Y2K lawsuits grow, liability bill debate continues

As negotiations continue on legislation that looks to limit lawsuits arising from the Year 2000 bug, the number of Y2K lawsuits filed and settled continues to grow.

3 min read
As legislation that looks to limit lawsuits arising from the Year 2000 technology problem continues to be negotiated in congressional conference, the number of Y2K lawsuits filed and settled continues to grow.

For instance, Office Depot is prepared to settle a suit that claims major retailers are responsible for informing consumers as to whether the computers they sell are Y2K compliant.

Back to Year 2000 Index Page The U.S. court system has more than 70 lawsuits pending, with 35 lawsuits filed in the first half of 1999 alone--compared to 30 filed during all of 1998, according to Boston law firm Goodwin Proctor and Hoar.

As previously reported, the Office Depot case centers on whether retailers are guilty of "unfair business practice" because they sell computer products without advising consumers on whether the goods are Year 2000 compliant.

Office Depot's decision to back out comes after a motion to dismiss the case, filed by the group of retailers, was shot down by a federal judge.

In the defendants' motion to dismiss, the retailers, which include Office Depot, Circuit City, The Good Guys, CompUSA, Fry's Electronics, Office Max, and Staples, attempted to persuade the court that because the products work now they are not defective; there is no duty to disclose the Year 2000 capabilities of products they sell; and silence under California law is not an unfair business practice.

When that motion was shot down early on in the case, Office Depot bailed out of the suit.

Under the settlement, Office Depot has agreed to take certain affirmative steps to advise its current and past customers of the need to determine whether their computer systems are Y2K compliant, including providing notification in their California stores advertising and on their Web site.

A lawyer for the plaintiff today told CNET News.com that he expects the other retailers to follow suit next month when he and the legal team representing the group of companies meet to mediate.

"No one else was interested in settling before," said Rich Ergo, a lawyer for plaintiff Tom Johnson. "Now they appear to be excited about the idea after Office Depot made their decision."

Ergo said you can never assume what the other side is thinking. However, "it seems they are motivated to settle."

The decision by Office Depot comes as Congress continues to hammer out legislation that would limit such Y2K lawsuits in the future by providing disputing parties with a 90-day "cooling-off" period to mitigate their grievances out of court; set some caps on punitive damages for small businesses; protect government entities including municipalities, school, fire, water, and sanitation districts from punitive damages; and protect those not directly involved in a Year 2000 bug failure.

The bill represents a continuing debate among senators over how to limit what some consider a potential flood of litigation that could arise from Y2K problems--which by some estimates could cost $1 trillion and cripple the economy.

Senate staffers said today a conference scheduled today between members of Congress was canceled because of ongoing negotiations. After a bill is hammered out it will be sent to the White House, where the president has already threatened to veto the measure.