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Senators Pass Y2K Suit Limits

By Stephen Barr
Washington Post Staff Writer
Wednesday, June 16, 1999; Page A35

The Senate, defying White House veto threats, approved legislation yesterday that would shield companies from lawsuits in the event of Year 2000 computer failures.

But the 62 to 37 vote fell five short of the two-thirds needed to override a presidential veto. The White House has issued four veto threats, contending that proposed liability limits in the bill would favor industry over consumers and would interfere with state laws.

Despite the veto threats, Sen. John McCain (R-Ariz.), the bill's chief sponsor, and other supporters said they hoped to win White House support during upcoming negotiations to resolve differences with a House bill that passed in May. "We will again work to do what we can to avoid a presidential veto of this very important legislation," McCain said.

Twelve Democrats voted for the bill, including, locally, Sen. Charles S. Robb (Va.). Sen. John W. Warner (R-Va.) also supported the bill, while Maryland Democrats Paul S. Sarbanes and Barbara A. Mikulski voted against it.

"It's a strong vote," said Sen. Christopher J. Dodd (D-Conn.), a bill supporter. "It sends a strong message that we would like to get this bill done."

A coalition of powerful business and high-tech groups helped write versions of the legislation and have lobbied for its passage since January. They contend that high-tech companies need legislative protections to avert a financial catastrophe early next year if computers using two-digit date fields interpret "00" as 1900, not 2000, and malfunction or crash.

But much of the jousting has had little to do with the risks posed by the date-conversion glitch, popularly known as Y2K. Instead, debate has spilled into presidential campaign politics and accusations that "there will be a gold rush on the part of voracious lawyers who see this as an opportunity for litigation," as Dodd put it yesterday.

Some congressional Republicans and business lobbyists have hoped to use the Y2K issue to force Vice President Gore, who is running for president, to choose between two important Democratic constituencies--trial lawyers, who oppose liability limits as anti-consumer, and Silicon Valley companies, which want to avoid class action suits.

GOP leaders also want to improve their standing with the high-tech industry and set the vote for yesterday in a bid to take advantage of Joint Economic Committee hearings this week featuring high-tech executives talking about the importance of the computer in the nation's economy.

The Senate bill approved yesterday would delay the filing of Y2K lawsuits for up to 90 days in order to give computer companies a chance to fix problems. The bill would make it more difficult to bring class action suits and limit punitive damages against small businesses with fewer than 50 employees. To discourage suits against companies with "deep pockets," defendants would be responsible for only their share of the damage.

Industry spokesman said yesterday that now is the time for the White House to enter into congressional negotiations on how to best provide a legal shield for high-tech companies.

"I'm hopeful that President Clinton and Vice President Gore will realize that the best thing they can do is go in and help negotiators . . . and stop issuing veto threats," said Harris Miller, president of the Information Technology Association of America.

Jerry J. Jasinowski, president of the National Association of Manufacturers, said he believed Clinton would sign a Y2K liability bill. "The White House pushed hard to keep several Democrats from coming over. Clearly, the White House made a big push to continue to have leverage in the [negotiating] conference, and it is just a matter of time before they and other Democrats come aboard," he said.

The Association of Trial Lawyers of America, also applauded yesterday's vote, but for different reasons. Mark S. Mandell, ATLA's president, said "we're real pleased" the bill fell short of a veto-proof majority.

"We appreciate the position the White House has taken, because it is a position in support of the rights of the American people," Mandell said. "We hope they maintain that position."

© 1999 The Washington Post Company

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