§6604 — Title 15 Commerce and Trade | U.S. Code

Summary

Limits when punitive damages can be awarded in Y2K lawsuits. If punitive damages are allowed, the person suing must prove by clear and convincing evidence that the standard for giving them was met. For individuals with a net worth of $500,000 or less, and for small businesses or organizations with fewer than 50 full‑time employees, punitive damages are limited to the lesser of three times the compensatory award or $250,000. That limit does not apply if the person suing proves by clear and convincing evidence the defendant meant to injure them. Government entities cannot be hit with punitive damages. Colleges and universities are usually protected too, unless the Y2K problem was in their computer-based student financial aid system and the school either passed the Department of Education’s Y2K data-exchange testing or was not doing that testing when the Department stopped testing.

Title 15, §6604

Commerce and Trade — Source: USLM XML via OLRC

(a)In any Y2K action in which punitive damages are permitted by applicable law, the defendant shall not be liable for punitive damages unless the plaintiff proves by clear and convincing evidence that the applicable standard for awarding damages has been met.

(b)(1)Subject to the evidentiary standard established by subsection (a), punitive damages permitted under applicable law against a defendant described in paragraph (2) in a Y2K action may not exceed the lesser of—

(A)three times the amount awarded for compensatory damages; or

(B)$250,000.

(2)A defendant described in this paragraph is a defendant—

(A)who—

(i)is sued in his or her capacity as an individual; and

(ii)whose net worth does not exceed $500,000; or

(B)that is an unincorporated business, a partnership, corporation, association, or organization, with fewer than 50 full-time employees.

(3)Paragraph (1) does not apply if the plaintiff establishes by clear and convincing evidence that the defendant acted with specific intent to injure the plaintiff.

(c)Punitive damages in a Y2K action may not be awarded against a government entity.

(d)(1)Subject to paragraph (2), punitive damages in a Y2K action may not be awarded against an instituion 11 So in original. Probably should be “institution”. of higher education as defined in section 1001(a) of title 20.

(2)Paragraph (1) shall not apply to an institution of higher education if the Y2K failure in the Y2K action occurred in a computer-based student financial aid system of that institution of higher education, and the institution—

(A)has passed Y2K data exchange testing with the Department of Education; or

(B)is not or was not in the process of performing data exchange testing with the Department of Education at the time the Department terminates such testing.

Editorial Notes

Amendments

1999—Subsec. (d). Pub. L. 106–113 added subsec. (d).

§6604 Punitive Damages Limitations

Summary

Title 15, §6604

Notes & Related Subsidiaries

Editorial Notes

Amendments

Citations & Metadata