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Intuit faces Y2K lawsuit

The class-action suit charges Intuit with selling versions of its Quicken financial software that are unable to process dates after December 31, 1999.

A lawsuit is charging Intuit with selling versions of its popular Quicken financial software program that are unable to process dates after December 31, 1999.

The class-action suit, filed in New York State Supreme Court on behalf of all purchasers of Quicken 5 and 6 (both Windows and Mac versions), seeks damages and asks that Intuit provide free fixes for the flawed software.

The Mountain View, California-based software maker told Quicken customers the only way to fix the Y2K problem is to spend $35 for Quicken 98, which recognizes dates beyond December 31, 1999, according to the suit.

"We believe this is unlawful and violates New York statutes," said Jeffrey Klafter, a partner with Bernstein Litowitz Berger & Grossmann, the firm that filed the suit. "They're trying to make a profit off of their own mistake. They shouldn't be able to do that."

Today's suit is in preliminary stages, and, according to New York state law, Intuit has 20 days to respond, Klafter said.

Intuit executives were not immediately available for comment on the lawsuit.

Intuit this afternoon issued a statement claiming that company executives have yet to receive a copy of the complaint. But, in response to a press release issued this morning by the law firm that filed the suit, Intuit says the action is "completely without merit" and that it will "defend vigorously against it."

Because software manufacturers used only the last two digits to mark the year, at the turn of the century computers may mistakenly read the year 2000 as a meaningless "00" or 1900. That could cause computers to malfunction or shut down.

According to the suit, Intuit has admitted that the online banking functions in Quicken 5 and 6, sold as recently as last October, are incapable of handling transactions with year 2000 dates.

Klafter said a number of hardware and software companies have provided free upgrades or patches for this problem, while a minority have chosen the same path as Quicken. Although he would not name any of the companies, he said his firm is currently investigating similar claims against other software companies trying to charge for product upgrades to fix the Y2K problem.

The suit filed today alleges that consumers were never warned when they purchased Quicken 5 and 6 that this feature is defective and will the software will be useless when users start to input dates after December 31, 1999. Now, Klaftan said, consumers accustomed to using Quicken will have to spend a minimum of $35 to purchase Quicken 98.

Just one week ago a California legislative committee defeated a bill that would have granted the state's software firms immunity from lawsuits related to the millennium bug.

The Assembly Judiciary Committee failed to support the bill that would have exempted software firms or related computer companies from Year 2000 lawsuits claiming fraud, negligence, or unfair business practices, provided the companies took steps to make their programs immune to the millennium bug. The bill was supported by a host of companies in the computer industry, including Intel.

The bill was meant to stop what some see as an unavoidable blizzard of lawsuits against software companies regarding the Year 2000 problem.

Over the last six months, a number of Year 2000 cases have come down the pike.

In February, a suit was filed against Symantec on behalf of customers of Norton AntiVirus software, alleging breach of warranty and other claims in connection with Symantec's flagship product, which the complaint says can not recognize the year 2000.

That suit was filed a month after a New York hardware company filed a similar suit seeking $50 million from software maker SBT Accounting Systems. Both suits seek class-action status, meaning other aggrieved parties also could become plaintiffs in the litigation.