crowley
     Cummings
     Danner
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Dixon
     Doyle
     Duncan
     Edwards
     Engel
     English
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Frost
     Ganske
     Gejdenson
     Gephardt
     Gilman
     Gonzalez
     Green (TX)
     Gutierrez
     Hall (OH)
     Hastings (FL)
     Hill (IN)
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holt
     Hooley
     Hoyer
     Inslee
     Jackson (IL)
     Jackson-Lee (TX)
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy
     Kildee
     Kilpatrick
     Kind (WI)
     King (NY)
     Kleczka
     Klink
     Kucinich
     LaFalce
     Lampson
     Lantos
     Larson
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Luther
     Maloney (CT)
     Maloney (NY)
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McDermott
     McGovern
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Minge
     Mink
     Moakley
     Mollohan
     Moore
     Murtha
     Nadler
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Paul
     Payne
     Pelosi
     Phelps
     Pomeroy
     Price (NC)
     Rahall
     Reyes
     Rivers
     Rodriguez
     Roemer
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Scott
     Serrano
     Sherman
     Shows
     Skelton
     Smith (WA)
     Snyder
     Spratt
     Stabenow
     Stark
     Strickland
     Stupak
     Terry
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Traficant
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Vento
     Visclosky
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Weygand
     Wise
     Woolsey
     Wu
     Wynn

                               NOES--236

     Aderholt
     Archer
     Armey
     Bachus
     Baker
     Ballenger
     Barcia
     Barr
     Barrett (NE)
     Bartlett
     Bass
     Bateman
     Bereuter
     Biggert
     Bilbray
     Bilirakis
     Bliley
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boyd
     Brady (TX)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Campbell
     Canady
     Cannon
     Castle
     Chabot
     Chambliss
     Chenoweth
     Clement
     Coble
     Coburn
     Collins
     Combest
     Condit
     Cook
     Cooksey
     Cramer
     Crane
     Cubin
     Cunningham
     Davis (VA)
     Deal
     DeLay
     DeMint
     Diaz-Balart
     Dickey
     Doggett
     Dooley
     Doolittle
     Dreier
     Dunn
     Ehlers
     Ehrlich
     Emerson
     Eshoo
     Everett
     Ewing
     Fletcher
     Foley
     Forbes
     Fossella
     Fowler
     Franks (NJ)
     Frelinghuysen
     Gallegly
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Goode
     Goodlatte
     Goodling
     Gordon
     Goss
     Graham
     Granger
     Green (WI)
     Greenwood
     Gutknecht
     Hall (TX)
     Hansen
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (MT)
     Hilleary
     Hobson
     Hoekstra
     Holden
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Isakson
     Istook
     Jenkins
     John
     Johnson (CT)
     Johnson, Sam
     Jones (NC)
     Kasich
     Kelly
     Kingston
     Knollenberg
     Kolbe
     Kuykendall
     LaHood
     Largent
     Latham
     LaTourette
     Lazio
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     McCollum
     McCrery
     McHugh
     McInnis
     McIntosh
     McIntyre
     McKeon
     Metcalf
     Mica
     Miller (FL)
     Miller, Gary
     Moran (KS)
     Moran (VA)
     Morella
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Ose
     Oxley
     Packard
     Pease
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pickett
     Pitts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Quinn
     Radanovich
     Ramstad
     Regula
     Reynolds
     Riley
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Salmon
     Sanford
     Saxton
     Scarborough
     Schaffer
     Schakowsky
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simpson
     Sisisky
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Spence
     Stearns
     Stenholm
     Stump
     Sununu
     Sweeney
     Talent
     Tancredo
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Thomas
     Thornberry
     Thune
     Tiahrt
     Toomey
     Upton
     Walden
     Walsh
     Wamp
     Watkins
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Whitfield
     Wicker
     Wilson
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--8

     Barton
     Brown (CA)
     Cox
     Jefferson
     Napolitano
     Rangel
     Slaughter
     Weller

                              {time}  1610

  Mr. EWING and Mr. CLEMENT changed their vote from ``aye'' to ``no.''
  So the amendment in the nature of a substitute was rejected.
  The result of the vote was announced as above recorded.
  The CHAIRMAN. The question is on the committee amendment in the 
nature of a substitute made in order as original text, as modified, as 
amended.
  The committee amendment in the nature of a substitute, as modified, 
as amended, was agreed to.
  The CHAIRMAN. Under the rule, the Committee rises.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. 
Burr of North Carolina) having assumed the chair, Mr. LaHood, Chairman 
of the Committee of the Whole House on the State of the Union, reported 
that that Committee, having had under consideration 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, pursuant to House Resolution 166, he reported the bill 
back to the House with an amendment adopted by the Committee of the 
Whole.
  The SPEAKER pro tempore. Under the rule, the previous question is 
ordered.

[[Page 9378]]

  Is a separate vote demanded on any amendment to the committee 
amendment in the nature of a substitute adopted by the Committee of the 
Whole? If not, the question is on the amendment.
  The amendment was agreed to.
  The SPEAKER pro tempore. The question is on the engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


               Motion to Recommit Offered by Mr. Conyers

  Mr. CONYERS. Mr. Speaker, I offer a motion to recommit.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. CONYERS. I am, Mr. Speaker.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:

       Mr. Conyers moves to recommit the bill H.R. 775 to the 
     Committee on the Judiciary with instructions to report the 
     same back to the House forthwith with the following 
     amendment:
       Add after section 104 the following:

     SEC. 105. YEAR 2000 ACTIONS INVOLVING FOREIGN PRODUCTS OR 
                   SERVICES.

       (a) General Rule.--In any year 2000 action for damages or 
     other relief that is sustained in the United States and that 
     relates to the purchase or use of a product or service 
     manufactured or distributed outside the United States by a 
     foreign seller or manufacturer, the Federal court in which 
     such action is brought shall have jurisdiction over such 
     seller or manufacturer if the seller or manufacturer knew or 
     reasonably should have known that the product or service 
     would be imported for sale or use in the United States.
       (b) Admission.--If a foreign seller or manufacturer of a 
     product or service involved in a year 2000 action fails to 
     furnish any testimony, document, or other thing upon a duly 
     issued discovery order by the court in the action, such 
     failure shall be deemed an admission of any fact with respect 
     to which the discovery order relates.
       (c) Process.--Process in an action described in subsection 
     (a) may be served wherever the foreign seller or manufacturer 
     involved in the action is located, has an agent, or transacts 
     business.

  Mr. CONYERS (during the reading). Mr. Speaker, I ask unanimous 
consent that the motion to recommit be considered as read and printed 
in the Record.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Michigan?
  There was no objection.
  The SPEAKER pro tempore. The gentleman from Michigan (Mr. Conyers) is 
recognized for 5 minutes.

                              {time}  1615

  Mr. CONYERS. Mr. Speaker, this motion to recommit provides for 
jurisdiction, service of process and discovery in Y2K actions brought 
against corporate defendants located outside of the United States. It 
is based on the same amendment I offered on the product liability bill 
in another Congress which twice passed the House by overwhelming 
bipartisan votes.
  Currently, my amendment responds to a couple of problems. It is 
inordinately difficult for United States citizens and businesses to 
bring legal actions against foreign defendants to obtain compensation 
for harm inside the United States. We correct it with this motion to 
recommit.
  We respond to the problem, first, by creating a nationwide context 
test whenever a foreign defendant is sued in Federal court if it knew 
or reasonably should have known that its conduct would cause harm in 
this country. This type test has repeatedly been upheld by the Federal 
courts and is a part of the law in the Foreign Sovereign Immunities 
Act.
  The second thing the amendment would do is provide for worldwide 
service of process. Presently, a major problem with service is that 
each of our States requires different and varying methods of process. 
Uniform worldwide service of process will fix this problem and is 
consistent with other Federal laws, including the Clayton Act and 
securities laws, permitting service wherever the defendant may be 
found.
  Third, my amendment ensures that the foreign persons are subject to 
the same rules of discovery as our own citizens and corporations when 
they are sued for wrongdoing. This is a particular problem in the 
context of Y2K litigation.
  In the late 1980's and early 1990's, the percentage of foreign-made 
computer components and U.S. computers was as high as 65 percent. The 
most recent information supplied by the Commerce Department predicts 
Asian computer suppliers have now announced their intentions to wrest 
control away from U.S. rivals and pose a challenge in high-performance 
computer systems and PCs. If they succeed, the very least we can do is 
make sure they are subject to the rules of our legal system.
  So, with a record trade deficit last year of $165 billion, a deficit 
last month of $20 billion, our Nation can no longer afford to favor 
foreign defendants in court. Please join us on both sides of the aisle 
in voting for this important amendment.
  Mr. Speaker, I yield back the balance of my time.
  Mr. GOODLATTE. Mr. Speaker, I rise in opposition to the motion to 
recommit.
  The SPEAKER pro tempore (Mr. Burr of North Carolina). The gentleman 
from Virginia is recognized for 5 minutes.
  Mr. GOODLATTE. Mr. Speaker, I commend the gentleman from Michigan 
(Mr. Conyers) for the comity in which this debate has taken place, and 
I extend my compliments to other Members on his side of the aisle as 
well, including a number who are supporting this legislation, but I 
must rise in strong opposition to his motion to recommit.
  The motion raises significant constitutional and international law 
concerns, represents a serious potential irritant in our bilateral 
relations with other countries and raises a specter of foreign 
retaliation against American firms, and that is the matter on which I 
am most strongly opposed.
  If we were to go ahead and enact this provision, we would be opening 
U.S. companies all over the world to treatment different than they are 
receiving now because they are receiving it under international treaty 
obligations that would expose them to treatment in courts elsewhere 
that would jeopardize their position.
  Mr. Speaker, one of the provisions of this motion to recommit would 
subject foreign corporations to trial in U.S. courts without their ever 
having to be in the courtroom, and if the same provision were applied 
to U.S. companies in countries all over the world, one can only guess 
what kinds of denial of due process would occur for U.S. companies and 
U.S. businessmen and women treated with this same consideration in the 
courts of other countries who today comply with international treaty 
obligations that do not expose our corporations and businessmen and 
women to those considerations.
  The amendment implicates the fifth amendment and international law, 
and it is possible that it would compromise the due process rights of a 
foreign defendant. The extent to which American statutes apply to 
foreign nationals already is a point of contention in our foreign 
relations. We should proceed very cautiously in this area, especially 
since the gentleman's motion to recommit was not the subject of 
hearings. The amendment's requirement to force a foreign defendant to 
comply with U.S. discovery requirements failed to accord appropriate 
deference to the sensibilities and prerogatives of other countries.
  Mr. Speaker, because the motion to recommit would invite retaliation 
against U.S. companies doing business overseas and might affect the 
level of foreign investment in the U.S., thereby creating unemployment, 
the business community and others in this country are strongly opposed 
to this amendment, and I encourage my colleagues to vote against the 
motion to recommit.
  Mr. Speaker, I yield to the gentleman from Virginia (Mr. Davis).
  Mr. DAVIS of Virginia. This is a deal killer. The gentleman knows 
that. I would ask if the administration supports this amendment. They 
have opposed it in the past.
  Mr. CONYERS. Mr. Speaker, will the gentleman yield?
  Mr. GOODLATTE. I yield to the gentleman from Michigan.
  Mr. CONYERS. Mr. Speaker, this is already the law. They do not have 
to

[[Page 9379]]

support the amendment. This is an existing law in the United States 
Code Annotated as we speak.
  Mr. DAVIS of Virginia. Mr. Speaker, I thank the gentleman very much.
  Mr. CONYERS. The gentleman from Virginia is welcome.
  Mr. DAVIS of Virginia. Because as a signatory to the Hague 
Convention, the United States is bound to follow its procedure rules, 
and in this particular case we do not think this rule is necessary if 
it is already in the law. Why would we put this in if it is already in 
the law?
  The Commission of the European Communities and its member states have 
expressed strong objections to this in the past because it ignores the 
rights of defendants in countries outside the jurisdictions of business 
and in litigation. It ignores the sovereign rights of countries which 
have different procedural rules than we do; and, if it is enacted, it 
is likely that other countries will also ignore the provisions of the 
Hague Convention and begin applying their own procedural rules to 
American companies whose products entered the stream of commerce 
abroad. American businesses stand to lose, not gain, from this 
provision.
  This makes mischief of what has been, I think, a pretty good debate 
and bill up to this point; and I urge that we reject this motion to 
recommit.
  Mr. GOODLATTE. Mr. Speaker, this is an outstanding bill; and I urge 
my colleagues to oppose the motion to recommit and support this reform 
legislation which will truly help us enter the new millennium and deal 
with the potential Y2K bugs in a way that resolves these problems 
without encouraging the massive explosion of litigation that many have 
predicted.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.


                             Recorded Vote

  Mr. CONYERS. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. Pursuant to clause 9 of rule XX, the Chair 
will reduce to a minimum of 5 minutes the period of time within which a 
vote by electronic device will be taken on the question of the passage 
of the bill.
  The vote was taken by electronic device, and there were--ayes 184, 
noes 246, not voting 4, as follows:

                             [Roll No. 127]

                               AYES--184

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baird
     Baldacci
     Baldwin
     Barrett (WI)
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bishop
     Blagojevich
     Blumenauer
     Bonior
     Borski
     Boucher
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson
     Clay
     Clayton
     Clyburn
     Conyers
     Costello
     Coyne
     Crowley
     Cummings
     Danner
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dingell
     Dixon
     Doggett
     Doyle
     Duncan
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Frost
     Gejdenson
     Gephardt
     Gonzalez
     Gordon
     Green (TX)
     Gutierrez
     Hall (OH)
     Hastings (FL)
     Hill (IN)
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holt
     Hooley
     Hoyer
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E.B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy
     Kildee
     Kilpatrick
     Kind (WI)
     Kleczka
     Klink
     Kucinich
     LaFalce
     Lampson
     Lantos
     Larson
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Luther
     Maloney (CT)
     Maloney (NY)
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McDermott
     McGovern
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Minge
     Mink
     Moakley
     Mollohan
     Moore
     Murtha
     Nadler
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Phelps
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Schakowsky
     Scott
     Serrano
     Sherman
     Shows
     Skelton
     Spratt
     Stabenow
     Stark
     Strickland
     Stupak
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Traficant
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Vento
     Visclosky
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Weygand
     Wise
     Woolsey
     Wu
     Wynn

                               NOES--246

     Aderholt
     Archer
     Armey
     Bachus
     Baker
     Ballenger
     Barcia
     Barr
     Barrett (NE)
     Bartlett
     Bass
     Bateman
     Bereuter
     Biggert
     Bilbray
     Bilirakis
     Bliley
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boswell
     Boyd
     Brady (TX)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Campbell
     Canady
     Cannon
     Castle
     Chabot
     Chambliss
     Chenoweth
     Clement
     Coble
     Coburn
     Collins
     Combest
     Condit
     Cook
     Cooksey
     Cox
     Cramer
     Crane
     Cubin
     Cunningham
     Davis (VA)
     Deal
     DeLay
     DeMint
     Diaz-Balart
     Dickey
     Dicks
     Dooley
     Doolittle
     Dreier
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ewing
     Fletcher
     Foley
     Forbes
     Fossella
     Fowler
     Franks (NJ)
     Frelinghuysen
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goodling
     Goss
     Graham
     Granger
     Green (WI)
     Greenwood
     Gutknecht
     Hall (TX)
     Hansen
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (MT)
     Hilleary
     Hobson
     Hoekstra
     Holden
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Inslee
     Isakson
     Istook
     Jenkins
     John
     Johnson (CT)
     Johnson, Sam
     Jones (NC)
     Kasich
     Kelly
     King (NY)
     Kingston
     Knollenberg
     Kolbe
     Kuykendall
     LaHood
     Largent
     Latham
     LaTourette
     Lazio
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     McCollum
     McCrery
     McHugh
     McInnis
     McIntosh
     McIntyre
     McKeon
     Metcalf
     Mica
     Miller (FL)
     Miller, Gary
     Moran (KS)
     Moran (VA)
     Morella
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Ose
     Oxley
     Packard
     Paul
     Pease
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pickett
     Pitts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Quinn
     Radanovich
     Ramstad
     Regula
     Reynolds
     Riley
     Roemer
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Salmon
     Sanford
     Saxton
     Scarborough
     Schaffer
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simpson
     Sisisky
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Souder
     Spence
     Stearns
     Stenholm
     Stump
     Sununu
     Sweeney
     Talent
     Tancredo
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Toomey
     Upton
     Walden
     Walsh
     Wamp
     Watkins
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--4

     Barton
     Brown (CA)
     Napolitano
     Slaughter

                              {time}  1643

  Mr. CHAMBLISS changed his vote from ``aye'' to ``no.''
  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore (Mr. Burr of North Carolina). The question is 
on the passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.


                             Recorded Vote

  Mr. CONYERS. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. This is a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 236, 
noes 190, not voting 8, as follows:

                             [Roll No. 128]

                               AYES--236

     Aderholt
     Archer
     Armey
     Bachus
     Baker
     Ballenger
     Barcia
     Barr
     Barrett (NE)
     Bartlett
     Bass
     Bateman
     Bereuter
     Biggert
     Bilbray
     Bilirakis
     Bliley
     Blumenauer
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boyd
     Brady (TX)
     Bryant
     Burr

[[Page 9380]]


     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Campbell
     Canady
     Cannon
     Capps
     Castle
     Chabot
     Chambliss
     Chenoweth
     Clement
     Coble
     Coburn
     Collins
     Combest
     Condit
     Cook
     Cooksey
     Cramer
     Crane
     Cubin
     Cunningham
     Danner
     Davis (VA)
     Deal
     DeLay
     Dickey
     Dooley
     Dreier
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Etheridge
     Everett
     Ewing
     Fletcher
     Foley
     Forbes
     Fossella
     Fowler
     Franks (NJ)
     Frelinghuysen
     Gallegly
     Gekas
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goodling
     Gordon
     Goss
     Granger
     Green (WI)
     Greenwood
     Gutknecht
     Hall (OH)
     Hall (TX)
     Hansen
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (MT)
     Hilleary
     Hobson
     Hoekstra
     Holden
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Isakson
     Jenkins
     John
     Johnson (CT)
     Johnson, Sam
     Jones (NC)
     Kasich
     Kelly
     Kingston
     Knollenberg
     Kolbe
     Kuykendall
     LaHood
     Largent
     Latham
     LaTourette
     Lazio
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     McCollum
     McCrery
     McHugh
     McInnis
     McIntosh
     McKeon
     Metcalf
     Mica
     Miller (FL)
     Miller, Gary
     Moran (KS)
     Moran (VA)
     Morella
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Ose
     Oxley
     Packard
     Pease
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Quinn
     Radanovich
     Ramstad
     Regula
     Reynolds
     Roemer
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Salmon
     Sanford
     Saxton
     Scarborough
     Schaffer
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simpson
     Sisisky
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Souder
     Spence
     Stearns
     Stenholm
     Stump
     Sununu
     Sweeney
     Talent
     Tancredo
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Toomey
     Udall (CO)
     Upton
     Velazquez
     Walden
     Walsh
     Wamp
     Watkins
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson
     Wolf
     Young (AK)
     Young (FL)

                               NOES--190

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baird
     Baldacci
     Baldwin
     Barrett (WI)
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bishop
     Blagojevich
     Bonior
     Borski
     Boswell
     Boucher
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capuano
     Cardin
     Carson
     Clay
     Clayton
     Clyburn
     Conyers
     Costello
     Coyne
     Crowley
     Cummings
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Diaz-Balart
     Dicks
     Dingell
     Dixon
     Doggett
     Doolittle
     Doyle
     Duncan
     Edwards
     Engel
     Eshoo
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Frost
     Ganske
     Gejdenson
     Gephardt
     Gibbons
     Gonzalez
     Graham
     Green (TX)
     Gutierrez
     Hastings (FL)
     Hill (IN)
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holt
     Hooley
     Hoyer
     Inslee
     Istook
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy
     Kildee
     Kilpatrick
     Kind (WI)
     King (NY)
     Kleczka
     Klink
     Kucinich
     LaFalce
     Lampson
     Lantos
     Larson
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Luther
     Maloney (CT)
     Maloney (NY)
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Minge
     Mink
     Moakley
     Mollohan
     Moore
     Murtha
     Nadler
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Paul
     Payne
     Pelosi
     Phelps
     Pickett
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Schakowsky
     Scott
     Serrano
     Sherman
     Shows
     Skelton
     Snyder
     Spratt
     Stabenow
     Stark
     Strickland
     Stupak
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Traficant
     Turner
     Udall (NM)
     Vento
     Visclosky
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Weygand
     Wise
     Woolsey
     Wu
     Wynn

                             NOT VOTING--8

     Barton
     Brown (CA)
     Cox
     DeMint
     Napolitano
     Riley
     Skeen
     Slaughter

                              {time}  1652

  Mr. RANGEL and Mr. McINTYRE changed their vote from ``aye'' to 
``no.''
  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  Stated for:
  Mr. DeMINT. Mr. Speaker, on rollcall no. 128, I was unavoidably 
detained. Had I been present, I would have voted ``yes.''

                          ____________________