Senate Bill 0080c3

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    Florida Senate - 1999               CS for CS for CS for SB 80

    By the Committees on Fiscal Policy; Governmental Oversight and
    Productivity; Commerce and Economic Opportunities; and
    Senators Grant, Campbell, Klein, Brown-Waite and Bronson



    309-2142-99

  1                      A bill to be entitled

  2         An act relating to information technology

  3         resources; creating the "Commerce Protection

  4         Act"; defining terms; prescribing exclusive

  5         remedies against persons, businesses, and

  6         governmental agencies for damages caused by the

  7         failure of their information technology

  8         resources to function properly with respect to

  9         date data; prescribing and limiting damages;

10         providing for mediation; barring certain class

11         actions; requiring that actions be brought

12         within a specified time; providing immunity

13         from personal liability for directors and

14         officers of businesses under specified

15         circumstances; exempting the exchange of

16         certain information among businesses from

17         action under the Florida Antitrust Act of 1980;

18         prescribing alternative dispute-resolution

19         procedures; providing for liability for costs

20         and attorney's fees under specified

21         circumstances; prescribing circumstances under

22         which the maker of a year-2000 statement is not

23         liable under state law with respect to that

24         statement; providing for construction of the

25         act; repealing s. 282.4045, F.S., which grants

26         immunity from liability to governmental

27         entities for certain computer calculation

28         failures; providing for severability; providing

29         an effective date.

30

31  Be It Enacted by the Legislature of the State of Florida:

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    Florida Senate - 1999               CS for CS for CS for SB 80
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  1         Section 1.  Short title.--This act may be cited as the

  2  "Commerce Protection Act."

  3         Section 2.  Definitions.--For the purposes of this act,

  4  the following terms have the following meanings:

  5         (1)  BUSINESS.--The term "business" means a person or

  6  an entity engaged in providing goods or services in this

  7  state, but the term excludes any governmental agency or any

  8  agency of the legislative or judicial branch of state

  9  government.

10         (2)  DATE DATA.--The term "date data" means data that

11  contain dates or that contain both dates and times.

12         (3)  DIRECT ECONOMIC DAMAGES.--The term "direct

13  economic damages" includes only economic compensatory damages

14  that follow both immediately and necessarily from the failure

15  of the information technology products of a business or

16  governmental agency to be year-2000 compliant. The term

17  excludes special damages, incidental damages, and exemplary or

18  punitive damages.

19         (4)  GOVERNMENTAL AGENCY.--The term "governmental

20  agency" includes any agency of the executive branch of state

21  government or any political subdivision of the state as

22  defined in section 1.01, Florida Statutes, or any agency of

23  such a political subdivision.

24         (5)  INFORMATION TECHNOLOGY PRODUCT.--

25         (a)  The term "information technology product" includes

26  software, firmware, microcode, hardware, and equipment

27  containing embedded chips or microprocessors that create,

28  read, write, calculate, compare, sequence, or otherwise

29  operate on date data.

30         (b)  The "information technology products" of a

31  business or governmental agency are those that are owned,

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    Florida Senate - 1999               CS for CS for CS for SB 80
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  1  leased, or licensed by or under the exclusive control of the

  2  business or governmental agency and are used by it in

  3  providing its goods or services.

  4         (6)  YEAR-2000 COMPLIANT.--An information technology

  5  product is "year-2000 compliant" if the product, when used in

  6  accordance with its associated documentation or recommended

  7  user intervention, is capable of correctly processing,

  8  providing, and receiving date data, and will do so for all

  9  dates occurring between February 28, 1996, and  March 1, 2000,

10  when all other information technology products that are used

11  with the product properly exchange date data with it. An

12  information technology product does not fail to be year-2000

13  compliant merely because it contains a defect that is

14  unrelated to the manner in which the product processes,

15  provides, or receives date data and that only incidentally

16  causes the product to fail to properly process, provide, or

17  receive date data. 

18         Section 3.  Exclusive remedies for failure to be

19  year-2000 compliant.--The exclusive remedies in this state for

20  recovering from a business or governmental agency damages

21  resulting from the failure of its information technology

22  products to be year-2000 compliant are those available for

23  breach of a contract with or a tariff filed by the business or

24  governmental agency; and all terms of that contract or tariff,

25  including limitations on and exclusions of liability and

26  disclaimers of warranty, remain fully enforceable and are

27  unaffected by the provisions of this act. If there is no

28  contract or tariff, the exclusive remedies in this state for

29  recovering from a business or governmental agency damages

30  resulting from the failure of its information technology

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    Florida Senate - 1999               CS for CS for CS for SB 80
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  1  products to be year-2000 compliant are those provided in

  2  section 4 of this act.

  3         Section 4.  Damages for failure to be year-2000

  4  compliant; mediation; limitation on class actions; statute of

  5  limitations.--

  6         (1)  Unless otherwise provided by a contract or tariff,

  7  any business may be liable only for direct economic damages

  8  caused by the failure of its information technology products

  9  to be year-2000 compliant, as provided in this section.

10         (2)  Unless otherwise provided by a contract or tariff,

11  any governmental agency may be liable only for direct economic

12  damages caused by the failure of its information technology

13  products to be year-2000 compliant, and only within the limits

14  on the waiver of sovereign immunity established in section

15  768.28, Florida Statutes.

16         (3)  The provisions of section 768.81, Florida

17  Statutes, apply to the award of damages under this section.

18         (4)  Damages awarded under this section shall exclude

19  any damages that the plaintiff:

20         (a)  Could have avoided or mitigated with the exercise

21  of reasonable care; or

22         (b)  Could have reasonably avoided or mitigated as a

23  result of any written or otherwise communicated disclosure

24  actually made by the defendant before December 1, 1999, in a

25  manner consistent with that used in the past to give

26  notifications to the plaintiff or persons similarly situated,

27  concerning whether any of the information technology products

28  of the business or governmental agency was year-2000

29  compliant.

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    Florida Senate - 1999               CS for CS for CS for SB 80
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  1         (5)(a)  A business or governmental agency is not liable

  2  for direct economic damages if it proves by a preponderance of

  3  the evidence that it has:

  4         1.  Secured an assessment, by a person who possesses

  5  the technical skills, experience, or competence with respect

  6  to information technology resources to evaluate information

  7  technology products for year-2000 compliance, to determine

  8  actions necessary to make the information technology products

  9  of the business or governmental agency year-2000 compliant

10  and, based on that assessment, holds before December 1, 1999,

11  a reasonable good-faith belief that those products are

12  year-2000 compliant;

13         2.  Before December 1, 1999, conducted a date-data test

14  of its information technology products and as a result of such

15  test has a reasonable good-faith belief that they are

16  year-2000 compliant; or

17         3.  Made reasonable efforts to assess whether the

18  entities on whose goods or services it relies and with whom it

19  is in privity have provided information technology products

20  that are year-2000 compliant and, with respect to each such

21  entity, either:

22         a.  Holds before December 1, 1999, a reasonable

23  good-faith belief, based on the response to inquiries or on

24  research, that the entity has provided information technology

25  products that are year-2000 compliant; or

26         b.  Discloses in writing to the other party before

27  December 1, 1999, in a manner consistent with that used in the

28  past to give written notifications to that party, that the

29  entity has provided information technology products that are

30  presumed not to be year-2000 compliant or that, based on the

31  response to inquiries, the entity is making reasonable

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    Florida Senate - 1999               CS for CS for CS for SB 80
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  1  good-faith efforts to make its information technology products

  2  become year-2000 compliant.

  3         (b)  All defenses that would otherwise be available to

  4  a business or governmental agency in any other action,

  5  including an action based on negligence, remain available with

  6  respect to an action under this section. Moreover, the failure

  7  of a business or governmental agency to comply with paragraph

  8  (a) shall not create a presumption of liability and no

  9  inference may be drawn from such failure.

10         (6)  Beginning January 1, 2000, upon the filing of any

11  lawsuit or the presentation of a claim for arbitration under

12  section 7 of this act seeking damages under this section, and

13  prior to the filing of an answer or response, the court having

14  jurisdiction shall refer the claim to mediation under section

15  44.102, Florida Statutes, unless the court determines that the

16  interests of justice would not be served. The time to file the

17  answer or response shall be tolled for up to 60 days after

18  service of process on the defendant or until the conclusion of

19  the mediation, whichever is earlier.

20         (7)  A class action may not be maintained in this

21  state:

22         (a)  Against a governmental agency for damages caused

23  by the failure of its information technology products to be

24  year-2000 compliant.

25         (b)  Against a business for damages caused by the

26  failure of its information technology products to be year-2000

27  compliant, unless each member of the class has suffered direct

28  economic damages in excess of $50,000.

29         (8)  Any action for damages under this section must be

30  commenced on or before March 1, 2002, but the running of this

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    Florida Senate - 1999               CS for CS for CS for SB 80
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  1  time is tolled from the date any offer is made to submit the

  2  claim to mediation until the conclusion of mediation.

  3         Section 5.  Immunity from liability for directors and

  4  officers of businesses.--

  5         (1)  A director or officer of a business has absolute

  6  and complete immunity from personal liability for any damages

  7  resulting from the failure of the information technology

  8  products of the business to be year-2000 compliant if the

  9  officer or director has either instructed the business or

10  received written assurance from another officer or director

11  that the business has been instructed to:

12         (a)  Take steps to determine whether those products are

13  year-2000 compliant;

14         (b)  Develop and implement a plan to take actions

15  necessary to make those products year-2000 compliant; and

16         (c)  Inquire whether the information technology

17  products of the entities on whose goods or services the

18  business relies are year-2000 compliant.

19         (2)  A director or officer who does not have absolute

20  and complete immunity from personal liability under subsection

21  (1) nevertheless has immunity from personal liability to the

22  extent provided in chapter 607, Florida Statutes, or chapter

23  617, Florida Statutes.

24         Section 6.  Antitrust exemption with respect to

25  exchanges of information.--The exchange of information among

26  businesses concerning measures that have been taken or are to

27  be taken in order for a business to make its information

28  technology products year-2000 compliant does not constitute an

29  activity or conduct in restraint of trade or commerce under

30  chapter 542, Florida Statutes.

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    Florida Senate - 1999               CS for CS for CS for SB 80
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  1         Section 7.  Alternative dispute-resolution

  2  procedures.--

  3         (1)  VOLUNTARY BINDING ARBITRATION.--

  4         (a)  Any party to a dispute under this act for which

  5  there is no prior arbitration agreement may, before a lawsuit

  6  has been filed, make an offer to the other party to submit the

  7  dispute to voluntary binding arbitration under section 44.104,

  8  Florida Statutes. An offer made under this paragraph must set

  9  out the maximum amount of damages that may be imposed pursuant

10  to arbitration.

11         (b)  If at trial, the court finds that an offer was

12  made under paragraph (a) and was rejected, the court shall

13  award attorney's fees and costs in accordance with this

14  paragraph.

15         1.  If the offer was made by the plaintiff and rejected

16  by the defendant, and if the defendant is ultimately found to

17  be liable for damages in an amount equal to or exceeding that

18  specified in the plaintiff's highest offer, the defendant must

19  pay the plaintiff's costs and reasonable attorney's fees.

20         2.  If the offer was made by the defendant and rejected

21  by the plaintiff, and if the plaintiff is not ultimately

22  awarded damages in an amount exceeding that specified in the

23  defendant's highest offer, the plaintiff must pay the

24  defendant's costs and reasonable attorney's fees.

25         (2)  MEDIATION.--

26         (a)  The court may submit a claim for damages under

27  this act to mediation pursuant to section 44.102, Florida

28  Statutes.

29         (b)  A party may serve its last best offer made in

30  mediation upon another party as an offer of judgment under

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    Florida Senate - 1999               CS for CS for CS for SB 80
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  1  section 678.79, Florida Statutes, and may make use of all the

  2  rights and remedies provided by this section.

  3         (c)  The court shall have discretion to require that

  4  the costs of mediation be shared equally by the parties.

  5         Section 8.  Securities actions.--If an action based on

  6  a year-2000 statement is brought under the securities laws, as

  7  that term is defined in Section 3(a)(47) of the Securities

  8  Exchange Act of 1934, 15 U.S.C. 78c(a)(47), or based on any

  9  document or material filed with the Securities and Exchange

10  Commission, or with federal banking regulators, pursuant to

11  Section 12(i) of the Securities Exchange Act of 1934, 15

12  U.S.C. 781(i), or any disclosure or writing that when made

13  accompanied the solicitation of an offer or sale of

14  securities, the maker of that year-2000 statement is not

15  liable under state law with respect to that statement unless

16  the claimant establishes, in addition to all other requisite

17  elements of the applicable action, that the statement was

18  material and:

19         (1)  To the extent that the statement was not a

20  republication of a year-2000 statement originally made by a

21  third party, that the maker made the statement:

22         (a)  With actual knowledge that it was false,

23  inaccurate, or misleading;

24         (b)  With intent to deceive or mislead; or

25         (c)  With a reckless disregard as to its accuracy; or

26         (2)  To the extent that the statement was a

27  republication of the year-2000 statement originally made by a

28  third party, that the maker of the republication made the

29  statement:

30         (a)  With actual knowledge that it was false,

31  inaccurate, or misleading;

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    Florida Senate - 1999               CS for CS for CS for SB 80
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  1         (b)  With intent to deceive or mislead; or

  2         (c)  Without notice because:

  3         1.  The maker has not verified the contents of the

  4  republication; or

  5         2.  The maker is not the source of the republished

  6  statement, the republished statement is based on information

  7  supplied by another person or entity, and the notice or

  8  republished statement identifies the source of the republished

  9  statement.

10         Section 9.  Construction of act.--This act shall not be

11  construed to create a new cause of action or a duty to provide

12  notice concerning year-2000 compliance nor be construed to

13  mandate the content or timing of any notice concerning

14  year-2000 compliance.

15         Section 10.  Section 282.4045, Florida Statutes, as

16  created by section 4 of chapter 98-331, Laws of Florida, is

17  repealed.

18         Section 11.  If any provision of this act or the

19  application thereof to any person or circumstance is held

20  invalid, the invalidity does not affect other provisions or

21  applications of the act which can be given effect without the

22  invalid provision or application, and to this end the

23  provisions of this act are declared severable.

24         Section 12.  This act shall take effect upon becoming a

25  law.

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    Florida Senate - 1999               CS for CS for CS for SB 80
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  1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
  2                          CS/CS/SB 0080

  3

  4  Adds language specifying that a business or governmental
    entity may not be liable for direct economic damages if, among
  5  other things, they hold a reasonable good-faith belief that
    the information technology products they rely upon are
  6  year-2000 complaint.

  7  Eliminates the section on confidentiality of information
    provided to solution providers and the remedies available for
  8  the unlawful use of and disclosure of such confidential
    information.
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