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Technology Stocks : Discuss Year 2000 Issues -- Ignore unavailable to you. Want to Upgrade?

To: flatsville who wrote (5758)	5/20/1999 1:14:00 PM
From: Ken Salaets	Respond to of 9818

Latest missive from the Trial Lawyers (ggg): The White House Washington May 18, 1999 Ihe Honorable Thomas A. Daschle Democratic Leader United States Senate Washington, DC 20510 Dear Mr. Leader: The Administration is pleased to learn that Senators Kerry, Robb, Breaux, Reid, and Daschle, plan to introduce legislation to address potential Year 2000 ("Y2K") computer problem litigation. The Administration strongly Supports adoption of their proposal. [ed. note: no doubt; they wrote it! ggg] Specifically, this bill would: · Encourage parties to settle their disputes without litigation by requiring plaintiffs to notify defendants of their intention to file suit, requiring defendants to respond with the action they plan to take to cure the defect, and encouraging parties to use alternative dispute resolution mechanisms; · Help to screen out frivolous claims and ensure that claims allege material defects, by asking plaintiffs in Y2K actions to plead with particularity facts concerning the materiality of the defect and the ensuing damages; · Deter frivolous class action litigation, while preserving important state court class action remedies for small businesses and consumers, by limiting class actions (including those involving consumers) to claims in which the plaintiffs' damage is "material" and requiring class action plaintiffs to plead with specificity regarding the materiality of defect and the nature of the damages; · Encourage everyone to take steps to avoid Y2K failures, by excluding from recoverable damages any amount that the plaintiff reasonably should have avoided in light of information that was provided to the plaintiff by the defendant; · Make contract terms enforceable, and common law defenses available, consistent with applicable law, so that state legislatures or courts do not shift liability rules in anticipation of, or in response to, Y2K failures; · Reward those who have taken specific appropriate steps to prevent or minimize harm to the plaintiff from Y2K failures, by limiting their responsibility to their proportionate share of the damages and, if some portion of the judgment in favor of the plaintiff cannot be collected, the percentage of that uncollectible portion that corresponds to their percentage of responsibility; · Limit frivolous Y2K claims by providing statutory recognition of the economic loss rule, but without harming the ability of plaintiffs to recover in cases of fraud; · Avoid placing insuperable burdens on individual consumers with legitimate claims by limiting most of the bill's provisions to the commercial context, with the exception of the class action provisions described above; and · Respect the comprehensive legislation to deter frivolous securities lawsuits enacted by Congress in 1995 and 1998, by expressly excluding securities claims from the bill's scope. We understand that Congress may return to S. 96 (the McCain-Wyden bill) at any time. Notwithstanding improvements to S. 96 contained in an amendment by Senator Dodd, the bill as amended would continue to raise significant concerns. If S. 96 were presented to the President in its current form or as amended by the Dodd amendment, the President's senior advisors would recommend that he veto the bill. Specifically, S. 96 would not enhance readiness and might, in fact, decrease incentives for readiness, by capping punitive damages and limiting joint and several liability for damages, even if the defendants do nothing. S. 96 also would require that plaintiffs plead information about the state of mind of the defendant that they cannot possess -- especially before any opportunity for discovery. S. 96 effectively would allow defendants to move virtually all Y2K class actions brought in State court to Federal court - clogging the already overburdened federal courts - a serious concern of the Judicial Conference. S. 96 would create a federal "economic loss" rule far broader than the existing state common law rules and could harm the ability of the plaintiff to recover in the case of fraud. S. 96 would place inappropriate barriers in front of all sorts of claims brought by consumers, who often already are at a disadvantage when seeking redress from commercial firms. Finally, S. 96 would overlay a confusing and possibly conflicting set of legal standards on securities claims that are already governed by legislation, adopted by Congress in 1995 and l998, to deter frivolous securities litigation. pg.2 Finally' we understand that some in the information technology community have raised questions about a few provisions in the Kerry-Robb-Breaux-Reid-Daschle proposal. We would welcome the opportunity to discuss these issues with the bill's sponsors and the IT industry to see if we could resolve any of those issues together. We look forward to working on a bipartisan basis with members of Congress from both chambers to advance meaningful, targeted legislation and see it quickly signed into law. Sincerely, Bruce Lindsey Assistant to the President and Deputy Counsel Gene Sperling Assistant to the President and Director of the National Economic Council Identical letters sent to the Honorable Trent Lott, the Honorable Dennis Hastert, and the Honorable Richard Gephardt.