§6604 Punitive Damages Limitations

Summary

Limits how punitive damages work in Y2K lawsuits. If the law allows punitive damages, the plaintiff must prove by clear and convincing evidence that the standard for awarding them has been met before a defendant can be held liable. For individuals with a net worth of $500,000 or less, or for unincorporated businesses, partnerships, corporations, associations, or organizations with fewer than 50 full-time employees, punitive damages are limited to the smaller of three times the compensatory damages awarded or $250,000. That cap does not apply if the plaintiff proves by clear and convincing evidence that the defendant acted with specific intent to injure the plaintiff. Punitive damages may not be awarded against government entities. Colleges and universities are also generally protected, unless the Y2K failure happened in the school’s computer-based student financial aid system and the school either passed Department of Education Y2K data exchange testing or was not doing such testing when the Department stopped.