State & Local News Vol. 22, No. 3, Spring 1999 Preparing for the Y2K Challenge By Kurt Schmoke In the midst of the uncertainty surrounding the "Y2K glitch" or "millennium computer bug," one thing is certain-our society is computer dependent. Modern technology is a complex web of electronic relationships. People rely on computers, and computers themselves are dependent upon other computers. No single issue facing our modern society highlights this interconnectedness and interdependence more than the Y2K challenge. We have come to depend on technology for some of our most basic needs, yet we often take for granted that this technology will not fail us. Now, as we face possible widespread disruption of the world’s technological systems, we have to rely on human creativity and cooperation to solve any problems that may arise. Typically, lawmaking is reactive rather than proactive. We make laws to address problems that we can already see. However, Y2K requires us to imagine the potential effects of a problem which society has never had to face. Both the public and private sector must be prepared for any problem that arises and, here in Baltimore, I have taken several steps to make sure the city government proactively addresses the Y2K challenge. The primary concern for local government is preventing any interruption of vital services. Since 1994, Baltimore’s Management Information Systems section has been actively engaged in a program to bring all the city’s critical tax collection, accounting, disbursement, and payroll systems into Y2K compliance. The city continues to work closely with the State of Maryland, the banking community, and other entities involved with us in electronic data exchange to insure coordination and compatibility throughout our Y2K conversion efforts. I have formed an Information Technology Board composed of representatives from every agency of Baltimore City government to see that we make all of the modifications necessary to allow for uninterrupted city services. Nevertheless, until January 1, 2000, we cannot know if we have done enough to entirely prevent system failures. Despite due diligence, local governments and the private sector both face the difficult problem of updating embedded systems, where software is contained within hardware. In addition, it is impossible for us to determine the extent to which we will be affected by outside entities that have done nothing to correct their systems. Legislation may be incapable of making technological corrections, but it can help foster cooperation and creative problem solving by providing protection from liability for those who are working to address the Y2K challenge. Where local government is concerned, balance is necessary-a balance between immunity and responsibility. Local government should be afforded some immunity where it has shown that it has taken actions to address the problem. Legislation related to the Y2K problem should not solely protect the government from litigation. Rather, it should protect and foster the government’s efforts to correct the programming problems. Where the government has taken no action, it should take responsibility for losses caused by technological system problems. In January 1998, Congress passed the Year 2000 Information and Readiness Disclosure Act1 to encourage disclosure and exchange of information about computer processing problems, solutions, test practices, and test results. Congress recognized that concern from public and private entities about the potential for liability associated with disclosure and exchange of year 2000 readiness information was impeding the disclosure and exchange of such information. This Act was passed for the purpose of giving public and private entities the capability to freely disseminate and exchange information relating to year 2000 readiness without undue concern about litigation. The Act creates a qualified immunity from liability for statements concerning measures taken by an entity to prepare for year 2000 problems and when those measures will become effective. The Act provides that no year 2000 readiness disclosure statement shall be admissible in a civil action in federal or state court to prove the truth of the matters contained in the statements. The Act does not afford protection from the failure to diagnose or to correct a year 2000 problem or the tortious or contractual effects of a year 2000 problem. Baltimore City has taken advantage of the opportunity provided by the Act and has posted disclosure statements on its webpage. We will continue to facilitate the free flow of information concerning the city’s Y2K readiness. I support two bills that have been introduced in the Maryland State Legislature and that would provide some protection from Y2K-related lawsuits. The first bill proposes the Year 2000 Commerce Protection Act2to limit the liability of persons and government entities for damages caused by the person or government’s failure to be year-2000 ready. This bill limits recovery to compensatory damages available only where the failure to be year-2000 ready is the proximate cause of the damages. The bill provides that the compensatory damages shall exclude any damages that the plaintiff should have avoided as a result of any disclosure made to the plaintiff before December 1, 1999. An important aspect of this bill is that it creates an affirmative defense if the person or governmental entity exercised due diligence to ensure that it was year-2000 ready. This measure would help to address the problem of difficult-to-identify embedded systems and other yet to be determined aspects of the Y2K glitch. The second bill proposed in Maryland3 provides immunity specifically for state and local governments. This bill would make a state or local government immune from suit and liability for damages arising out of a "date data problem" if the state or local government has published and implemented a compliance plan. The compliance plan must be a written plan to inventory, assess, and schedule repairs and remediation of date data problems in information technology systems and products. Governments must be careful not to use immunities granted by legislation as an opportunity to cease cooperative efforts to help solve this problem. The government is an important partner in an effort that requires the participation of the entire community. Citizens will continue to need government services. The Y2K challenge requires local government to be as highly committed and resourceful as we have demonstrated we can be in our past responses to natural disasters and other emergencies. This challenge may require an unprecedented level of cooperation between government and citizens as we face the possible disruption of the infrastructure of modern life. At the same time, it presents an unprecedented opportunity to transform the relationship between citizens and government to one of true partnership. Kurt Schmoke is the mayor of Baltimore, Maryland. Endnotes 1. S. 2392, 105th Cong. (1998)(enacted). 2. H.B. 8, 1999 Sess. (Md. 1999). 3. S.B. 232, 1999 Sess. (Md. 1999) State & Local Law News home page | Table of Contents