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White House threatens to veto Y2K bill

The debate surrounding a controversial bill that looks to limit Y2K lawsuits gets hotter as the White House officially speaks out against the measure and threatens to veto the bill.

The debate surrounding a controversial bill now in the Senate that looks to limit lawsuits arising from the Year 2000 technology glitch got hotter today as the White House officially spoke out against the measure and threatened to veto the bill.

In a strongly worded statement, the Clinton administration criticized the "Y2K Act"--S.96, submitted by Commerce Committee chairman Sen. John McCain, as well as the amendment proposed by Sen. Ron Wyden (D-Oregon) that looked to waterdown some of the litigation protections for companies contained in the earlier version of the bill.

Back to Year 2000 Index Page The Senate could vote on the McCain bill as soon as today, said Senate staffers.

As reported, the bill would curb so-called millennium bug suits against computer, software, and other technology companies.

"If S.96 were presented to the president, either as reported or in the form of the proposed McCain-Wyden amendment, the attorney general would recommend a veto," the White House executive office said in the statement.

Although the administration said it recognizes both the importance of discouraging frivolous litigation and the need to keep the courts open for legitimate claims, its overriding concern is that the bill will not enhance Y2K readiness and may dampen organizations' motivation to be ready to assist customers and business partners.

The White House said the McCain measure would protect defendants in Y2K actions by capping punitive damages and by limiting the extent of their liability to their proportional share of damages.

"As a result, S.96 would reduce the liability these defendants may face, even if they do nothing," the administration warned.

Like the many Democratic senators who have spoken out against the McCain bill since its inception, the White House said the "Y2K Act" would "substantially modify" states' laws by imposing new pleading requirements and by effectively requiring nearly all Y2K class actions to use federal court standards.

"While the administration could support the adoption of certain federal rules that would, in some meaningful way, help identify and bar frivolous Y2K lawsuits, the broad and intrusive provisions of S.96 sweep far beyond this purpose and accordingly raise federalism concerns," the administration warned.

Although the McCain-Wyden bill has attracted criticism from the administration, consumer groups, and Senate Democrats, as reported, the measure does have supporters.

McCain and other Republicans said the bill was needed to avert a deluge of lawsuits. According to some estimates, litigation costs could add up to $1 trillion.

During debate on the bill yesterday, Sen. Orrin Hatch (R-Utah), the chairman of the Judiciary Committee, spoke out in support of the measure, arguing that the bill does not prevent all Y2K litigation, but simply pushes Y2K problem solving as a more attractive alternative to litigation.

"Make no mistake about it, this super-litigation threat is real; and, if it substantially interferes with the computer industry's ongoing Y2K repair efforts, the consequences for America could be disastrous. Let me say I support a strong bill," he said, adding that McCain's bill mirrors one he submitted earlier to the Judiciary Committee.

The Y2K bug can cause computers to read the year 2000 as 1900, because most older computers were programmed to read a two-digit year date. The problem could cause machines or networks to either crash or transmit bad information, which has prompted all sorts of speculation on what will happen if computer systems begin to crash on January 1, 2000.