White House threatens to veto bill
curbing Y2K suits
By Adam Entous
WASHINGTON, April 28 (Reuters) - The White House threatened
on Wednesday to veto legislation limiting lawsuits against
companies stemming from the year 2000 computer bug, saying
such a law could undermine readiness by taking pressure off the businesses charged with
fixing the problem.
The bill, by Senate Commerce Committee Chairman John McCain, an Arizona Republican,
would delay the filing of year 2000 computer bug lawsuits during a 90-day ''cooling-off''
period, cap punitive damages and limit the liability of company executives in millennium
bug cases.
''The administration's overriding concern is that (the legislation) will not enhance readiness
and may, in fact, decrease the incentives organizations have to be ready and assist customers
and business partners to be ready for the transition to the next century,'' the White House's
Office of Management and Budget said in a statement.
Unless changes were made to the bill, which was co-sponsored by Oregon Democratic Sen.
Ron Wyden, ''the attorney general would recommend a veto,'' the White House said.
The millennium bug, often referred to as Y2K for the year 2000, arises because many older
computers record dates using only the last two digits of the year. If left uncorrected such
systems could treat 2000 as 1900, generating errors or system crashes next Jan. 1.
Backed by politically powerful computer makers and software companies, banks, and
manufacturers, McCain and other Republicans said the bill was needed to avert a flood of
lawsuits. According to some estimates litigation costs could add up to $1 trillion.
But most Senate Democrats, under pressure from trial lawyers and consumer advocates,
said they opposed the bill because it would curb the rights of computer users to sue
companies if their systems crash Jan. 1.
Specifically, Democrats oppose provisions capping punitive damages at $250,000 for many
businesses and limiting the liability of top executives to $100,000.
''We want to encourage these key decision makers to be overseeing aggressive year 2000
compliance measures,'' said Sen. Patrick Leahy of Vermont, ranking Democrat on the
Judiciary Committee. ''Instead, this bill says to corporate officers and directors: 'Don't
worry, be happy.'''
The White House complained McCain's measure would protect companies and their top
executives even if they did nothing to fix Y2K-related problems. The Clinton administration
also said the bill would change state laws and thereby ''raise federalism concerns.''
McCain defended his bill, saying he had already agreed to change some of the provisions to
give more protection to consumers in court. In so doing he won the support of Wyden and a
few other Democrats.
But the White House and many Senate Democrats said they were not satisfied. They want
the caps dropped and are demanding other changes.
To secure these changes the White House said it was working with lawmakers on several
amendments. OMB said these would encourage companies to fix Y2K problems before they
occur next Jan. 1, weed out ''frivolous lawsuits,'' and encourage alternatives to litigation.
McCain said these changes threatened to ''gut'' the bill. Wyden said he was open to
amendments to reach a compromise. |
