Y2K Settlement Reached

A settlement valued at $110 million, plus attorneys' fees, was approved by the Honorable Tod J. Kaufman, Judge of the Circuit Court of Kanawha County, West Virginia, on July 27, 2004.

All persons and/or business entities who sustained losses as a result of purchasing or leasing Y2K non-compliant products who filed claims have either been paid or are in the process of being paid out of the settlement funds.

What is Y2K?
Y2K is short for "the year 2000." The term came into vogue in the late 1990's, when members of the media began to publish stories about various computer systems which would crash or malfunction on New Year's Eve 1999/New Year's Day 2000. Computer products that were thought to fail, in whole or in part, were labeled as "Y2K non-compliant."

What caused computer systems or products to be Y2K non-compliant?
Those computer products which were date sensitive; i.e., required accurate dates to function, such as voice mail, call accounting, etc., relied upon computer chips which were only set up to record dates up to and including December 31, 1999. This date system format relied upon the dd/mm/yy format to function. In other words, older systems with this date format could only record events ranging from 01/01/01 to 31/12/99. To accurately record events falling in the year 2000 and thereafter, four placeholders were necessary to keep track of the right century; e.g., yyyy. Systems that did not have this date format would fail, in whole or in part, come the year 2000.

Who made these products?
Virtually every manufacturer of a computer-assisted device in the United States manufactured these Y2K defects into their computer chips, save one or two fore-thinking manufacturers.

What did manufacturers do about the Y2K problem?
In most instances, thoughtful manufacturers eventually realized that they had created computer chips with the Y2K defect in it, and sought to cure the potential problems long before the year 2000 arose. In many instances, manufacturers provided free fixes for the Y2K problem to make their products Y2K compliant, or they provided new products free of charge to end users.

What did Lucent/AT&T/Avaya do?
AT&T and its successors manufactured numerous non-Y2K compliant telecommunications products up to and including the year 1998. In 1996, AT&T spun off a separate corporate entity known as Lucent Technologies, to manufacture telecommunications products, which, in some instances, continued to have the Y2K defect imbedded in them. Eventually, Avaya, Inc. was spun off from Lucent, which continued the legacy of AT&T and Lucent products. AT&T, Avaya, and Lucent Technologies claimed that it was not their responsibility to correct the Y2K defects, but instead indicated that it was a global unseen problem for which they were not responsible.

What harm could have been done had the products not been made Y2K compliant?
Products which were date-time sensitive would fail, in whole or in part, come the year 2000, thereby potentially causing equipment to fail, messages not to be taken, mainframe computers to crash, etc., thereby losing valuable data, etc.

What kind of litigation was filed?
Three different lawsuits were filed nationwide, requesting certified nationwide class actions involving this litigation: A lawsuit was filed in federal court in California, and lawsuits were filed in state courts in West Virginia and New York. Eventually, two nationwide class actions were certified in West Virginia and California. It was eventually agreed between the law firms handling these cases to centralize the litigation in the state of West Virginia. The litigation that proceeded in West Virginia involved a nationwide class action (the first nationwide class action certified by a West Virginia state court) seeking damages from Lucent Technologies, Inc., AT&T Corp., and Avaya, Inc., to reimburse business entities for correcting the Y2K defect. In the summer of 2004, a settlement was reached, whereby the defendants agreed to provide credits and/or a cash alternative to all business entities in the United States and its territories, who purchased, leased, or financed Y2K non-compliant telecommunications products from defendants. All individuals nationwide were given the opportunity to opt out of the nationwide class action if they felt that the settlement was inappropriate or unfair, but no one did, and all agreed to accept the terms of the settlement. The time period for filing claims in this litigation terminated as of October 18, 2004. Claims payments will be processed in the months to come.

What was the role of Hill, Peterson, Carper, Bee & Deitzler, P.L.L.C., in the Y2K litigation?
We were one of five law firms nationwide who joined together for the common benefit of our Y2K clients. This case involved over 85,000 businesses nationwide, all of whom agreed to remain in the class, and agreed to the terms and conditions of the settlement. HPCBD did the lion's share of all discovery and depositions, including the prosecution of this case in the Circuit Court of Kanawha County, West Virginia, through to the settlement of the case.