[Congressional Record (Bound Edition), Volume 145 (1999), Part 9]
[Senate]
[Pages 12741-12752]
[From the U.S. Government Publishing Office, www.gpo.gov]



                                Y2K ACT

  The PRESIDING OFFICER. Under the previous order, there will now be 2 
hours of debate equally divided for closing arguments on S. 96, which 
the clerk will report.
  The legislative assistant read as follows:

       A bill (S. 96) to regulate commerce between and among the 
     several States by providing for its orderly resolution of 
     disputes arising out of computer-based problems related to 
     processing data that includes a two-digit expression of the 
     year's date.

  The Senate resumed consideration of the bill.
  Pending:

       McCain Amendment No. 608, in the nature of a substitute.
       Sessions Amendment No. 623 (to Amendment No. 608), to 
     permit evidence of communications with State and Federal 
     regulators to be admissible in class action lawsuits.
       Gregg/Bond Amendment No. 624 (to Amendment No. 608), to 
     provide for the suspension of penalties for certain year 2000 
     failures by small business concerns.

  Mr. McCAIN. Mr. President, after discussion with the distinguished 
Democrat manager, Senator Hollings, I would like to modify the 
unanimous consent agreement to allow Senator Hollings and I 3 minutes 
each before the vote on final passage is taken. I will withhold that 
request to clear it on both sides. But I think it is appropriate after 
we have votes on amendments that Senator Hollings and I be allowed to 
make brief statements before the final vote on this very important 
issue. So I will withhold that unanimous consent request, but I intend 
to make it at the appropriate time.
  Also for the information of my colleagues, I believe we may not 
require a vote on the Sessions amendment--I believe we are working that 
out on both sides--and we may not require a vote on the Gregg amendment 
as well, although neither have been worked out on both sides. We are 
attempting to do that. So it is entirely possible that at 2:15 we would 
be moving to final passage.
  I note that it is acceptable to the other side, so I ask unanimous 
consent to modify the unanimous consent request, that Senator Hollings 
be allowed 4 minutes and I be allowed 4 minutes prior to the vote on 
final passage of the pending Y2K legislation.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. McCAIN. Mr. President, I believe it is in the unanimous consent 
agreement that there be 2 hours equally divided; is that correct?
  The PRESIDING OFFICER. That is correct.
  Mr. McCAIN. Mr. President, I yield myself whatever time I may 
consume.
  Mr. President, we are about to culminate the work of many months: 
investigation, drafting, negotiation, and compromise. The vote we take 
today will set the tone for the Senate in the new millennium. The 
Senate will either rise to the challenge that the Y2K problem poses and 
provide a proactive solution, or it will allow traditional political 
loyalties to leave us in reactive mode after a problem exists. I am 
optimistic that most of my colleagues recognize the importance of 
providing a balanced approach to avoiding a Y2K litigation quagmire, to 
preserving the nation's economy and providing support to the creativity 
and ingenuity that makes this country the world's leader in technology.
  I want to remind my colleagues that many compromises have been made 
in this bill since it passed out of the Commerce Committee. It is 
certainly not as strong a bill as that passed by the House. These 
compromises have been made in order to get a bill that can have 
bipartisan approval and can be signed into law. We cannot play politics 
with this important issue--we must ensure that this legislation becomes 
law. On the other hand, I have stated clearly that I will not be party 
to passing a mere facade. Unless we really accomplish something, we 
cannot take credit for doing so. Even with all of the compromises we 
have made to get the legislation to this point, I firmly believe that 
the legislation will be effective.
  Before we vote, I want to walk through the provisions of the 
legislation and correct some misconceptions as to how this bill would 
operate. With all of the rhetoric of the past several days, I think 
there has been some concern about the operation of the legislation, 
which I want to allay.
  First, it is critical to remember that this legislation addresses Y2K 
failures which may be encountered by every industry, business, and 
consumer in the country. This legislation is not designed to protect 
the high tech industry or provide it immunity. The intent

[[Page 12742]]

of the legislation is to provide a balance and orderly system for the 
resolution of Y2K failures in a manner that is fair, ensures that real 
problems experienced by consumers and businesses alike are addressed 
quickly, without litigation whenever possible, and that the judicial 
system is not overrun with opportunistic and creative lawsuits. It is 
not the redress of real problems that this legislation seeks to limit.
  It is important to keep in mind that this legislation is supported by 
the broadest array of interests I have ever seen in support of 
legislation. They represent companies which will be plaintiffs, those 
who will be defendants, and those who will likely be both. These varied 
interests have debated among themselves many of the points raised on 
the floor of the Senate regarding the balance between plaintiffs and 
defendants. The compromises made since the bill was passed from the 
Commerce Committee also have refined the balance. What remains today to 
be voted upon is a good piece of legislation for every segment of the 
nation's economy.
  Let me also reiterate that the Y2K date code problem is not simple to 
correct. Millions of lines of code are involved, many in outdated 
languages or in applications that have been revised and upgraded more 
than once or twice. Multiple means of correcting the date codes adds to 
the challenge, as does the rare occurrence of leap year in the first 
year of a new century. Uncertainty as to all the affected embedded 
chips, the interface of the various corrections, and the complexities 
of solving the date code without affecting other aspects of a date 
program, all make this a complex problem requiring massive dedication 
of technical ingenuity to correct. Although the opponents of this 
legislation would like the country to think the solution is simple and 
could have and should have been fixed a long time before now, it is not 
so simple.
  Businesses in every industry will spend hundreds of billions of 
dollars to correct the problem. Estimates are that the costs in the 
United States alone will be between $100 and $200 BILLION--without 
litigation costs. There will undoubtedly be shifts of costs from one 
business to another, from one industry to another, from consumer to 
manufacturer, as the ramifications of the problem are better known. The 
purpose of this legislation is to provide rules and mechanisms for this 
process of cost shifting; rather than focusing on blame, to focus on 
solutions, prevention and remediation of real problems, rather than 
anticipated or perceived problems.
  Let me review some of the most important aspects of S. 96:
  First, I want to emphasize that this legislation does not affect 
personal injury cases. We have done nothing to alter the current law 
regarding how personal injury or wrongful death claims would be 
handled.
  Second, let me state clearly that this legislation sunsets. It 
applies only to problems that occur within 3 years. This legislation 
will not change American law for all time.
  The notice provisions provide time for the potential plaintiffs and 
defendants to resolve Y2K problems without litigation. The notice 
period is 30 days. Only if the defendant responds by fixing the problem 
is another 60 days provided to allow remediation to be completed. If 
there is no response, or if the defendant declines to fix the problem, 
the plaintiff can sue on the 31st day. The emphasis here is on 
providing notice that there is a problem so that it can be fixed. Most 
people want their equipment to work--they don't want a lawsuit. This 
provision ensures that the first order of business is to offer an 
opportunity to fix the problem. In no way does this provision deny 
someone's right to sue. Instead, it should speed up resolution of 
problems.
  A requirement for pleading material injury ensures that the cases 
which are litigated are those in which there is real injury. This 
section will not cause problems for consumers or businesses with actual 
Y2K-related failures. It will cause a problem for plaintiffs solicited 
for class actions where no injury has occurred, as in the increasingly 
famous California case brought by Tom Johnson.
  To remind my colleagues, that is the case brought against six 
retailers in California, not to remedy any failure or injury, but to 
disgorge profits made over the past 5 years from selling unspecified 
products which may or may not be Y2K compliant. The clear intent of 
this litigation is a large settlement. That kind of profiteering 
litigation is the kind of litigation which S. 96 seeks to curb. Our 
judicial system should not be clogged with possible Y2K failures, nor 
novel complaints to ensure the payment of lottery-type settlements and 
attorneys' fees.
  The economic loss rule further ensures that contract actions will not 
be ``tortified.'' Why is this important? Historically contract actions 
have provided as remedy the ``benefit of the bargain,'' but not 
punitive damages. The ``benefit of the bargain'' may include lost 
profits or similar compensatory damages to ensure that the plaintiff is 
made whole. By turning contract actions into tort actions, aggressive 
attorneys can claim the more lucrative punitive damages which are not 
compensatory in nature and allow a windfall from which to pay 
attorneys' fees.
  However, banning the ``tortification'' of contracts does not leave a 
consumer without remedies for real problems. Principles of contract law 
govern many situations where only a verbal contract, not a written 
contract, exists. Additionally, the legislation does not affect rights 
under State Uniform Commercial Code and consumer protection laws.
  Punitive damage awards have been limited for small businesses, but 
not for large businesses, in recognition that small companies are 
especially vulnerable to an onslaught of litigation. No caps are 
applicable, however, if the defendant has intentionally caused injury, 
since such conduct is egregious and should not be protected. These 
modest limitations also prevent frivolous lawsuits. This is especially 
reasonable here where we have eliminated personal injury claims, thus 
the damages suffered are all economic in nature.
  We have preserved contracts as written to ensure that preexisting 
contractual relationships are maintained. The parties will receive the 
full benefit of their bargain. When the terms of a contract are in 
conflict with this legislation, the contract prevails. There is no 
reason for attorneys to say, as some trial lawyers have, that the 
legislation would alter a businessman's right to sue a vendor who does 
not perform a contract because of a Y2K failure. He can. But the 
legislation provides a notice period in which the vendor can, and 
should, remedy the problem without the time and expense of litigation.
  A critical provision of the legislation provides that where 
litigation is necessary, the defendants will pay for their 
proportionate share of the damage. This is fair. A defendant pays for 
the damage he caused. It also eliminates the incentive to sue the 
``deep pockets'' who may not be primarily responsible for the problem. 
Exceptions are provided for small plaintiffs who should not be at risk 
for collecting a damage award, and for situations where a defendant, 
because of particularly egregious behavior, should bear the burden of 
collecting from other defendants.
  Those who oppose the bill have alleged that these provisions will 
actually deter responsible companies from taking necessary action to 
prevent Y2K failures. The facts do not support this claim. All one has 
to do is take a quick look at the year 2000 related Internet links to 
see that massive efforts are already being made to make information 
about Y2K problems and solutions available.
  A recent EDS, Electronic Data Systems, ad highlights its free of 
charge, on-line data base that lists over 230,000 products from more 
than 5,000 vendors, with links to the vendors, instructions for making 
products Y2K compliant, and links to other related sites. The ad claims 
that the site receives 56,000 hits a day.
  Both the EDS site and other sites provide step-by-step checklists and 
resource information for solutions. Why is this information being made 
available? Because the United States is the

[[Page 12743]]

world's leader in technology. One of the reasons for the high-tech 
industry's success is that it has responded well to the marketplace. 
Preventing Y2K problems, letting other businesses and industries know 
about the problem and how to solve it, make good business sense.
  If so much work is going into solving the Y2K problem then why do we 
need this legislation?
  As I have stated before, the cost of solving the Y2K problem is 
staggering. Experts have estimated that the businesses in the United 
States alone will spend $50 billion in fixing affected computers, 
products and systems. But what experts have also concluded is that the 
real problems and costs associated with Y2K may not be the January 1 
failures, but the lawsuits filed to create problems where none exist. 
An article in USA Today on April 28 by Kevin Maney sums it up:

       . . . Experts have increasingly been saying the Y2K problem 
     won't be so bad, at least relative to the catastrophe once 
     predicted. Companies and governments have worked hard to fix 
     the bug. Y2K-related breakdowns expected by now have been 
     mild to nonexistent. For the lawyers, this could be like 
     training for the Olympics, then having the games called off.
       . . . The concern, though, is that this species of Y2K 
     lawyer has proliferated, and now it's got to eat something. 
     If there aren't enough legitimate cases to go around, they 
     may dig their teeth into anything. . . . In other words, 
     lawyers might make sure Y2K is really bad, even if it's not.

  The sad truth is that litigation has become an industry. While many 
fine attorneys represent their clients ethically and in a scrupulous 
manner, litigation has become big business for a segment of the trial 
bar.
  A panel of experts predicted at an American Bar Association 
convention last August that the legal costs associated with Y2K will 
exceed that of asbestos, breast implants and tobacco and Superfund 
combined. A reported 500 law firms across the country have put together 
Y2K litigation teams.
  As we have already seen in the Tom Johnson case in California, where 
no real injury or damage exists, novel theories are pursued to divert 
attention from prevention and remediation to defending litigation. Time 
and resources that could be spent on improving technology are diverted 
to litigation and settlement costs and attorneys' fees.
  During a hearing on this legislation in the Commerce Committee 
testimony was presented from two small businessmen who were concerned, 
legitimately, about problems they had faced with Y2K failures, or 
anticipated failures. The esteemed Ranking Member of the Committee has 
often mentioned their testimony on the floor. Both expressed concern 
that they would be prevented by this legislation from bringing suit, or 
from being compensated for their damages. In both instances, not only 
would this legislation not elimate their right to sue, it might help 
prevent the need to sue. The notice provisions and remediation period 
would assure prompt attention and resolution to their complaints.
  We cannot lose sight of the bigger picture in terms of cost of 
litigation. The costs of both bringing and defending lawsuits are 
passed on by the businesses and industries into higher prices and 
cutbacks in jobs or new orders. The impact on our economy of an 
avalanche of frivolous lawsuits will be felt by all of us. If we do not 
curtail litigation costs, we will all pay a price in higher prices for 
computer and software goods, higher prices for every other retail good 
with embedded chips, higher prices for insurance, and slower, more 
expensive increases in technological advances. Money that is spent on 
litigation is money that is not spent on creating new jobs, providing 
better incomes, retaining our nation's competitive edge.
  Mr. President, in closing, let me urge my colleagues to support this 
legislation. It is bipartisan, and again I want to thank Senators Wyden 
and Dodd for all they have done to make it so. It is reasonable and 
practical. It presents a good balance between the interests of 
plaintiffs and defendants and will prevent needless and costly 
litigation. It will assist in preserving the best economy our country 
has ever enjoyed. I will encourage the continued prosperity and 
leadership of our nations' technology industries as we enter the new 
millennium. It will prevent our nation's courts from being clogged for 
years with litigation that offers no one prosperity except for the 
lawyers. The emphasis in approaching the Y2K problem must be on 
prevention, remediation and prompt resolution of Y2K problems. This 
legislation meets those goals.
  The coalition of support for this bill is compelling. This 
legislation is important not only to big business and high tech, but to 
small businesses, retailers, wholesalers, insurance, consultants--
virtually every segment of the business community.
  Time is of the essence. For this legislation to provide the direction 
and impetus desired to assure prevention and remediation of Y2K 
problems, it must be passed now. We have spent several months getting 
to this point. Let me be clear. This legislation will make a 
difference. If we don't pass it, we will be failing to provide 
leadership for our country. I fear that a year from now we will again 
turn to this issue, but only after an avalanche of lawsuits has stymied 
the economy. Support this legislation and be part of the Y2K solution.
  I again thank Senators Dodd and Wyden and many others for all of 
their efforts. I also want to congratulate Senator Hollings, my friend 
from South Carolina, for an impassioned and very compelling argument in 
opposition to this legislation. I have always enjoyed debating him on a 
variety of issues, and I know no one who is better informed.
  I reserve the remainder of my time.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from South 
Carolina.
  Mr. HOLLINGS. I thank the Chair, and I thank the distinguished 
chairman of the committee.
  He and I work very closely together. The chairman of our committee 
has gained a reputation against charades and frauds and make-believes 
and pork and all these things. That is why it doesn't please this 
particular Senator that he would take this one on.
  The truth of the matter is that, generally speaking, it is a 
nonproblem. If there is a problem, the best of the best, Intel, has a 
web page we lifted just yesterday afternoon entitled ``Updating Your 
Components, Updating Your PC Hardware.''
  ``If you have determined that your PC hardware is not capable of 
handling the century rollover''--so forth and so on, about how to 
manually reset and install a BIOS upgrade or patch, if available.

       1. Manually reset the date after December 31, 1999, the 
     first time you turn on your PC or laptop after December 31, 
     1999, and before you use any software applications, simply 
     reset the operating system date on the computer. For nearly 
     all PCs and laptops, this is the easiest and safest way to 
     ensure the computer will handle dates properly in the year 
     2000. Once reset, the PC hardware clock will maintain the 
     correct date when powered off and on or rebooted.
       2. Install a BIOS upgrade or ``patch,'' if available if you 
     wish to ensure that your PC hardware is capable before the 
     new millennium begins. You may want to install a BIOS upgrade 
     or software ``patch'' before the end of 1999. Some PC 
     hardware manufacturers and BIOS and software vendors are 
     offering free BIOS upgrades.

  I was wondering, Mr. President, about the time, the minimum amount of 
time, as I understand, and the cost.
  I lifted, again, in searching back in 1998, an article entitled, 
``Tool fixes PC Y2K glitch,'' priced at $94.95.
  We are hearing millions and billions and everything else, Chick 
Little, the sky is falling.

       A lot of people still don't seem to realize that even 
     though they purchase their PC in 1998, it doesn't mean that 
     the system is compliant. There are still PCs out there that 
     are not fully compliant. Tools like the [PCfix2000] provide 
     users with a solution for addressing this.

  Then they go on to describe this $94.95 fix.
  I noticed in the month of March, on March 10 of this year:

       The easiest way to prepare your PCs for the new millennium 
     is with Y2K diagnostic software. We chose five sub-$50 
     programs that both check your computer for year 2000

[[Page 12744]]

     compliance and solve any problems they find: Check 2000 PC 
     Deluxe, IntelliFix 2000, Know2000, Norton 2000, and 2000 
     Toolbox. We scrutinized each program and, finally, chose a 
     winner. (Mac owners: Your machines are, and always have been, 
     free of the Y2K bug.)

  That interested me, because we only just last week had Michael Dell 
of Dell Computers, the largest producers of computers in the United 
States, and he had advertised with the Securities and Exchange 
Commission that all Dell computers were Y2K compliant.
  I ask unanimous consent, once again, to print this March issue of 
Business Week in the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

                   [From Business Week, Mar. 1, 1999]

                      Be Bug-Free or Get Squashed

      (By Marcia Stepanek, Ann Therese Palmer, and Michael Shari)

       Lloyd Davis is feeling squeezed. In 1998, his $2 million, 
     25-employee fertilizer-equipment business was buffeted by the 
     harsh winds that swept the farm economy. This year, his 
     Golden Plains Agricultural Technologies Inc. in Colby, Kan., 
     is getting slammed by Y2K. Davis needs $71,000 to make his 
     computer systems bug-free by Jan. 1. But he has been able to 
     rustle up only $39,000. His bank has denied him a loan 
     because--ironically--he's not Y2K-ready. But Davis knows he 
     must make the fixes or lose business. ``Our big customers 
     aren't going to wait much longer,'' he frets.
       Golden Plains and thousands of other small businesses are 
     getting a dire ultimatum from the big corporations they sell 
     to: Get ready for Y2K, or get lost. Multinationals such as 
     General Motors, McDonald's, Nike, and Deere are making the 
     first quarter--or the second at the latest--the deadline for 
     partners and vendors to prove they're bug-free. A recent 
     survey by consultants Cap Gemini America says 69% of the 
     2,000 largest companies will stop doing business with 
     companies that can't pass muster. The National Federation of 
     Independent Business figures more than 1 million companies 
     with 100 workers or less won't make the cut and as many as 
     half could lose big chunks of business or even fail.


                               weak links

       Cutting thousands of companies out of the supply chain 
     might strain supply lines and could even crimp output. But 
     most CEOs figure it'll be cheaper in the long run to avoid 
     bugs in the first place.
       Some small outfits are already losing key customers. In the 
     past year, Prudential Insurance Co. has cut nine suppliers 
     from its ``critical'' list of more than 3,000 core vendors, 
     and it continues to look for weak links, says Irene Dec, 
     vice-president for information systems at the company. At 
     Citibank, says Vice-President Ravi Apte, ``cuts have already 
     been made.''
       Suppliers around the world are feeling the pinch. Nike Inc. 
     has warned its Hong Kong vendors that they must prove the're 
     Y2K ready by Apr. 1. In India, Kishore Padmanabhan, vice-
     president of Bombay's Tata Consultancy Services, says repairs 
     are running 6 to 12 months behind. In Japan, ``small firms 
     are having a tough time making fixes and are likely to be the 
     main source of any Y2K problems,'' says Akira Ogata, general 
     research manager for Japan Information Service Users Assn. 
     Foreign companies operating in emerging economies such as 
     China, Malaysia, and Russia are particularly hard-pressed to 
     make Y2K fixes. In Indonesia, where the currency has 
     plummeted to 27% of its 1977 value, many companies still 
     don't consider Y2K a priority.
       A December, 1998 World Bank survey shows that only 54 of 
     139 developing countries have begun planning for Y2K. Of 
     those, 21 are taking steps to fix problems, but 33 have yet 
     to take action. Indeed, the Global 2000 Coordinating Group, 
     an international group of more than 230 institutions in 46 
     countries, has reconsidered its December, 1998 promise to the 
     U.N. to publish its country-by-country Y2K-readiness ratings. 
     The problem: A peek at the preliminary list has convinced 
     some group members that its release could cause massive 
     capital flight from some developing countries.
       Big U.S. companies are not sugarcoating the problem. 
     According to Sun Microsystems CEO Scott G. McNealy, Asia is 
     ``anywhere from 6 to 24 months behind'' in fixing the Y2K 
     problem--one he says could lead to shortages of core 
     computers and disk drives early next year. Unresolved, says 
     Guy Rabbat, corporate vice-president for Y2K at Solectron 
     Corp. in San Jose, Calif., the problem could lead to price 
     hikes and costly delivery delays.
       Thanks to federal legislation passed last fall allowing 
     companies to share Y2K data to speed fixes, Sun and other 
     tech companies, including Cisco Systems, Dell Computer, 
     Hewlett-Packard, IBM, Intel, and Motorola, are teaming up to 
     put pressure on the suppliers they judge to be least Y2K-
     ready. Their new High-Technology Consortium on Year 2000 and 
     Beyond is building a private database of suppliers of 
     everything from disk drives to computer-mouse housings. He 
     says the group will offer technical help to laggard firms--
     partly to show good faith if the industry is challenged later 
     in court. But ``if a vendor's not up to speed by April or 
     May,'' Rabbat says, ``it's serious crunch time.''


                                warnings

       Other industries are following suit. Through the Automotive 
     Industry Action Group, GM and other carmakers have set Mar. 
     31 deadlines for vendors to become Y2K-compliant. In March, 
     members of the Grocery Manufacturers of America will meet 
     with their counterparts from the Food Marketing Institute to 
     launch similar efforts. Other companies are sending a warning 
     to laggards--and shifting business to the tech-savvy. ``Y2K 
     can be a great opportunity to clean up and modernize the 
     supply chain,'' says Roland S. Boreham, Jr., chairman of the 
     board of Baldor Electric Co. in Fort Smith, Ark.
       In Washington, Senators Christopher S. Bond (R-Mo.) and 
     Robert F. Bennett (R-Utah) have introduced separate bills to 
     make it easier for small companies like Davis' to get loans 
     and stay in business. And the World Bank has shelled out $72 
     million in loans and grants to Y2K-stressed nations, 
     including Argentina and Sri Lanka. But it may be too little 
     too late: AT&T alone has spent $900 million fixing its 
     systems.
       Davis, for one, is not ready to quit. ``I've survived 
     tornadoes, windstorms, and drought,'' he says. ``We'll be 
     damaged, yes, but we'll survive.'' Sadly, not everyone will 
     be able to make that claim.

         WHY BIG BUSINESS MAY HAVE A SMALL-BUSINESS Y2K PROBLEM
               [A January survey of small-business owners]
------------------------------------------------------------------------
                                                                 Percent
------------------------------------------------------------------------
Aware of the Y2K problem......................................        55
Are taking action to fix it...................................        38
Plan to take action but haven't yet...........................        19
No action taken and none planned..............................        18
------------------------------------------------------------------------
Data: National Federation of Independent Business.

  Mr. HOLLINGS. It is very short.

       Multinationals such as General Motors, MacDonald's, Nike, 
     and Deere, are making the first quarter--or the second at the 
     latest--the deadline for partners and vendors to prove 
     they're bug free. A recent survey by consultants Cap Gemini 
     America says that 69% of the 2,000 largest companies will 
     stop doing business with companies that can't pass muster. 
     The National Federation of Independent Business figures more 
     than 1 million companies with 100 workers or less won't make 
     the cut and as many as half could lose big chunks of business 
     or even fail.
       Some small outfits are already losing key customers. In the 
     past year, Prudential Insurance has cut 9 suppliers from its 
     critical list of 3,000 core vendors.

  Citibank has already cut. Cuts have already been made.
  I read further down:

       If a vendor is not up to speed by April or May, it is a 
     serious crunch problem. Through the Automotive Industry 
     Action Group, General Motors and other car makers have set a 
     March 31 deadline for vendors to become Y2K compliant. In 
     March, members of the Grocery Manufacturers of America will 
     meet with their counterparts from food marketing to launch 
     similar efforts. Other companies are sending a warning to 
     laggards and shifting business to the tech-savvy.

  Now I quote:

       ``Y2K can be a great opportunity to clean up and modernize 
     the supply chain,'' says Ronald S. Boreham, Jr., chairman of 
     the board of Baldor Electric Co. in Fort Smith, Ark.
       The World Bank shelled out millions in loans and grants to 
     Y2K-stressed nations.

  On and on, Mr. President. Here is another article that the banks now, 
by June 30, will have all of their Y2K customers and everything else 
compliant, or they will have cancellations.
  Otherwise, Paul Gillin said in Computer World earlier this year:

       Vendors have had plenty of time to prepare for 2000. The 
     fact that some were more preoccupied with quarterly earnings 
     and stock options than in protecting their customers is no 
     excuse for giving them a get-out-of-jail-free card now.

  That is what Computer World has called the Y2K bill, I say to the 
distinguished Senator from Arizona--a get-out-of-jail-free card--which 
is why I am surprised by my colleague, because he is usually on the 
other side. I quote again from Computer World:

       The problem belongs--hook, line, and sinker--to the vendors 
     that capriciously ignored warnings from as long ago as the 
     late `70s. . . . It has been five years since year 2000 
     awareness washed over the computer industry [and everyone 
     should now be compliant].

  I was interested that Boeing, for example--and the Senator from 
Washington was here debating it--started

[[Page 12745]]

back in 1993. Everyone has done that. This is a political fix--and I 
will get to that in just a little while. I want to just bring you 
really up to date with respect to the number of cases.
  We had a witness, Ronald Weikers, who has written Litigating Year 
2000 Cases, published by the West Group. I can tell you, the West Group 
is not going to publish anything partisan. They have a wonderful 
reputation for objectivity and reliability of their reports. He says:

       I frequently write and speak about the subject. I do not 
     represent any clients that have any interest in the passage 
     or defeat of any proposed Y2K legislation.

  Then he goes on to state:

       Thirteen of the 44 Y2K lawsuits that have been filed to 
     date have been dismissed almost entirely.

  I brought that 44 figure up to date because that was the end of 
April, just a little over a month and a half ago. It is now 50 cases. 
Twelve cases have been settled for moderate sums of money, or no money. 
The legal system is weeding out frivolous claims. They act as if the 
courts just love to see a frivolous claim come into the court that 
doesn't have any substance. All you have to do is get 12 people and, 
whoopee, you've got money. You race to the courthouse, see the 12 
people, and you get your money. It is a total fanciful picture that is 
being painted with respect to this legislation.

       The legal system is weeding out frivolous claims and Y2K 
     legislation is therefore unnecessary.

  So says, of course, the Washington Post; they editorialized. We 
included that particular item in the Record, with others.
  The most recent one is by Institutional Investor, a magazine from 
Wall Street. They had a survey taken, and this was just this month:

       Do you feel your company's internal computer systems are 
     prepared to make the year 2000 transition without problems?

  Mr. President, 88.1 percent said yes; 6 percent said no. Here we are, 
5 and a half months, and now the bill. This is a wonderful problem 
here, and we have to give it time. In January, under the McCain bill, 
you get 3 months. I am giving them 5 and a half months, the operation, 
right now, to that 6 percent. Get with it.

       Have you done a dry run of your computer problems for the 
     year 2000 transition?

  Twelve percent said no problems. Few problems: 86.4 percent.
  Then they asked:

       Do you expect Y2K transition problems to have a material 
     impact on your company's business or financial performance 
     next year?

  Three point six percent, and we have this wonderful Federal 
legislation. Of course, States haven't asked for that. No attorney 
general has ever come up here. In fact, the Conference of State 
Legislatures has resolved against this political fix. That is all it 
is, political. We will get to that in just a few minutes.
  Only 3.6 percent said yes; 89.2 percent said no. And then 95.2 
percent say they have worked with their suppliers and cleaned up the 
problem.
  So here we are in June, 5 and a half months ahead of time, and we 
still are insisting, if you please, on the Y2K fix.
  Let me divert for a second and get right into the matter of safety. I 
know it is difficult with the matter of gun violence in the schools, 
and everything else, for us politicians to think in terms of a safe 
America. But that is the fact. We have the safest society with respect 
to product liability. That is what this is about, the Y2K problem with 
your computer, a product liability.
  Since 1963 in the McPherson case, under the common law, when the 
courts came in and enunciated the doctrine of strict liability, the 
State legislatures thereupon have followed suit, enunciating strict 
liability, joint and several liability, all over the land. When you buy 
a product, it is not caveat emptor, the buyer beware, but caveat 
venditor, the seller beware. They have to be responsible right down the 
line, because the proponents of this bill said they are going to go way 
down and find somebody with fat pockets, or high pockets.
  That is total nonsense. I have a glitch on my computer now, and I 
know they are like fleas on a dog, and they are all rich; it is the 
richest crowd the world has ever produced, way better than any oil 
millionaires. I know they have deep pockets, but I am not racing to the 
courthouse. I told my secretary to get this blooming thing fixed. I 
have no time to run around to the courthouse. If I went to the 
courthouse at 12 noon, it would take until the year 2000 to get into 
the courthouse. File your pleadings and see how it happens.
  The total unreality of the picture described here for the need of 
this particular legislation--it has worked and, yes, and the Europeans 
are following us, incidentally. I have the record here where they are 
coming along with strict liability and joint and several liability. I 
only mention that because they come in and say we are losing business 
to the Europeans. The Europeans are following America. We are setting 
the example for safe products in America.
  The conference board has found that. The Rand study has found that. I 
could go to various others--232 risk managers; the conference board 
reports that the companies responded to product liability by ``making 
their products safer.'' So we know the effect it has had.
  But to emphasize it, yes. Mothers Against Drunk Drivers has done a 
wonderful job with respect to consumers demanding a safe product, 
checking it out and understanding it--and various other things. The 
National Safety Transportation Board has come forth with various 
regulations, but it is really all prompted, if you please, I say to the 
Senator from Utah, by the trial lawyers. This town loves lawyers. That 
is all about lawyers. There are 60,000 of them. This town just loves 
lawyers. There are 60,000 to fix you and to fix me--not to get to the 
court. The lawyers are racing to the court around this place. I can 
tell you. I have been here 32 years now, and I know them. They are 
delightful folks. They are highly intelligent. I enjoy them. But one 
thing is that they have started advertising against working lawyers and 
the trial lawyers.
  The lawyer that has to come in, if you please, and when he has a 
client that comes to him, he says first I have got to investigate and 
make sure the facts are as you say they are and you have been wronged. 
He has to pay for all the expenses of that investigation--the 
interrogatories, the discoveries, having to file the different 
pleadings, the trial of the case itself, and on appeal taking care of 
the briefs on appeal, the costs thereof, making of appeal and waiting 
for the court. And all along that so-called talented trial lawyer is 
rushing to the courtroom. He has to get all 12 jurors--not 11 but all 
12 jurors. He has to get a majority opinion from the court. Then he 
gets his 20 percent or 30 percent, and these Senators run all around 
and saying they have a lottery, and ``strike it rich,'' and some kind 
of atmosphere.
  The consumer has never been mentioned here. That is what trial 
lawyers represent. They do not represent themselves. They represent a 
wronged consumer. Ask the Consumer Federation of America. Ask Public 
Citizen. Ask anybody who represents consumers if they thought that this 
bill was appropriate. They are absolutely opposed to it, but we have 
them. They have been very clever in the way that they have postured 
this particular measure. It isn't about consumers. It isn't about 
wrongdoing. It isn't about need.
  This is a measure--sooey, pig. All you computer folks come into 
town--you millionaires--falling over each other. Billionaires, excuse 
me. I don't mean to hurt their feelings. Billionaires are falling over 
each other because we are going to fix it for you, which reminds me; 
that is some crowd, isn't it? That is some crowd. They are highly 
intelligent. Bless their success, but that is the crowd now that wants 
estate tax cuts. That is the crowd that wants capital gains tax cuts. 
That is the crowd that wants no tax on the Internet. What Wal-Mart has 
started cleaning up is Main Street. Now we are going to clean up the 
rest of it, because Main Street in the States and the municipalities is 
not going to be able to tax businesses as normal businesses on

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Main Street. In fact, the merchant on Main Street will say: Tell me. 
Yes. You want siding 42 feet long. That is fine. Let me order it. I 
will have it delivered tomorrow. I will order it on the Internet, and 
you won't have to pay the 8 percent sales tax.
  There is the agent sitting up there in a little cubicle on Main 
Street, and all we have is the wig shops run up and down Main Street of 
America.
  But that is the crowd that says get rid of the immigration laws. They 
have been spoiled. They have been told that money can buy anything. Get 
rid of the estate taxes, capital gains taxes, the immigration laws, and 
now get rid of the liability laws--200 years of State liability laws 
for wrongdoers--and instead they are saying the wronged injured party 
now has to pay for the misdeeds of the wrongdoer.
  I go back to placing emphasis on the point: I want to join on the 
issue about these lawyers. It was Mark Robinson back in the 1970s who 
brought the Pinto case wherein the gasoline tank exploded. It was 
negligently and willfully proved that they knew it was unsafe, but they 
figured that the extra little cost from a market cost-benefit analysis 
that they weren't going to put in the safe gas tank.
  He got a verdict in that death case of $3\1/2\ million and $125 
million punitive damages 20 years ago. He collected zero of his 
punitive damages. He never got a red cent. But pick up the morning 
paper or yesterday's paper, pick up any news edition and you will find 
recalls.
  I went to the National Transportation Safety Board. As of 1994--in 
the last 4 years--there have been 73 million recalls on account of the 
Pinto case, on account of trial lawyers. You break that down to $1.8 
million, or $18 million each year, $50,000 a day, and 5 percent of the 
$50,000 would be death, the other 95 percent in injury, and Mark 
Robinson saved 2,500 people from being killed as of today. He ought to 
be proud of it. Every trial lawyer who works that hard knows he is 
taking a risk, and he has to convince by the greater weight of the 
preponderance of evidence all 12 jurors. He has to be studied and 
careful and legally sound and prevail on appeal. He is taking care of 
all the costs, and out of it the average American gets a good lawyer. 
They do not like good lawyers. They like office lawyers that fix you 
and me. They don't like working lawyers.
  So all of us, this thing about running to the courthouse, race to the 
courthouse, and everything else, we put it to bed.
  Under our system, torts have been relegated to the States. I would 
think the contract crowd would understand that. If I remember it, they 
came to town in 1995 and said the best government is the least 
government; the best government is closest to the people--the 10th 
amendment, the rights of the States. Even then the first thing they 
passed was to make sure the States were made whole. What did they call 
that thing? Unfunded mandates. That was it. Yes. Unfunded mandates. 
They wanted to make sure they would take care of the State communities. 
The States have been administering. They have been doing it on Y2K. 
Everyone is taking up the Y2K. They don't live in an isolation booth. 
The people are close to their government at the local level, and all of 
them have been hearing about this particular problem. It has been 
advertised.
  Incidentally, my distinguished friends, the Senator from Utah, Mr. 
Bennett, and the Senator from Connecticut, Mr. Dodd, have performed 
yeomen service in bringing attention to this particular problem. But 
the States have been administering this, whereby you have to be a 
accountable for your wrongful acts. Having done so, we have a safe 
America with the States having administered properly their product 
liability law. They have refused every time--and this has been going on 
for 20 years--to get the Federals to come in.
  Here were the States asking not to do it. No State attorney general 
has come up and asked for it. No State Governor has said it is 
inadequate, and we need a Federal statute. Here they want to do away 
with 200 years of liability law at the State level. Why? Why? Why? Why? 
Why? Look here. All we have to do is get yesterday's New York Times, 
June 14. On the front, left-hand column, ``Congress Chasing Campaign 
Donors Early and Often.'' The money chase. If you have any doubt about 
that, just the day before, on Sunday in the Washington Post, a two-
column story appears on two pages, ``GOP Vies for Backing of High-Tech 
Leaders.'' ``Party aims to exploit Y2K vote at CEO summit.''
  That is why they have all of them in town. This is a disgrace. This 
crowd has gone so political about message, message, message, they got 
the message together, but they say: Now, wait a minute. Senator McCain 
and Senator Hollings were ready for a final vote at 12:30 last 
Thursday, but we have to wait 5 days because you have to have a message 
but you have to have it timely.
  Guess who is in town this afternoon when we vote. Bill Gates of 
Microsoft. You want me to call the roll? Want to hear a bird call? Here 
we go.
  John Warnock of Adobe system, Carol Bartz of Autodesk, Greg Bentley 
of Bentley Systems, Michael Cowpland of Corel Corporation, Dominique 
Goupil of FileMaker, Bill Harris of Intuit, Jeff Papows of Lotus 
Development, Bill Gates of Microsoft, William Larson of Network 
Associates, Eric Schmidt of Novell, John Chen of Sybase, John Thompson 
of Symantec Corporation, and Jeremy Jaech of Visio Corporation.
  Of course, we have some that we could not get to meet with us, I 
guess--like Netscape.
  I saw Barksdale on TV, and I saw the head of IBM, Gerstner. They were 
on my morning TV. They are all in town.
  I thought this was the most amusing thing I had ever seen. I lifted 
this--I had to scroll it down word for word. Turn on channel 2, the TV 
here, which is the Republican screen of what is going on. I read it 
word for word: Senate again attempts to end minority stranglehold--the 
great Y2K money chase.
  That is the first time an outreach, bag in hand, has ever been called 
a ``stranglehold.'' We have been begging, trying to get a little bit of 
the crumbs from Silicon Valley. We have to run, too. We have never been 
against technology. I am the author of the Advanced Technology Program. 
I am the author of the Manufacturers Extension Partnership Program. It 
all works. It was supported by the electronics industry, the technology 
industry. It is working extremely well. We are trying to expand it.
  I would love to get Mr. Gates and Microsoft to South Carolina. I 
don't speak in a disparaging way. I speak in an adoring way. But don't 
come here with the screen about stranglehold.
  We have the Federal Election Campaign Commission. Last year, 
according to their records:
  Intel, Andy Grove, hard money, the Democrats got $16,000; the 
Republicans got $64,000.
  Microsoft, the Democrats got $71,000, and the Republicans got 
$143,000.
  Soft money, Microsoft, the Democrats got $135,000; the Republicans 
got $629,000.
  This is usually a performance of my distinguished chairman from 
Arizona, because I have heard him and he is very effective. I am just 
shocked he is not doing this and I am forced to do it.
  I could go down the list here. Computer Services Corporation, the 
Democrats, $25,000; the Republicans, $53,000.
  Microtech, Democrats, soft money, zero; Republicans, $16,000.
  Advanced Micro Devices, soft money, the Democrats got $1,000; the 
Republicans, $95,000.
  I have the list. You can go over there.
  Stranglehold? Come on, give me a break.
  Here is what they are doing. They come here. We all have to run. So 
we create a problem. We raise a straw man of trial lawyers. We don't 
talk about consumers. We don't talk about the wrongdoing. We don't talk 
about trial lawyers representing wrongdoers. They are not just running 
around with frivolous cases. That is an imaginary thing that could be 
brought at the political level but not at our level, I can tell you 
that. Trial lawyers worth their salt are not fooling around. They have 
to make

[[Page 12747]]

a living. They don't run up and down and ruin their reputation. You 
know they are not getting anywhere. The courts take care of the 
frivolous charges. They raise that thing and they are saying: Here is 
what we are going to do; we are going to get rid of the lawyer.
  It was very obvious in the debate how they are going to get rid of 
the lawyer. They said get rid of economic damages. If you come in with 
a $10,000 or $20,000 computer and that is all you are limited to, that 
is all you can recover.
  What I have just described--for the investigation, the pleadings, the 
interrogatories, the depositions, the trial, the appeal, the cost, the 
time--as a lawyer, I would tell my secretary up front, if they come in, 
tell them those are very complicated cases and there are a lot of legal 
loopholes to go through and delays, and we are just not in a position 
to handle those cases.
  That is the way to get rid of the lawyer. They know exactly what they 
are doing.
  When Senator Edwards of North Carolina came up and said, wait a 
minute, you can't do that, the Senator from Oregon said, we will give 
you exactly whatever the contract. You don't contract for torts. You 
don't say, we are going to contract for the wrongdoing; the contract is 
complied with.
  If they defraud you, if they engage in wrongdoing, while the computer 
is down you are losing your customers to your competition, you are 
losing your business, you may have to let go of some of your good 
employees to tide yourself over.
  All the time that business has to wait--and a small business at 
that--I can tell you right now, there will be serious economic damages.
  If there is any doubt about it--because that is what small business 
wants. They don't want a law case; they want it fixed--up comes the 
Senator from California, Senator Boxer. She said: Don't give us trials, 
don't give us lawyers; just get a fix.
  They denied that in an up-and-down vote. They said instead of fixing 
the computer, we are going to fix the lawyers; we are going to fix the 
system.
  Just like any car dealer who comes around, what we are going to do is 
take your junk off the shelves and sell it; don't worry about it, 
because the law will protect you for 3 years. You can get rid of all 
your old models. Don't worry about it. Get rid of the junk. We will 
repeal the liability bill. We will say that fraud pays for the first 
time in America.
  No one is going to get these cases. That is what they will do. I can 
see exactly what was happening with that particular witness from New 
Jersey who came before the committee. He bought an update that was 
represented to last for 10 years. Within a year he found out it wasn't 
Y2K compliant. He paid $13,000. He called them twice and nothing ever 
happened. He wrote a letter. They finally came back and said they would 
make it Y2K compliant, for $25,000. That was after he got a lawyer and 
it went on the Internet and some 17,000 similarly situated people 
filed, and that particular manufacturer, supplier, came back and said 
they would fix it for nothing and pay legal fees.
  You can see the game that business will play on a cost-benefit basis. 
We live in a rough world, but we have a responsibility in American 
society. It is done well at the State level and has worked well at the 
State level. No State has asked for this particular measure. Instead, 
the Association of State Legislatures has resolved against the Federal 
Y2K bill.
  But they have the audacity to come up here and raise a straw man of 
lawyers running to the courthouse, in a litigious society and all of 
that nonsense, 5\1/2\ months ahead of time, and insisting on passing 
this particular measure, and insisting on the time of its passage is 
when the computer folks are in town so they will know who delivered the 
goods.
  I yield the floor, and I reserve the remainder of my time.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Mr. President, I yield 10 minutes to the Senator from 
Utah, followed by 10 minutes to the Senator from Connecticut, if that 
is agreeable to the distinguished Senator from South Carolina.
  Mr. HOLLINGS. Yes, it is.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. Mr. President, I have enjoyed the remarks of my colleague, 
my dear friend. In this body, he is certainly a champion for the trial 
lawyers, and certainly I have been as well. I intend to continue to 
stand up for trial lawyers, who do a great job for consumers in this 
country, but we are talking about a little bit of a different problem.
  Mr. President, I rise to express my support for the final passage of 
S. 96, the Y2K Act, as modified by S. 1138, the bipartisan Dodd-McCain-
Hatch-Feinstein-Wyden-Gorton-Lieberman-Bennett amendment. This bill 
effectively addresses the very serious problems associated with the Y2K 
computer problem.
  As you know, Mr. President, what is now known as the Y2K problem 
arises from the inability of computers to correctly process the date 
after December 31, 1999. When January 1, 2000 arrives, the computers 
that cannot process that date will have a variety of problems, ranging 
from very mild glitches to severe breakdowns. In the technologically 
dependent world we live in, this creates obvious problems for both 
individuals and for any business that relies on computer technology at 
any point in its business.
  As a result of this problem, we face the threat of an avalanche of 
Y2K-related lawsuits that will be filed on or about January 3, 2000. 
Such an unprecedented wave of litigation will overwhelm the computer 
industry's ability to correct the problem. As I have said before, this 
super-litigation threat is real, and the consequences for America could 
be disastrous. Already, there have been more than 66 lawsuits, 
including 31 class actions, filed based on the Y2K problem. These suits 
are the beginning of a tsunami of litigation that could drown America.
  As a Senator from the State of Utah, I am extremely aware of the 
impact this problem will have on the economy of the United States, as 
well as that of the entire world. Utah stands with a number of other 
states as a leader in the technological boom that has fueled America's 
economic progress in recent decades. The future of Utah, and of all 
America, relies on our ability to continue in our role as the global 
technological leader. As I have said before, if we fail to counteract 
the negative effects of the Y2K problem, we will be killing the goose 
that lays the golden egg.
  Every dollar that industry has to spend defending itself from 
frivolous litigation is a dollar that cannot be spent on fixing the 
problem. The way to minimize the hardships caused by the problem on 
January 1st is to encourage remediation by the technology industry and 
to encourage mitigation by would-be plaintiffs, both before and after 
January 1st. This bill does precisely that.
  The Y2K bill provides powerful incentives for industry to fix the Y2K 
problem before it happens and to remedy problems once they occur. 
Contrary to what some opponents of the bill have alleged, there is 
absolutely nothing in the bill that would deny any aggrieved party the 
right to sue. Let me repeat this. There is nothing in the bill that 
would prohibit anyone from bringing a lawsuit. What the bill does is to 
create powerful incentives to fix problems before resort to the courts 
is necessary. It encourages remediation through the requirement of pre-
litigation notice and by providing opportunities for alternative 
dispute resolution. The pre-litigation notice and pleading requirements 
also assist industry in fixing Y2K problems by requiring that 
prospective plaintiffs provide the information necessary for the 
defendant to understand and remedy the problem during the cure period.
  In addition to encouraging the computer industry to remediate the 
problem, this bill fosters action by both industry and consumers to 
avoid the problems caused by Y2K failures. This bill preserves 
contracts and State contract law, encouraging contracting parties to 
anticipate the possibilities of Y2K failure and to do all they can to

[[Page 12748]]

avoid them. The bill also imposes a duty to mitigate, requiring 
prospective plaintiffs to do what they reasonably can to avoid damages 
occurring because of a Y2K failure.
  Some Senators have raised concerns about some of the provisions of 
the Y2K Act. Let me address some of these concerns.
  Specifically, some Senators have opposed to the punitive damages 
provision, the proportional liability provision, and the section 
dealing with the economic loss rule. In the past several days, however, 
we have also heard many of my colleagues set forth the reasons why 
these provisions are central to the effective operation of the bill in 
preventing the disaster that is imminent in the wake of extensive 
frivolous Y2K litigation.
  The punitive damages provision of the Y2K Act is essential in order 
to prevent the destruction of America' small businesses by excessive 
punitive damage awards. This section of the bill is extremely limited, 
as it applies only to small businesses. The bill simply does not impose 
a cap on punitive damages for any defendants other than small 
businesses. Opponents of this provision argue that punitive damages 
serve as a deterrent to misconduct, and that placing a cap on them will 
remove that deterrent. The punitive damage cap created by this bill 
does not remove any deterrent to misconduct.
  Punitive damage awards against small businesses will be limited to 
three times the amount awarded for compensatory damages or $250,000, 
whichever is less. FOr small businesses consisting of an individual 
whose net worth does not exceed $500,000 or a company with less than 50 
employees, this is a significant deterrent of misconduct. In addition, 
there is no cap at all if the plaintiff establishes by clear and 
convincing evidence that the defendant acted with specific intent to 
injure the plaintiff. I cannot take seriously the argument that this 
formulation of punitive damages is too small to act as a deterrent. 
Treble damages or $250,000 is a significant piece of change to pay for 
a small business.
  In fact, I supported a similar cap for all businesses. But, in the 
spirit of bipartisan compromise, we agreed to limit the caps to small 
businesses. I understand that even the White House supported a similar 
small business cap provision in the products liability bill of two 
years ago. So what's the big deal?
  What the small business punitive damages cap does do is to protect 
our small businesses from utter destruction by excessive punitive 
damage awards. As last year's Rand Corporation study of punitive 
damages concluded, the United States has witnessed a substantial 
increase in the amount of punitive damage awards. Witness the recent 
May 10 punitive damage award by an Alabama jury of $581 million to a 
family that complained they were overcharged $1,200 for two satellite 
dishes. According to Rand, although punitive damages amounts to a 
minority of all damages awarded, the very size of these awards skewers 
the civil justice system. Even frivolous lawsuits are settled for fear 
of large judgments. This has led to what is termed ``jackpot justice.'' 
Lawsuits have been grossly transformed from a search of justice to a 
search of deep pockets. We have tried to counter this trend--at least 
for small businesses--in the Y2K Act.
  Speaking about ``jackpot justice''--the proportionate liability 
provision is intended to mitigate the quest for deep pockets by 
assuring fairness in the award of damages. Punishment must fit the 
crime and it is only fair that defendants should be liable only for the 
part of the damage that they cause. In an attempt to forge a bipartisan 
compromise, Senators McCain, Dodd, Wyden, Lieberman, Feinstein, Gorton, 
Bennett, and myself, agreed to the formulation of proportionate 
liability found in the Federal Private Securities Litigation Reform Act 
of 1995. This act was signed into law by the President several years 
ago--so it should be acceptable to the administration.
  Yet some opponents to this bill have spoken out against this 
provision. Opponents of this section of the bill apparently want some 
defendants to be liable for all damages, even if they were responsible 
only for a tiny fraction of the damage. That is the very definition of 
``deep pockets.'' The Y2K Act would prevent this and that is why it is 
opposed by the trial attorneys. The act ensures that a defendant's 
liability in a Y2K action will be for the damage that they caused, and 
not for the damages caused by other defendants.
  Another section of the bill that is under attack is the class action 
section. Opponents of the bill say that this provision would federalize 
all State actions. This is a gross exaggeration. Let me explain.
  The class action provision is vital to the effective operation of the 
bill. Class actions are a significant source of abuse. I have seen this 
as chairman of the Judiciary Committee. Far too often, Federal 
jurisdiction is defeated by joining just one nondiverse class 
plaintiff--even if the overwhelming number of parties are from 
differing States. This wrecks the clear purpose of Federal Rule of 
Civil Procedure 23--to provide for a Federal forum ameliorates myriad 
state judicial decisions that are conflicting in scope and onerous to 
enforce.
  Now, as I stated before in this debate, I am a great proponent of 
federalism and the right of our States to act as what Justice Brandeis 
termed national laboratories of change. But it is axiomatic that a 
national problem needs an uniform solution. That is the justification 
for Congress' commerce clause power and its consequent promulgation of 
rule 23. That is the justification for the Y2K Act itself, in which the 
Y2K defect is clearly a national problem in need of a Federal answer.
  The economic loss section of the Y2K Act has also been the subject of 
some contention. Let me reiterate some of the arguments I made last 
Thursday on the Senate floor in opposition to the Edwards amendment 
which if passed would have weakened this section. The economic loss 
rule is already widely accepted and has been adopted by both the U.S. 
Supreme Court and by a majority of States. The rule basically mandates 
that when parties have entered into contracts and the contract is 
silent as to consequential damages--which is the contract term for 
economic losses--the aggrieved party may not turn around and sue in 
tort for economic losses. Under the rule, the party may only sue under 
tort for economic losses. Under the rule, the party may only sue under 
tort law when they have suffered personal injury or damage to property 
other than the property in dispute.
  In short, the Y2K Act's economic loss section ensures fairness in 
contract law by applying the rule already in use in most states to Y2K 
lawsuits. It prevents ``tortification'' of contract law by flagging an 
end run against terms of a contract agreed to by the parties.
  Let me also remind the critics of this bill that it is of limited 
duration. This bill is designed to specifically address the problems 
related to Y2K computer failures that will occur around the turn of the 
millennium. In keeping with this purpose, the bill has a sunset period, 
which means that the entire bill will only be in effect until January 
1, 2003.
  Let me also make a variant of Pascal's wager. If these disputed 
provisions are harmful, as some critics contend, enacting them will do 
little harm because the bill will expire in 3 years. But if, as the 
supporters of this bill believe, these provisions are critical, not 
including them in the final bill could greatly harm the economy and our 
high tech industries. The choice is obvious. Both reason and equity 
require that these provisions remain in the bill.
  Some have expressed concern that President Clinton will veto this 
bill. I don't think he will. This bill can only solve the problems 
created by the Y2K problem. Its provisions encourage remediation and 
mitigation, and encourage solutions to problems. The President knows 
this. He knows that to sign the bill can only help our nation and the 
world. He knows that by vetoing the bill he will, at best, be doing 
nothing to solve the Y2K problem, and that at worst he will be 
contributing to it.

[[Page 12749]]

If we are to be successful in solving this great problem before us, we 
must overcome our fear and pass the Y2K bill as a strong and effective 
piece of legislation.
  Again, I emphasize the importance of this bill to our nation's 
future. Without meaningful legislation addressing the Y2K problem and 
the deluge of litigation that will surely follow, our nation may suffer 
devastating consequences. The Y2K Act before the Senate today is that 
meaningful legislation. This is a bipartisan bill, created and shaped 
through cooperation on both sides of the aisle. I urge my colleagues to 
vote for its final passage.
  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Connecticut.
  Mr. DODD. Mr. President, very briefly, I want to once again commend 
my colleague from Utah. He has given a very insightful legal analysis 
of what the implications of this proposal are, what the authors of this 
bill are attempting to do. I will restate, not as eloquently as he has, 
the fact that the trial bar performs a very valuable service in this 
country.
  There is no way in the world the Justice Department, and others, 
could do all the work the private litigators achieve on behalf of all 
citizens. But to listen to some talk about this bill, you would think 
we had just voided all litigation when it came to the Y2K issue. 
Nothing could be further from the truth. In fact, quite to the 
contrary, it provides for a systematic way for laws to be filed should 
there be no other means of resolving the difficulties.
  I commend my colleague from Utah. I also commend Senator McCain, the 
chairman of the committee and the principal author of this legislation, 
my colleague from Oregon, Senator Wyden, and the many others who have 
been involved in putting this piece of legislation together. I also 
wish to commend the hard work of Senator McCain's staff, Senator 
Wyden's staff and I wish to particularly recognize my own staff and all 
the work that they have done.
  We have now resolved most of the outstanding issues, or we have had 
votes on a number of them. I understand we will have a final passage 
vote sometime early this afternoon.
  We, as a nation, and the world at large are going to meet the new 
millennium 199 days from today. That is when the clock turns. As many 
of my colleagues know, Senator Bennett of Utah and I were asked by the 
leadership of this body--the majority and the minority--to head up a 
special committee, if you will, to take a good, hard look at the Y2K 
issue and the full ramifications of it on our National Government, 
State and local governments, private industry, nonprofits, and the 
world.
  We have held, over the last year and several months, some 22 
hearings; we have had site visits to nuclear power plants, hospitals, 
and financial services sectors; we have had staff who have gone 
overseas to meet with leaders of other countries--all of this, as 
quickly as we could, to give our colleagues and the country the benefit 
of an analysis of where we stand with this issue of the year 2000 
millennium bug.
  I am not going to go into all the details of the work. We have had a 
good committee. I commend my colleague from Utah, Senator Bennett, who 
has done a very fine job chairing this committee. We think--we hope--we 
have provided a valuable service in highlighting and pushing and using 
the forum of that special committee to urge a greater sense of urgency 
on the part of the various sectors of our society to get ready for this 
problem.
  I think it is fair to say we believe we are in fairly good shape on 
this issue. Again, I will not go through all the details, but, by and 
large, most sectors in our society--government at all levels--are doing 
a good job of remediating the problem, taking the steps that are 
necessary to fix these computers and to eliminate the potential hazards 
and harm. There are larger problems offshore. I am not going to go into 
that at this point. But there has been a lot of work up to this point.
  One of the things we concluded, in part, is that we ought to come up 
with some sort of a means by which, if problems do emerge after January 
1, we ought to try to fix the problem before we litigate the problem.
  This is an outrageous thought, but maybe Congress might actually do 
something in anticipation of a potential problem. We do not normally do 
that around here. We wait for the problem to hit us. We wait for 
catastrophes to occur, many of which we cannot predict, obviously, 
because in many cases we talk about natural disasters or unanticipated 
events.
  However, in 199 days, we have a very anticipated event. We have been 
told by experts, knowledgeable people, during the last 2 years in our 
hearing cycle--one expert after another--that we have a very serious 
problem hanging over us potentially, come the change in the millennium 
date.
  You could go the traditional route and rush to the courthouse every 
time a problem emerges--with a handful of law firms, by the way. To 
speak about the trial bar on this issue, you can count the law firms on 
one hand, almost, that are involved in this kind of litigation. Let 
there be no illusion, this isn't your fender-bender, your product 
liability case, your personal injury case. This is a very specialized 
area. They would prefer to run to the courthouse for the problem.
  Those of us who have offered this bill do not rule out the courthouse 
at all, but we say: Why not a 90-day cooling off period? How about 
saying you have to take some time to try to fix the problem? As much as 
we try to anticipate the problem, we cannot guarantee that we have done 
so. If a problem emerges, why not try to fix the problem? If you cannot 
fix it, then go to the courthouse. It is not much more complicated than 
that.
  This bill lasts 36 months. You would think, to listen to some of my 
colleagues, we were amending the Constitution of the United States, the 
Bill of Rights, that we were changing the Ten Commandments. This is a 
36-month bill for one short window in time, for us to say we want to 
try to solve the problem and not run to the courthouse for 36 months.
  Can the trial bar bear that for 36 months? To see if we can't come to 
some conclusion and avoid the tremendous cost, the business to 
consumers, and others, as they spend weeks and months, if not years, 
litigating these problems instead of trying to fix them? That is really 
what this is all about.
  We came to some significant compromises here. In fact, this bill 
ought to have been done on a consent calendar, in my view. It should 
not have taken a week's time in the Senate to deal with this issue. It 
is not that complicated.
  What we have done here is, we have put caps on punitive damages for 
small business. We do not think you ought to wipe out a small business 
because you file a lawsuit against them, because they have a computer 
glitch problem. These punitive damage caps apply only to businesses 
that employ 50 people or less. We have directors' and officers' 
liabilities--again, no ceilings here on punitive damages at all. The 
trial bar begged for those things. That is included. That is in our 
bill.
  We have proportionate liability here. This is the great stumbling 
block, I guess, for some in this 36-month bill. For 36 months we are 
going to have proportional liability--this cataclysmic event that is 
occurring here for 36 months--where we say that if, in a normal case, 
you are guilty of involvement in some problem, you are responsible for 
that percentage of the problem you caused--that is a radical idea--
except, however, that is not the case if in fact you had an 
intentional, willful action on the part of the defendant. Under those 
circumstances, there is no proportional liability; it is joint and 
several. So we protect the plaintiff that may have been severely hurt 
as a result of this problem.
  That is basically the sum and substance of this legislation--for 36 
months.
  This is an important industry, the high-technology community. It is 
changing the economy of our Nation and the world in which we live. The 
United States is on the cutting edge. We are leading the world. Ten or 
fifteen years ago, all we talked about was

[[Page 12750]]

the Japanese and the Pacific rim. The United States could not compete 
in high technology. We had lost it forever. Well, there were bright 
people in this country who had other thoughts. As a result of their 
ingenuity and hard work, they changed the nature of how the world looks 
to leadership in high technology. Today the United States is the 
leader. These leaders champion ideas that are incubated in basements 
and garages, these technology leaders are often young people who are 
coming out with little or no money in their own pockets but a good 
idea. They are changing how you and I live.
  Mr. President, I ask unanimous consent for 30 additional seconds to 
wrap up.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DODD. These industries are critical to the 21st century economy 
of this country. I do not think we ought to allow some big appetites 
and a handful of law firms to go out there and try and do damage 
unnecessarily to these people. If you have to get to a courthouse, you 
get to the courthouse. But, for 36 months in this country, let us take 
time out and try and solve the problem.
  This bill that Senator McCain, Senator Wyden, myself and others have 
authored, we think buys us this short window of time to resolve these 
difficulties. I hope this afternoon, when final passage occurs, my 
colleagues will vote for the 21st century future and not for a handful 
of law firms that want to litigate forever.
  Mr. MOYNIHAN. Mr. President, I rise to congratulate Senators McCain, 
Dodd, Bennett, and Hatch for all the work they have done on S. 96, the 
Y2K Act. The bill will help protect against frivolous Y2K lawsuits. 
With just 199 days until 2000, the focus must remain on fixing the 
computer problem, not on litigating it.
  The Y2K computer problem has been with us for some while, and it 
would be derelict of me not to mention that it was brought to my 
attention by a dear friend from New York, a financial analyst, John 
Westergaard, who began talking to me about the matter in 1995. On 
February 13, 1996, I wrote to the Congressional Research Service to 
say: Well, now, what about this? Richard Nunno authored a report which 
the CRS sent to me on June 7, 1996, saying that, ``the Y2K problem is 
indeed serious and that fixing it will be costly and time-consuming. 
The problem deserves the careful and coordinated attention of the 
Federal Government, as well as the private sector, in order to avert 
major disruptions on January 1, 2000.''
  I wrote the President, on July 31 of that year, to relay the findings 
of the CRS report and raise the issue generally. In time, a 
Presidential appointment was made to deal with this in the executive 
branch. And last spring--less than 1 year ago--the majority and 
minority leaders had the perception to appoint the Senate Special 
Committee on the Year 2000 Technology Problem.
  We have done a fine job preparing for the Year 2000. It took some 
cajoling, but people finally began to listen. The Federal Government 
should make it. The securities industry has been out on front on this. 
Their tests went very well this past March and April. When Senator 
Bennett and I held a field hearing last summer--July 6--in the 
ceremonial chamber of the U.S. Federal Court House for the Southern 
District of New York, we found the big, large international banks in 
the City advanced in their preparations regarding this matter.
  But much work still remains to be done. Testing and contingency plans 
are still being addressed. Last year, Senators Bennett, Dodd, and I 
introduced the Y2K Disclosure Act. This act, which the President signed 
on October 19, 1999, has been very successful in getting businesses to 
work together and share information on Y2K. S. 96 builds on the 
Disclosure Act and encourages remediation and information sharing. It 
is a good short-term fix for a once-in-a-modern-civilization problem, 
and I encourage the Senate to pass it forthwith.
  The PRESIDING OFFICER. Who yields time?
  Mr. McCAIN. Does the Senator from North Carolina want to use his 
time?
  Mr. HOLLINGS. I thank the distinguished Senator. Mr. President, I 
yield 10 minutes to the distinguished Senator from North Carolina.
  The PRESIDING OFFICER. The Chair recognizes the Senator from North 
Carolina.
  Mr. EDWARDS. I thank the Chair.
  Mr. President, we have a bill before us today that has had a great 
deal of discussion. I just listened to my friend, the distinguished 
Senator from Connecticut, discuss it. He and I agree about a great many 
things. We agree about a great many things with respect to this bill.
  I think it makes great sense to pass a moderate, thoughtful bill that 
provides protection for the computer industry. I think it makes sense 
to create incentives for consumers, buyers of computer products and 
those people who sell those products to, No. 1, try to remedy any Y2K 
problems that might exist with the computers they purchase and, No. 2, 
to work together to solve any problem that either of them may have, 
either the seller or the purchaser.
  I think it makes a great deal of sense, as a result of that, to have 
a cooling off period. I think the 90-day cooling off period is 
something I strongly support. I add to that, I strongly support the 
idea of alternative dispute resolution which has been discussed at 
great length on the floor of the Senate. I think all those things 
accomplish positive things. They accomplish the goal of providing some 
legitimate protection for the computer industry. They accomplish the 
goal of having folks work together to try to avoid lawsuits. I think 
those are things that we ought to support.
  There is a fundamental problem with this particular bill. The problem 
is this: There are going to be cases where purchasers of computers, 
whether they be consumers or small businesspeople, are going to suffer 
legitimate losses. They are going to have a Y2K problem. Their business 
is going to get shut down. They are going to have to continue to make 
payroll. All of us who grew up with small businesses understand that 
proposition. They are going to have to keep paying their employees, 
keep having overhead. But as a result of a Y2K problem, they do not 
keep generating revenue.
  They are going to have a real and substantial loss. The computer 
company or salespeople who sold them the computer may well be 
responsible for that loss. In those cases where the computer company or 
the manufacturer acted in a reckless or irresponsible way on one hand, 
and in addition to that, we have a purchaser who suffered a real 
substantial and legitimate loss--I am not talking about something 
frivolous, not talking about their VCR won't work; I am talking about 
their family-run and family-owned business has been put out of 
business--that loss exists as a result of a Y2K problem clearly caused 
by somebody's irresponsibility, what we have to recognize is that loss 
will not go away. It exists. It exists in reality. It exists in the 
pocketbook of this small businessman.
  The question is really very simple. Who will bear that real and 
legitimate loss when it occurs?
  There are two problems in this bill. One has to do with the issue of 
joint and several liability. The other has to do with economic loss. 
They are both devastating in how they deal with that issue.
  If you start with the basic premise that that loss which has been 
suffered by the consumer or a small businessperson is a real loss that 
is not going to go away, then the question becomes, who is going to pay 
for it? By eliminating joint and several liability, what we have said 
by law is if there are multiple parties who may be responsible, but for 
some reason one of those parties can't be reached, that we are going to 
shift that part of the responsibility, whatever, because it is an 
offshore company, if it is a company going bankrupt, out of business, 
whatever, and that company was 20 percent responsible, that loss gets 
shifted to the innocent consumer, the businessman, under this law. That 
is exactly what this law does.
  Joint and several liability has existed in this country for 200 
years. It

[[Page 12751]]

exists for a simple reason--because it is fair and it is equitable.
  What we say in the law of the United States is that we always want 
the guilty to pay and not the innocent. What this law does is, it 
changes that fundamental premise. If a Y2K problem exists and an 
innocent consumer or businessman suffers as a result, that share of the 
loss that can't be recovered will be borne not by those who 
participated in the loss, the guilty, but will be borne by the 
innocent. That is one problem.
  There is a second problem that is even more devastating. This bill 
essentially eliminates the right to recover economic losses, which 
means, in my example, a small businessman whose family-run-and-owned 
business has been put out of business, as between him or her and a 
computer company or computer sales business that has sold the computer 
to him knowing it was non-Y2K compliant, as between those two, what we 
say in this law is, the innocent purchaser will bear the loss.
  It is so important for all of my colleagues and the American people 
to recognize that there has been a lot of rhetoric on the floor about 
lawsuits and lawyers and the trial bar I heard Senator Dodd talking 
about a few minutes ago. This has nothing to do with lawyers. What we 
are taking about and what we ought to be talking about is who is going 
to be protected by this bill and who is going to be hurt by it.
  We know who is going to be protected. The big computer companies will 
be protected. Now the question is, Who will be hurt? It is not lawyers 
that will be hurt. The people who will be hurt are consumers and small 
businessmen. It really becomes a very simple proposition. We are 
protecting the big guy, and we are shifting that injury and damage to 
the little guy. It is the little guy that gets hurt by this bill.
  In my example where a computer has been sold that is non-Y2K 
compliant, the people who sold it did it absolutely intentionally. They 
knew exactly what they were doing and some innocent businessman in a 
small town in North Carolina gets put out of business. If this law 
passes, this is what he can recover; he can recover the cost of his 
computer.
  Well, he is going to have a great time explaining to his family, to 
his mother and father, who spent their life building up his business, 
that they have been put out of business and they can identify who 
caused it and they did it intentionally and willfully and they were 
irresponsible, but all they can ever get back is the cost of their 
computer.
  It is fundamentally wrong. It is inequitable and it is unfair. That 
is what is wrong with this bill.
  I want to mention three specific examples that I think show the 
American people what a problem we have. Example No. 1, let's suppose we 
have a businessman who runs his assembly line with a computer system. 
On November 15, 1999, this year, the computer salesman comes to him and 
sells him a new system. Let's assume that computer salesman knows the 
system is not Y2K compliant. On January 2, 2000, his assembly line 
comes to a grinding halt. It does so because of this Y2K problem. The 
people who sold it to him were reckless and irresponsible in doing so. 
He has lost all of his sales. He can't produce a product.
  Let's assume that some of his customers will void their contracts, 
which they would. He doesn't have what they need and they have to get 
their product somewhere. They void their contract because he doesn't 
have anything to sell them. He can't meet payroll. For about 3 weeks, 
he is able to pay his people, but he can't meet payroll now because he 
has nothing to sell anymore. He goes out of business. Under section 12 
of this bill, under that example, this is what this manufacturer can 
recover: The cost of the computer. He may have lost thousands and 
thousands of dollars. He has been put out of business, and what he can 
get back is the $5,000 cost of the computer. That is one example.
  Let me give a second example. Suppose a businessman buys a computer 
program that manages his billings, his promotional mailing, and his 
data bases. On January 1, 2000, the program fails and renders the 
computer unworkable. The business can't send out its bills and loses 
the use of its mailing list and data base for more than 2 months; as a 
result, it goes under. Under this bill, he has been run out of 
business--clearly a Y2K problem, clearly the responsibility of the 
people who sold him the computer system. But all he can recover is the 
cost of his computer.
  Finally, assume that we have a doctor who buys an infusion pump which 
is run by a computer, which is done all over the country in doctors' 
offices, and he uses it for a surgical procedure in his office. Because 
of a Y2K problem, it fails during surgery and a patient he cares about 
is severely injured as a result. They sue him for malpractice. He has 
to pay some huge judgment. He doesn't have enough insurance to cover 
it, so he loses thousands and thousands of dollars and his business is 
ruined. What that doctor who is operating in small town North Carolina 
is allowed to recover is the cost of his computer.
  The problem is--and all three of these examples show it--it is very 
fundamental to the problem existing in this bill. We are going to have 
real and legitimate losses that are caused by irresponsible conduct. 
The vast majority of computer companies in this country will act 
responsibly, but the reality is, as we all know, there will be a 
minority of those companies that do not act responsibly. We are going 
to have small businesspeople and consumers all across the United States 
who have real losses. I think my colleagues, Senator McCain, Senator 
Wyden, and Senator Dodd, would all recognize that is true. That is 
reality.
  What we do when we pass this bill is we take that real, legitimate 
loss that has to be borne by somebody--it doesn't disappear into thin 
air because the Congress of the United States passes a law. These folks 
who run small businesses and these consumers are going to have some 
real losses. It is a simple question: Who pays for those losses?
  What I propose is that we have a bill that creates every conceivable 
incentive to cure Y2K problems, to cause these people who have 
legitimate complaints to work to solve those problems; that makes the 
purchaser do everything in his power to reduce his losses, to act in a 
very responsible way; that we streamline the process; that we find a 
way to have alternative dispute resolution; that we make the court 
procedure as simple as it can possibly be. All of those things would go 
to help with any litigation that might occur, or any day in court that 
may occur.
  The problem is that this bill takes that loss that is real and 
legitimate and says we are going to go a step further; we are going to 
say when somebody suffers a real and meaningful loss, we are going to 
make the innocent consumer and the small businessman bear that loss. It 
is fundamentally wrong. It is inequitable. It violates every principle 
of law that exists in this country.
  The American people absolutely do not believe in this and would not 
support it. They don't want frivolous lawsuits. None of us do. We ought 
to cut those off. They want people to use alternative dispute 
resolution. They don't want people going to the courthouse the first 
time they have a problem. We ought to do something about that. But what 
we should not do is throw the baby out with the bath water. There are 
going to be real people out there who have real losses, and it is 
simply not right--and the American people in their gut know it is not 
right--to take that loss and shift it from the people who are 
responsible to the innocent people who have suffered.
  I will make one last comment and I will be finished. I have heard 
Senator Dodd and Senator Wyden talk at great length about the sunset 
nature of this bill, that this is a 3-year bill. With all due respect 
to those arguments, I think they are a smokescreen. This bill will 
cover virtually every Y2K problem that exists, because by the very 
nature of the problem, it is going to come into existence in the year 
2000. So it doesn't make any difference. They could cut it off in 2 
years, or in a year and a half. It would not make any difference 
whatsoever. It could be 20 years. It is going

[[Page 12752]]

to cover exactly the same losses--those losses that rear their ugly 
heads in the year 2000 because of a Y2K problem.
  So what I say to my colleagues and to the American people is that, 
being from a State where we are very proud of our technology industry 
and believing that the great majority of technology companies act in a 
very responsible way, I think it makes a lot of sense to provide some 
thoughtful protection for those folks and to provide the kind of 
incentives we have talked about today. But I don't think we should go 
so far and be so drastic and so dramatic as to take away a real and 
legitimate loss and to take that loss, which is not going to disappear, 
and shift it from the people who are responsible for it to the innocent 
consumers and to innocent small businesspeople. I think that is wrong. 
I think it is protecting the big guy against the little guy. For that 
reason, I oppose this bill and will vote against it.
  I yield the remainder of my time.
  Mr. WYDEN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oregon is recognized.
  Mr. WYDEN. Mr. President, I want to respond to some of the points 
made by the distinguished Senator from North Carolina. But before I do 
that, I want to talk about what a vote against this legislation means 
today.
  A vote against this legislation today means that the high-technology 
sector, which is driving this Nation's economic prosperity, doesn't 
deserve the same kind of treatment afforded the airline manufacturers; 
the high-technology sector doesn't deserve the same kind of treatment 
afforded the securities industry; the high-technology sector doesn't 
deserve the same kind of treatment afforded the financial services 
sector. I just don't think that makes sense, when it is so clear that 
we are going to have problems in the next century with respect to Y2K, 
that we would compound those problems by not giving high technology the 
same sort of protection that we have given to a variety of other 
industries.
  Second, it seems to me that a vote against this legislation is a vote 
against the Nation's risk-takers, and it is a vote against the Nation's 
entrepreneurs who are working their heads off today to make their 
systems Y2K-compliant but are legitimately concerned about frivolous 
lawsuits. I don't think the Senate ought to be voting today against 
those risk-takers and entrepreneurs.
  Third, it seems to me that a vote against this bill fails to 
recognize how dramatic the bipartisan changes have been to this 
legislation since it came out of the Senate Commerce Committee. The 
Senate Commerce Committee bill, as far as I am concerned, was a 
nonstarter. The House bill is a nonstarter. But this bill puts tough 
pressure on business and directs systems to cure problems, as well as 
those who might want to bring suits to mitigate damages.
  Now, my friend from North Carolina has said repeatedly for days that 
if you have a problem and you are a small businessperson, you are not 
going to get to recover anything except the cost of the computer.
  My question, colleagues, is, Why in the world would the overwhelming 
majority of the Nation's small businesses be calling for passage of 
this bill if all they got when there was a problem was the cost of a 
computer?
  I agree with the Senator from North Carolina. These are dedicated, 
thoughtful people. Why in the world would they be in support of a bill 
if all they got was the cost of the computer?
  The reason they are for the bill is they get all the rights that are 
prescribed in the contract that a majority of them signed when they 
purchased a computer. They get the damages that are the foreseeable 
consequence of a Y2K problem. They get economic losses as prescribed by 
State contract law. That is the reason why the overwhelming number of 
small businesses in this country are for this legislation.
  The fact of the matter is, colleagues, that the so-called culprits 
who are behind the Y2K problem are folks who didn't really realize 
decades ago what we would be faced with at the end of the century.
  Let me tell you what Alan Greenspan had to say recently on this 
issue. Alan Greenspan said, ``I am one of the culprits who created the 
problem. I used to write those programs back in the 1960s and 1970s, 
and was so proud of the fact that I was able to squeeze a few elements 
of space by not having to put 19 before the year.''
  That is what Alan Greenspan said. He said he was one of the culprits 
behind the problem. In the infancy of the information age when every 
byte of memory cost about $1 million, he saved his company a lot of 
money. Today a million bytes of memory can be bought for less than a 
penny.
  This problem was a result of an engineering tradeoff, not some kind 
of conspiracy of computer geeks. I doubt that any computer programmer 
ever dreamed that programs written in the 1960s and 1970s would still 
be running today.
  But the point of this legislation is to keep the heat on all of our 
Nation's companies to do everything they can to make the chips and the 
computers and all of our systems Y2K compliant. Let's get the problem 
fixed. But let's also have a safety net in order to ensure justice for 
those who have problems.
  I want to say to my friend from North Carolina, the distinguished 
Senator, that he talked about how companies that are big and bad are 
going to get off the hook; they are going to get a free ride, and, 
again, you are not going to get anything except the cost of the 
computer.
  Let me tell you what the hooks are for those that are big and bad. If 
you are ripping people off, you are going to get stuck with joint and 
several liability. You are going to get stuck with punitive damages. 
That is what happens under this legislation when you are big and bad.
  But what we say in the many cases where we don't have that kind of 
conduct--the Senator from North Carolina and I certainly agree on this 
point--is you will be liable for the proportion of the problem that you 
caused. We say that the small businesses deserve a break on punitive 
damages.
  But let's make no mistake about it, colleagues. If you are big and 
bad, the hooks in this bill are clear. Nobody is getting off the hook. 
You get stuck with joint and several liability. You can be held for 
punitive damages. That is in the text of this legislation.
  There is a reason, colleagues, why the little guy is for this bill. 
There is a reason why the overwhelming number of small businesses in 
this Nation are for the bill. It is that those risk takers, those 
entrepreneurs, those innovators are saying, as we take the steps to 
make our systems Y2K compliant, let's also have a safety net so if 
there are frivolous lawsuits that we aren't going to lose everything as 
a result.
  This bill has seen 11 major changes to favor the consumer, the 
plaintiff, and small businessperson since the legislation left the 
Senate Commerce Committee. I particularly want to credit the chairman 
of the committee, Senator McCain, and the Democratic leader on the 
technology issue, Senator Dodd, who have worked so hard to help fashion 
this proposal.
  I hope today when we vote that we will not send a message that high 
technology doesn't deserve the same kind of treatment that airlines 
get, that the securities industry gets, that the financial services 
sector gets. Let's pass this bill. Let's send it to the conference with 
a resounding vote.
  I yield the floor.

                          ____________________