Year 2000 issue draws first lawsuit

A Michigan produce store has filed what is believed to be the first 2000-related lawsuit because its cash registers freeze when customers use credit cards with 2000 expiration dates. Produce Palace International in Warren, Michigan, is suing Tec-America in Atlanta and local service vendor All American Cash Register in Inkster, Michigan, claiming the companies sold a defective computer system they knew they couldn't fix.

A Michigan produce store has filed what is believed to be the first 2000-related lawsuit because its cash registers freeze when customers use credit cards with 2000 expiration dates.

Produce Palace International in Warren, Michigan, is suing Tec-America in Atlanta and local service vendor All American Cash Register in Inkster, Michigan, claiming the companies sold a defective computer system they knew they couldn’t fix.

The lawsuit asks for about $US100,000 in damages for the cost of the system and tens of thousands of dollars for lost business.

The Produce Palace suit features two particularly interesting issues, says attorney Dean Morehouse. “It involves relatively recent hardware and software, and that debunks the myth that the year 2000 problem applies only to legacy and mainframe systems,” he says. “The other is there’s an allegation that there was a misrepresentation [about] whether the system could be made year 2000-compliant. That’s a serious claim to make, and other vendors may have to deal with those types of claims,” Morehous says.

The suit debunks one other myth, says Tactical Strategy Group president William Ulrich. “Most people assume when the lawsuits start flying it’s the Fortune 500 company suing the big systems integrators or other Fortune 500 companies,” he says.

In the Michigan suit, the store owners claim that their computer, installed in 1995, has crashed more than 100 times, rendering 10 cash registers useless during the crashes, says Produce Palace attorney Brian Parker.

“Someone fills the cart up, comes to the cash register and finds their card is rejected,” Parker says. “The store owners lose the customers for the rest of their business life.”

Visa US stopped producing cards with the year 2000 expiry date last year when businesses had trouble processing them, analysts say.

MasterCard says fewer than 1% of its 400 million cardholders have cards that expire in 2000. Visa and MasterCard are testing to make sure card readers are 2000-compliant.

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