Calif. bill to limit Y2K cases

In an effort to protect companies from huge court awards, a California state legislator proposes a bill that would limit damages in Year 2000 bug cases.

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In an effort to protect companies from huge court awards for Year 2000 related problems, a California state legislator has proposed a bill that would limit damages in Year 2000 cases.

State Assemblyman Brooks Firestone, a Los Olivos Republican, is expected to submit a bill next month that would prohibit awarding damages for pain and suffering, limiting them to cases of bodily injury and to reflect costs "reasonably incurred to reprogram or replace and internally test the relevant," computer system, according to the draft language of the proposed bill.

Proponents of the bill say they're looking to control the liability costs from an expected blizzard of lawsuits triggered by the millennium bug. They also see the bill as a welcome call to software companies looking to do business in the Golden State.

"If we accomplish this first in this state, we will have a comparative advantage over other states and bring high-tech companies to California," Leon Page, an aide to Firestone, said.

Firestone's staff contends that it is essential that the Legislature create conditions that will enable the high-tech industry to prosper in California.

Firestone's proposal comes just a week after the first class-action suit regarding a Year 2000 bug was filed. In that case, a New York-based computer hardware company filed a lawsuit in California state court claiming a database accounting software company failed to provide free Year 2000 compliance upgrades.

Atlaz International filed the suit last week in Marin County Superior Court charging Software Business Technologies and its subsidiary, SBT Accounting Systems, with breach of warranty, fraud, and fraudulent and unfair business practices. The claim seeks compensation and relief, including $50 million for legal and other fees, according to lawyers in the case.

And the Firestone proposal comes a week before the Securities and Exchange Commission is expected to offer new guidelines next week to help companies plan to solve computer glitches expected to arise at the turn of the century. Also next week, the Office of Management and Budget is expected to release its quarterly review of the federal government's response to the Year 2000 computer problem.