Chapter 53 - Y-2K Compliance

Chapter 53 - Y-2K Compliance

43.5301 Definitions.

As used in this chapter, unless the context clearly requires otherwise:

(1) “Y-2K error” is the failure of a computer-based system to accurately store, display, transmit, receive, process, calculate, compare, or sequence date and time data from , into, or between the twentieth and twenty-first centuries, the years 1999 and 2000 and beyond, and leap year calculations.

(2) “Computer-based system” includes any computer or other information technology system, and any electronic device that controls, operates, monitors, or assists in the operation or functioning of equipment, machinery, plant, or a device using an embedded or installed microprocessor or chip.

(3) “Consumer” means a natural person who, primarily for personal, family, or household purposes, purchases, attempts to purchase, or is solicited to purchase goods or services.

(4) “Core activities” means those business activities of a person which are supported by computer-based systems and which have been identified by the person, based on reasonable internal criteria, as being central to the continued operation of the business.

(5) “Remediation steps” for a person addressing potential Y-2K errors generally consist of awareness, assessment, renovation, validation, and implementation. The reasonableness of those steps will be determined by the circumstances, including the sophistication of and resources available to the person carrying them out.

(A) The awareness step generally includes providing supervisory personnel with information about the Y-2K problem and the designation of personnel to deal with the potential for Y-2K errors.

(B) The assessment phase generally includes a determination of the impact of potential Y-2K errors on the person (including those caused by computer-based systems controlled by the person and those controlled others), identification of core activities, a physical inventory of potentially affected computer-based systems supporting core activities, prioritization of items with potential Y-2K errors to create a remediation schedule, determining whether the item records dates or processes date information, identifying and obtaining resources to address potential Y-2K errors, the development of a remediation strategy for each item with the potential for Y-2K errors, and the development of a recovery plan to handle those Y-2K errors which are reasonably likely to occur.

(C) The renovation step generally includes the conversion, upgrade, replacement, or elimination of computer-based systems supporting core activities which are subject to

Y-2K errors.

(D) The validation step generally includes validating existing, converted, or replaced computer-based systems supporting core activities, “validating” means:

(i) Testing the item to actually simulate the transition from December 31, 1999 to January 1, 2000, the processing of other date data which may reasonably be expected to trigger a Y-2K error, and a determination that no Y-2K error occurs; and

(ii) Where the item has been renovated to correct known or suspected Y-2K errors, testing to assure that the item continues to properly perform its functions without error. This testing is not reasonably possible, the validation step consists of securing documentation from the developer or vendor of a computer-based system supporting core activities that it is free of potential Y-2K errors. This includes vendors of core business functions, services, or supplies to understand the risk posed by the person’s supply chain.

(E) The implementation step generally includes the placing of renovated or replaced computer-based systems into production use. Where a computer-based system cannot reasonably be renovated, the implementation step generally includes the implementation of a work-around designed to avoid the effect of the potential Y-2K errors. Additionally, this step includes the implementation of contingency or recovery plans for those Y-2K errors which are reasonably likely to occur. Where applicable, the person’s highest level of management should determine what efforts are to be made and what resources are to be used in carrying out the remediation steps, and monitoring the progress of the remediation steps.

(6) “Claimant” is the plaintiff in a lawsuit or a person otherwise asserting a claim.

(7) “Respondent” is the defendant in a lawsuit or a person otherwise defending against a claim, and includes those persons who are liable on a claim, but who were not made a party to the lawsuit or other assertion of the claim.

(8) “Board” means any agency, board, commission, authority, or committee of the American Samoa Government or its political subdivisions that is created by constitution, statute, rule, or executive order to have supervision, control, jurisdiction, or advisory power over specific matters.

(9) “Government employee” includes an officer or employee of the ASG, or board, including a person acting on behalf of a board in an official capacity, temporarily or permanently, whether with or without compensation.

(10) “Joint tort-feasors” refers to two or more persons jointly or severally liable in tort for the same injury to person or property.

43.5302 Applicability.

(a) The following claims shall be excluded from the error dispute resolution process and the limitations on liability provisions contained in sections 43.5303 and 43.5304: Claims properly filed by consumers in the small claims division of the District Court.

(b) The following claims shall be excluded from the error dispute resolution process provisions contained in section 43.5305: Claims alleging physical injury as the direct and proximate result of a Y-2K error.

(c) The provisions in this chapter shall not apply to claims asserted by or against the American Samoa Government, a board, or a government employee, arising out or relating to a Y-2K error produced, calculated, or generated by a government computer system or other computer-based system, regardless of the cause for the Y-2K error, provided that nothing in this subsection shall be deemed to apply to any claim asserted against a government employee to enforce a mortgage obligation or other similar personal obligation of the government employee which is unrelated to the government employee’s employment.

(d) The provisions in sections 43.5303 and 43.5304 may be modified or waived by express agreement. Any such modification or waiver shall be explicit, and no intent to modify or waive these protections shall be inferred.

43.5303 Blanket protections.

(a) No punitive or exemplary damages, and no statutory minimum or treble damages shall be awarded under any theory of recovery, including contract and tort law, for claims arising out of a Y-2K error unless one of the following is found to have occurred in addition to the other facts necessary for the award of such damages:

(1) The Y-2K error was intentionally created by the respondent with the intent to cause damage or injury:

(2) The respondent had entered into an agreement to discover or remedy Y-2K errors with the intent to defraud the claimant; or

(3) The damage o injury was caused by the dissemination of corrupted data to recipients:

(A) With actual knowledge that errors were occurring;

(B) Without reasonable efforts at warning; and

(C) Without reasonable efforts to correct the cause of the errors.

(b) Noneconomic damages (including, but not limited to, physical and emotional pain, suffering, physical impairment, emotional distress, mental anguish, disfigurement, loss of enjoyment, loss of companionship, services, and consortium, and other nonpecuniary losses) shall not be awarded under any theory of recovery for any claim arising out of a Y-2K error except for physical injury directly and proximately caused by a Y-2K error. In any physical injury claim, the amount recoverable for noneconomic damages shall be limited to a maximum award of $375,000.

(c) Joint tortfeasors shall not be held jointly and severally liable under any theory of recovery for any claim arising out of a Y-2K error.

43.5304 Limitation of actions.

Any other provision of law notwithstanding, all claims arising out of a Y-2K error shall be brought no later than two years after the claimant discovers, or through the use of reasonable diligence should have discovered, the damage or injury, but in any event not more than four years after the date of the alleged Y-2K error.

43.5305 Error dispute resolution requirement.

(a) Arbitration of disputes. At the request of any party, any dispute in which a Y-2K error is alleged in good faith as a claim or a defense shall be submitted to nonbinding arbitration. Unless otherwise agreed by the parties, the arbitrator shall be bound by the substantive and procedural provisions of this chapter, but shall not be bound by rules of evidence, whether or not set out by statute, except for provisions relating to privileged communications. The arbitrator shall permit discovery as provided for in the American Samoa rules of civil procedure; provided that the arbitrator may restrict the scope of such discovery for good cause to avoid excessive delay and costs to the parties.

(b) Determination of unsuitability. At any time within twenty days of being served with a written demand for arbitration, any party so served may apply to the High Court for a determination that the subject matter of the dispute is unsuitable for disposition by arbitration. In determining whether the subject matter of a dispute is unsuitable for disposition by arbitration, a court may consider:

(1) The magnitude of the potential award, or any issue of broad public concern raised by the subject matter underlying the dispute;

(2) Claims where court regulated discovery is necessary;

(3) The fact that the matter in dispute is a reasonable or necessary issue to be resolved in pending litigation and involves other matters not covered by or related to this chapter;

(4) The fact that the matter to be arbitrated is only part of a dispute involving other parties or issues which are not subject to arbitration; or

(5) Any matters of dispute where disposition by arbitration would not afford substantial justice to one or more of the parties.

(c) Any such application to the High Court shall be made and heard in a summary manner and in accordance with procedures for the making and hearing of motions. If the application is denied, the prevailing party shall be awarded its attorneys’ fees and costs in an amount not to exceed $750.

(d) Selection of arbitrator:

(1) Once the parties have agreed to suitability or suitability has otherwise been determined, the parties shall proceed to select one arbitrator to hear the case. If the parties cannot agree on an arbitrator, they shall make a request in writing to the High Court of American Samoa shall appoint an arbitrator. The parties and court shall endeavor to select the best qualified arbitrator for the issues to be tried, which arbitrator need not be an attorney. The parties may also select an administering agency such as the American Arbitration Association, at the discretion of the parties.

(2) Once selected, the arbitrator and parties shall cooperate to process the arbitration expeditiously and as informally as possible so that the arbitration hearing commences within six months after selection of the arbitrator. The arbitrator shall have the power and authority to sanction any party who does not so cooperate.

(3) The parties shall deposit the estimated fee and expenses of the arbitrator prior to the commencement of the arbitration hearing in equal pro rata amounts.

(e) Award; confirming award; attorney’s fees and costs:

(1) Within seven days after the conclusion of the arbitration hearing, the arbitrator shall serve copies of the award on the parties or their attorneys of record. Awards shall be in writing and signed by the arbitrator. The arbitrator shall determine all issues raised by the pleadings that are subject to arbitration under this chapter, including a determination of comparative fault, if any, damages, if any, and costs. Findings of fact and conclusions of law are not required. After an award is made, the arbitrator shall return all exhibits to the parties who offered them during the hearing.

(2) The award of any costs of arbitration, expenses, and legal fees shall be in the sole discretion of the arbitrator, and the determination of costs, expenses and legal fees shall be binding upon all parties.

(f) Judgment on award. If no party has served a written request for a trial de novo within ten days after the award is served upon all parties, any party may apply under Title 43 to have a judgment entered on the award. Once a judgment is so entered, it shall have the same force and effect as a final judgment, but may not be appealed.

(g) Trial de novo:

(1) The submission of any dispute to arbitration shall in no way limit or abridge the right of any party to a trial de novo.

(2) Written demand for a trial de novo by any party desiring a trial de novo shall be made upon the other parties within ten days after service of the arbitration award upon all parties.

(3) All discovery permitted during the course of the arbitration proceedings shall be admissible in the trial de novo subject to all applicable rules of civil procedure and evidence.

(4) The award of arbitration shall not be made known to the court at a trial de novo, except that the award shall be made available to the court by the clerk of court upon the rendering of judgment by the trier of fact for the purpose of determining whether the party which demanded trial de novo must pay costs, expenses, and fees under paragraph 6.

(5) No arbitration award shall be admitted into evidence in any subsequent trial, nor shall any party to the arbitration, or the counsel or other representative of such party, refer to or comment on the award or any statement or testimony made in the course of the arbitration hearing in an opening statement, an argument, or at any other time, to the court or jury.

(6) In any trial de novo, if the party demanding a trial de novo does not improve its position by thirty per cent or more, the party demanding the trial de novo shall be charged with all reasonable costs, expenses, and attorneys’ fees of the trial. When there is more than one party on one or both sides of an action, or more than one issue in dispute, the court shall allocate its award of costs, expenses, and attorneys’ fees among the prevailing parties and tax such fees against those losing parties who demanded a trial de novo in accordance with the principles of equity.

43.5306 Limitation of liability.

(a) Determination of commercially reasonable efforts by claimant and respondent. All arbitration awards and all judgments in a court proceeding which award damages on a claim arising out of a Y-2K error shall state whether the claimant and the respondent engaged in commercially reasonable efforts to avoid the impact of Y-2K errors.

(b) The trier of fact shall make an independent determination that the actions taken by a claimant or respondent constitute commercially reasonable efforts, based on the totality of the circumstances, and notwithstanding that the party’s efforts failed to avoid all Y-2K errors affecting its computer-based systems. In making the determination, the trier of fact shall examine the party’s efforts as a whole, and shall take into consideration the sophistication of any resources available to the party. The burden of proof shall be on the party claiming that it engaged in commercially reasonable efforts, and the standard of proof shall be a preponderance of the evidence.

(c) A claimant or respondent shall be presumed to have undertaken commercially reasonable efforts if it has, at minimum:

(1) Implemented the remediation steps; and

(2) Complied with any data formats established by a government regulation, a governing body (such as the National Automated Clearing House Association for certain financial transactions) or reasonably requested by the other party where the parties exchange electronic information which was impacted by the alleged Y-2K error.

(d) Effect of finding. Except for claims where physical injury was directly and proximately caused by a Y-2K error, upon a finding that either:

(1) A claimant did not engage in commercially reasonable efforts; or

(2) The respondent engaged in commercially reasonable efforts, the respondent’s liability will be limited to recovery of the claimant’s actual out-of-pocket damages directly caused by the Y-2K error, and no consequential damages, such as loss of business opportunities or loss of profits, or other special damages shall be awarded under any theory of recovery.

(e) Allocation of liability based on exercise of commercially reasonable efforts. The amount awarded to any claimant will be reduced to the extent that the claimant’s failure to engage in commercially reasonable efforts contributed in whole or part to the damages sustained. Where two or more respondents are found liable for the claimant’s damages, the proportion of liability assessed against each respondent will be proportionately adjusted based on the extent to which it engaged in commercially reasonable efforts.

43.5307 Effect on insurance.

Nothing in this act is intended to affect the indemnity and defense coverage rights and obligations under any contract of insurance.

43.5308 No intent to create causes of action.

This act shall not be deemed to impose any increased obligation, duty, or standard of care than is otherwise applicable under federal or American Samoa law. It is not intended to create any new cause of action or remedy.

43.5309 Remedial intent

The intention of this act is to protect the people of American Samoa against harm which is pervasive and which was generally unknown to businesses and consumers. For that reason, its provisions are remedial, and shall be read to provide the greatest level of protection.

43.5310 Severability.

If any provision of this act, or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the act which can be given effect without the invalid provision or application, and to this end the provisions of this act are severable.

43.5311 Preemption.

If any portion of this act is found to be preempted by federal law or regulation, the remainder shall remain in full force and effect to the fullest extent consistent with the preemption.