Y2K Act

(Sec. 5) Mandates that, in any Y2K action in which punitive damages are permitted, the defendant shall not be liable unless the plaintiff proves that the applicable standard for awarding damages has been met.

Limits punitive damages in such an action to the lesser of three times the amount awarded for compensatory damages or $250,000. Makes such limitation applicable to: (1) individuals whose net worth does not exceed $500,000; or (2) an entity employing fewer than 50 full-time employees. Waives such limitation when specific intent to injure is established. Prohibits punitive damages from being awarded against a government entity.

(Sec. 6) Requires the application of proportionate liability upon each person against whom a final judgment is entered in a Y2K action. Makes the liability of a defendant in such an action joint and several if the trier of fact determines that such defendant: (1) acted with specific intent to injure the plaintiff; or (2) knowingly committed fraud. Makes any other defendant proportionately liable for the uncollectible share of a judgment against a defendant for compensatory damages, with a limitation. States that a defendant who settles a Y2K action at any time before final verdict or judgment shall be discharged from all claims for contribution brought by other persons. Entitles a defendant who is jointly and severally liable in a Y2K action to recover contribution from any other person who, if joined in the original action, would have been liable for the same damages. Applies a six-month statute of limitations for such contribution.

(Sec. 7) Requires a prospective plaintiff, before commencing a Y2K action (except in an action seeking only injunctive relief), to serve on each prospective defendant a written notice that identifies with particularity the manifestations of any material defect causing harm or loss, the harm or loss suffered, the remedy sought, and certain information identifying any individual authorized to negotiate on behalf of the plaintiff. Requires a response to such notice within 30 days proposing remedial actions. Allows a plaintiff to immediately commence a legal action if the defendant fails to respond to such notice or does not propose remedial actions. Allows a defendant 60 days after an appropriate response to complete any proposed remedial action.

(Sec. 8) Outlines pleading requirements, including specification of the nature, amount, and factual basis for calculating damages. Requires damages awarded to exclude compensation for damages the plaintiff would reasonably have avoided in light of disclosures.

(Sec. 10) Requires the application of the doctrines of impossibility and commercial impracticability, as such doctrines were in existence as of January 1, 1999, in any Y2K action involving breach or repudiation of contract. Prohibits the award of damages by contract unless such damages are allowed by the express terms of the contract or by operation of State or Federal law.

(Sec. 12) Prohibits a party to a Y2K action making a tort claim from recovering damages for economic loss unless such damages are permitted under applicable Federal or State law and: (1) such recovery is provided for under a contract entered into by the party; or (2) such losses result directly from damage to tangible property caused by the Y2K failure. Excludes from such limitation patent, copyright, trade-secret, or trademark action, or any claim for defamation or invasion of privacy under Federal or State law.

(Sec. 13) Requires the plaintiff, in a Y2K action other than a claim for breach or repudiation of contract, to prove a defendant's state of mind when the defendant's actual or constructive awareness of the Y2K failure is an element of the claim. Provides specific limitations on bystander liability for Y2K failures. Applies to this Act the protections for the exchange of information afforded under the Year 2000 Information and Readiness Disclosure Act.

(Sec. 14) Authorizes the appointment in any U.S. district court of special masters or magistrate judges for hearing Y2K actions.

(Sec. 15) Provides that, in any Y2K action involving a claim that a product or service is defective, a class action may be maintained only if: (1) it satisfies all other Federal or State class action procedural laws or rules; and (2) the court finds that the alleged defect would be material to the majority of such class. Requires specified notice to class members. Provides jurisdiction in U.S. district court for class action Y2K suits involving more than $1 million, with an exception when the parties concerned or the claims asserted primarily involve only one State.