It's Money That Matters
      One thing in the technology industry's favor is that it is not alone in the fight. Plenty of Wall Street interests, as well as businesses, have created a coalition that has already agreed on the major aspects they want to see in liability legislation.
      "I think what is so amazing about this bill is how quickly a broad array of the business community came together to reach a consensus on legislation. Republicans want to get this bill through as quickly as possible, before that coalition can come apart," said a Senate leadership Republican staff member.
      The business community coalition includes about 80 associations that have been working together through a steering committee led by the U.S. Chamber of Commerce, the National Association of Manufacturers, the American Insurance Association, the National Retail Federation, the Securities Industry Association, the Semiconductor Industry Association and others. In addition, high-tech trade groups and TechNet, Silicon Valley’s lobbying organization, have declared Y2K litigation reform a high priority.
      Working with the coalition to lobby is well-connected Democrat Mark H. Gitenstein of Mayer, Brown and Platt, who served as chief counsel to Sen. Joseph Biden D-DE. Biden worked on the passage of securities litigation reform in the last Congress.
      Bipartisan support is most evident in the Senate, where Y2K legislation is expected to move through committees swiftly. Senate Judiciary Committee Chairman Orrin Hatch R-UT and Sen. Dianne Feinstein D-CA are introducing the Y2K Fairness and Responsibility Act Feb. 24 to encourage remediation rather than lawsuits, and to limit punitive damages related to Y2K. A Senate Judiciary Committee hearing is scheduled for Mar. 1 on the bill.
      Sen. Christopher Dodd D-CT, ranking member of the Senate Y2K committee, testified recently that he sees a need for further Y2K litigation reform. A hearing is planned on Mar. 11. The Senate Commerce Committee plans to act on Mar. 3 on Chairman John McCain's Y2K Act, and Sen. Slade Gorton R-WA has been tapped by the Republican leadership to focus on Y2K legislation.
      "Y2K is on the docket for issues that are likely to come to the floor," according to John Czwartacki, spokesman for Senate Majority Leader Trent Lott R-MS.
      Still, no Democrats besides Feinstein have taken a firm stand in favor of a Y2K bill. Dodd, Sen. Ron Wyden D-OR, Sen. Jay Rockefeller D-WV and Sen. Patrick Leahy D-VT, who have brokered agreements between the Administration and Congressional Republicans in the past on liability issues, are holding back on taking a position.
      "Senator Dodd is waiting for the results of the March 11 hearing," said a spokeswoman for Dodd.

Fuel On The Hill
      In the House, a 19-member bipartisan coalition introduced its bill on Feb. 23. The sponsors include Reps. Christopher Cox R-CA, Bud Cramer D-AL, Tom Davis R-VA, Cal Dooley D-CA, David Dreier R-CA and James Moran D-VA. Cox and Dreier, as members of the House leadership, said they understand this will be legislation the Republican majority will support in this Congress. However, the legislation is unlikely to hit the floor until April because it must be considered by two House committees, Judiciary and Commerce, according to a Republican source.
      Despite the majority's likely support, the House is a tough challenge because close to 100 Democrats will need to support the legislation before the White House will even consider coming out in favor of it, according to several lobbyists.
      "I think we need 50 to 100 Democrats to feel comfortable with this bill for the White House to feel it is the right and proper thing to do. There is no question that everyone has their work cut out for them," said Marc Pearl, general counsel of the Information Technology Association of America.
      In the hope of garnering those Democrats, the business coalition is working on a grassroots strategy to get local businesses and constituents to contact their members of congress across the country and educate them on why the Y2K bill is needed. To help with its own planning, the U.S. Chamber of Commerce is close to hiring Goddard Claussen Campaigns, a public advocacy firm, according to several people working with the business coalition. (To see samples of Goddard Claussen's work on Cloakroom, click here.)
      The issue also needs to be framed as something that is important for business, rather than an issue that bashes trial lawyers, according to one Democrat strategist. Making the Y2K legislation about "stopping the enrichment of lawyers" won’t bring wavering Democrats to the table, especially when the trial lawyers gave nearly $4 million to congressional Democrats in the last election cycle, compared to just $111,500 for Republicans, according to analysis of Federal Elections Commission records by Common Cause.
      "If this is shaping into the traditional trial lawyers versus the industry... a logical conclusion" is that the industry will lose, according to one Senate Judiciary committee aide.
      The trial lawyers argue that on principle no business should be "immunized" from wrongdoing, especially when businesses knew for years that the Y2K problem was looming. Further, providing any caps on liability could cause businesses to decide it would be more expensive to fix the Y2K bug rather than just wait it out and see if there is a problem on Jan. 1.
      "The court system works very well, let it do its job," another Senate Democratic staffer said.
      However, the groups in the business coalition said no businesses are being immunized because the legislation is crafted so that people can still sue and be compensated for damages.
      "The parties at the table may look the same, but this isn’t the traditional fight of trial lawyers versus industry," said Jan Amundson, general counsel at the National Association of Manufacturers. "This bill isn't going to deny anyone any rights to sue, and it excludes personal injury, which trial lawyers generally harangue about... the definition of punitive damages is very focused so that people would be encouraged to enter into negotiations rather than go to court."
      The trial lawyers do support two smaller alternatives to the problem: a tax cut for businesses that spend money, trying to help small businesses fix their Y2K problem, and low interest loans to small business to help them fix their computers.
      Meanwhile, White House Y2K point man John Koskinen said Tuesday that they still don’t see any need for new Y2K legislation.
      "We don't want to do anything to provide a disincentive" for businesses to fix the problem, Koskinen said.
      At the same time, Vice President Al Gore is heading to Silicon Valley next week, just as his all-but-announced 2000 presidential campaign begins, and one of the Valley’s top priorities is Y2K litigation reform.
      "This is difficult for the administration to veto," said Rep. Davis when unveiling his Y2K bill Tuesday. "Could you imagine Al Gore going to Silicon Valley to explain a veto on this?"

— by Bara Vaida