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1998-04-29 07:29:18


California Y2K Liability Protection Bill Dies in Committee



A bill to protect firms from lawsuits over y2k has died in committee.

This is from TECH WEB NEWS (April 21).

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A California bill that would have provided broad protections for companies facing year 2000-based class-action lawsuits died in committee Tuesday.

The bill, the first attempt in the United States to shield private companies from year 2000 liability, had been the focus of an intense lobbying campaign by Silicon Valley companies and other business associations over the past few days. But in a close vote, California lawmakers sided with critics who said the measure gave companies too many protections.

Opponents "found the fraud exemption to be too broad," said one Judiciary Committee aide who asked to remain anonymous. "There was concern that many vendors are, to this day, putting software out there that's not year 2000-compliant. Why should they get an exemption?"

But supporters vowed to bring back the bill later this session, saying the issue has to be resolved in the next few months to do any good. . . .

Companies worry that they could also be liable for hundreds of millions of dollars in legal expenses resulting from the end-of-decade chaos. Several lawsuits already have been filed against computer companies, alleging company officials were not providing a fix for the bug quickly enough. Prominent tort attorneys have said slow corporate response to the problem is likely to result in more suits. . . .

The bill also would have protected financial organizations such as banks and insurance companies, barring class-action suits resulting from a meltdown in their systems.

The politically powerful state trial attorneys' association opposed the bill, saying it would have reduced the financial incentive for companies to find a fix. At the committee hearing Tuesday, critics also said it gave too much protection to corporate officers.


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