January 4, 2011
Time to Reinstate the FTC’s Guidelines for the Law Book Publishing Industry
By now, most of the law library profession has heard about the case of Rudovsky v. West Publishing Corp. (E.D. Pennsylvania, No. 09-cv-000727-JF), in which Professors David Rudovsky (University of Pennsylvania) and Leonard Sosnov (Widener Law School) received $5.2 million in compensatory and punitive damages for false light defamation. The case has resounded throughout the country because of the shady publication practices it describes.
Rudovsky and Sosnov were the authors of Pennsylvania Criminal Procedure: Law, Commentary and Forms. After the authors were unable to reach agreement over the terms of a new supplement, West issued the pocket part anyhow with the authors’ names. However, instead of the usual 150 new cases, the “sham update” contained only three new cases. This led the authors to sue West for false light defamation, claiming that their reputations would suffer because of the substandard “sham” pocket part. For a good overview of the case (and the bad decisions West made on the way to court), see, Raising the Bar for "Publisher's Staff" Content After Rudovsky?.
Law librarians have been upset for years about the practices of several legal publishers who issue expensive pocket parts (or even sometimes whole “new editions”) that contain nothing more than a handful of changes. This practice costs lawyers, firms, and libraries hundreds of thousands of dollars every year. Meanwhile, corporate profits are setting record highs. However, it was not always this way.
From 1975 to 2000, Federal Trade Commission regulated the practices of the legal publishing industry under the FTC’s Guidelines for the Law Book Publishing Industry, 40 Fed. Reg. 33436, as corrected, 40 Fed. Reg 36116. [Download Text of FTC Guidelines] These guidelines set out policies about fair dealing, supplements and updates, invoices, and other aspects of the law book industry. The guidelines grew out of a 1969 article in the ABA Journal by law librarian Raymond Taylor. See, Raymond M. Taylor, Law Book Consumers Need Protection, 55 A.B.A.J. 553 (1969)[Google Books]. Taylor’s article led to an FTC investigation and a combined lobbying effort by the American Association of Law Libraries and the American Bar Association, culminating in 1975 when the guidelines were issued. See also, Taylor’s follow-up article, New Protection for Law Book Users, 61 ABAJ 1373 (1975)[Google Books].
So from 1975 to 2000, lawyers and libraries were protected. However, these guidelines were repealed in 2000. This revocation was taken despite the fact that every single comment received by the public cited the necessity of these guidelines and recommended that they be continued. See, Final rule. Rescission of the Guides for the Law Book Industry.
The revocation notice stated that the guidelines were no longer necessary to curb abuses. However, since their revocation, we have seen exactly those same abuses over and over again, including the now-common practice of not providing open and competitive pricing for publications and databases. In fact, many license agreements include non-disclosure clauses that prevent the open sharing of information, a necessary condition to ensure competitive and anti-monopolistic contracts.
Some of the abuses Taylor detailed in 1969 included:
- Putting new titles and new binders on old materials (particularly looseleaf items);
- Including the same book in two different series;
- Overpricing supplements and issuing new editions rather than supplementing;
- Issuing misleading advertisements (particularly in terms of works designated as “new,” “revised,” or “enlarged”);
- Using unnecessarily expensive bindings and formats;
- Putting local names on books that are not truly local;
- Adding remotely related books to established sets to assure their automatic sale;
- Failing to advertise prices of major items;
- Failing to issue supplements for books that otherwise will soon be obsolete;
- Issuing treatises in looseleaf form; and
- Failing to put correct printing date on republished books.
A perusal of the law-lib archives just in the past 3 months will show plenty of recent examples of these very abuses. On December 22 alone, just as the discussion list was buzzing about Rudovsky v. West, a series of posts complained about a publisher not separating invoices for print and online service, and the same publisher refusing to provide 2011 prices for current subscriptions!, law-lib 2010-12 msg 00206 and msg00210.
The revocation notice invited associations such as the American Association of Law Libraries the American Association of Law Schools “to guides of their own.” In fact, the AALL took up the challenge by issuing its Guide to Fair Business Practices for Legal Publishers (2002). (Also, take a look at Greg Lambert’s post on 3 Geeks and a Law Blog.) The AALL guide deals with many of the same issues that were covered by the FTC guidelines—the very same abuses that are continually detailed on law-lib. So why can’t the AALL enforce its guidelines? The answer is because of antitrust law.
As I explained last year in my Legally Speaking article in Against the Grain, boycotts are illegal under the Sherman Antitrust Act, 15 U.S.C. §§ 1–7, because they are considered to be “concerted refusals to deal.” See, Bryan M. Carson, Legal Implications of Reference Books for Publishers and Consumers, 21 Against the Grain 50 (December 2009/January 2010); Herbert Hovenkamp, Exclusion and the Sherman Act, 72 University of Chicago Law Review 147 (Winter 2005) [JSTOR]; see also, [LAW-LIB:53983] Re: FW: [Lawlibdir] AALL censorship? (Nov. 7, 2007). Because of the anti-boycott provisions of the antitrust laws, there is no enforcement mechanism for these shoddy behaviors.
As a former law librarian who now works for a general university library, I have a foot in both camps. Although most publishers are honest, libraries of all types face issues related to defective, unethical, or downright fraudulent practices. While the need for current and updated information is greatest in law and medical libraries, other fields also need access to new materials. The same abuses exist on a smaller scale in fields such as engineering, business, and the sciences. Yet libraries have no power because of the antitrust provisions. We can’t band together to challenge these practices, as that would run afoul of the Sherman Act.
While law libraries and firms are on the front lines of these substandard practices, the issue reverberates throughout the broader library field. In these days of large publishing empires, vendors can charge what they want. Libraries simply have no choice but to either pay or cancel. In the general library world, this takes the form of serial cuts. But law and medical libraries simply have no choice. How can a law library get by without having access to the Federal Reporter? Publishers have us on the hook.
As noted in my Against the Grain article, the antitrust issue came to a head in 2009 with the publication of the 6th edition of the Publication Manual of the American Psychological Association. Although the style rules had changed, the manual still contained examples using the old rules (80 pages of errors!). The publisher initially refused to replace the defective work, but caved in after a Facebook and email campaign by Dr. John Foubert, a counseling professor at Oklahoma State University. However, Dr. Foubert and others (including me) had to be careful to avoid any language that might suggest a boycott. Similarly, AALL and other associations have very little in the way of remedies for publishers who don’t adhere to their fair dealing guidelines.
I believe that the time is now right for a reinstatement of the Guidelines for the Law Book Publishing Industry, perhaps in an expanded form that deals with medical and other fields that need current information. This may also be the time to seek an antitrust exemption for library associations. Currently large publishers have market power that allows them to set prices without serious negotiation. But books, journals, and databases are not interchangeable. They are not fungible items like bricks or nails. Allowing library associations to band together would give some teeth to AALL guidelines, and would also allow true bargaining in contract talks.
None of the formerly banned practices has been as egregious as the issuance of supplements or “new editions” that do not contain new material. Professors Rudovsky and Sosnov have struck a real blow for consumers of legal products by showing publishers that they can’t get away with misleading “updates.” I expect the punitive damages to be reduced—but that really isn’t the issue. The true meaning of this case is that authors and consumers both have an interest in ensuring that “new” means new, “supplement” means supplement, and quality is not an optional part of subscriptions.
Guest post by Bryan M. Carson, J.D., M.I.L.S., Ed.D., Special Assistant to the Dean for Grants & Projects/Coordinator of Reference & Instructional Services, Western Kentucky University Libraries.