YEAR2000/16 inches/lk1ST/mark2nd
By HOWARD FINE
Staff Reporter
A statewide coalition of high-tech companies, banks, credit card issuers, manufacturers and other businesses groups is pushing for legislation that would limit their liability in class-action lawsuits arising out of the “Year 2000” computer problem.
The Year 2000 Legal Coalition, as the group calls itself, is launching a pre-emptive strike against a possible rash of class-action lawsuits related to the millenium bug.
The group supports AB 1710 by state Assemblyman Brooks Firestone, R-Los Olivos, which would grant immunity under certain circumstances to software and related computer firms from lawsuits claiming fraud, negligence or unfair business practices.
The bill is scheduled for a hearing in the Assembly Judiciary Committee on April 21.
“We began this effort after we started picking up word that plaintiffs attorneys were going to seminars that were presenting this as the next great litigation opportunity,” said John Sullivan, president of the Association for California Tort Reform and head of the Year 2000 Legal Coalition.
Already, Cupertino software giant Symantec Corp. has been hit with one such lawsuit and others will follow, Sullivan predicted.
Trial lawyers, on the other hand, argue that the legislation would limit the recourse of consumers and small businesses that might lose money or valuable data because of the problem, while protecting the profits of computer software manufacturers.
“The bill is anti-business because it shields an industry that has sold a defective product that will cause substantial losses and business interruptions for businesses of all types,” said Rick Simmons, president of Consumer Attorneys of California.
The “Year 2000 problem” has long been a concern among users of major computer networks, especially those with systems predating the mid-1990s. Many of these older computer software programs use only two digits in their dates as a space-saving mechanism; on Jan. 1, 2000, many of those date programs could revert back to “1900” instead of going to “2000.” If this occurs, it could invalidate or alter millions of computer transactions.
There is uncertainty over just how serious a problem this will be, since no one knows exactly which programs will go awry. Predictions have ranged from total nationwide gridlock of financial and travel systems to a few scattered problems.
Already, banks and government agencies around the country have spent millions of dollars addressing the problem.
Under the proposed legislation, companies must take a series of “reasonable steps” to receive immunity from Year 2000-related lawsuits. They must notify their customers of the Year 2000 problem and the steps needed to correct the problem. They must also offer free of charge computer software designed to correct the Year 2000 problem.
The consumer class-action lawsuit against Symantec, manufacturer of the Norton anti-virus and the “WinFax” programs, was filed earlier this year by Milberg Weiss Bershad Hynes & Lerach, the New York-based law firm best known for filing shareholder class-action suits. The lawsuit alleges that Symantec released its Norton 3 anti-virus program knowing it would have to be upgraded to address the Year 2000 problem, according to Milberg Weiss partner Reed Kathrein.
Symantec, in a March 5 statement, characterized the complaint as “without merit.
