[Federal Register Volume 65, Number 12 (Wednesday, January 19, 2000)]
[Rules and Regulations]
[Pages 2867-2868]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-994]


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FEDERAL TRADE COMMISSION

16 CFR PART 256


Rescission of Guides for the Law Book Industry

AGENCY:  Federal Trade Commission.

ACTION:  Final rule.

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SUMMARY:  On March 18, 1999, the Commission published a Federal 
Register document initiating the regulatory review of the Federal Trade 
Commission's (``Commission'') Guides for the Law Book Industry (``Law 
Book Guides'' or ``Guides'') and seeking public comment. The Commission 
has now completed its review, and this document announces its decision 
to rescind the Guides and removes the Guides from the Code of Federal 
Regulations.

EFFECTIVE DATE:  January 19, 2000.

ADDRESSES:  Requests for copies of this notice should be sent to the 
Consumer Response Center, Room 130, Federal Trade Commission, 600 
Pennsylvania Avenue NW, Washington, DC 20580. The notice is available 
on the Internet at the Commission's website, http://www.ftc.gov.

FOR FURTHER INFORMATION CONTACT:  Edwin Rodriguez, Attorney, Federal 
Trade Commission, Division of Enforcement, 600 Pennsylvania Avenue NW, 
S-4302, Washington, DC 20580, (202) 326-3147, e-mail 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Introduction

    As part of the Commission's ongoing review of all current 
Commission rules and guides, the Commission published a Federal 
Register notice on March 18, 1999, 64 FR 13369, seeking comments about 
the Law Book Guides' overall costs and benefits, and the continuing 
need for the Guides. The Law Book Guides contain 17 sections that 
provide guidance regarding the sale of legal reference materials to the 
legal profession, law schools, and other consumers. The 17 sections 
cover practices ranging from the marketing of legal reference materials 
to consumers, to the supplementation of these materials, and billing 
practices employed by sellers, and specify detailed disclosures that 
should be made in direct mail promotional materials and oral 
representations soliciting the sale of legal reference materials.
    The Commission issued the Guides in 1975, 40 FR 33436, to assist 
the legal publication industry with compliance with section 5 of the 
Federal Trade Commission Act (``FTC Act''), 15 U.S.C. 45. The 
Commission issued the Guides following consideration of public comments 
submitted in response to a request from purchasers and their 
representatives, such as the American Association of Law Libraries. 
Earlier, Raymond M. Taylor, then Librarian for the North Carolina 
Supreme Court, had published an article detailing alleged abuses in the 
legal publishing industry.\1\ These abuses include practices such as 
putting new titles and new binders on old material, misrepresenting 
that certain publications are ``new'' or ``revised or enlarged,'' 
misrepresenting the jurisdictional application of publications, adding 
remotely related books to established sets to assure their automatic 
sale, failing to disclose prices, failing to issue supplements for 
publications that otherwise soon would become obsolete. The article 
suggested, among other things, that the Commission should prescribe 
appropriate practices that industry should follow in the publication, 
advertising, and sale of legal publications.
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    \1\ Raymond M. Taylor, Law Book Consumers Need Protection, 55 
A.B.A.J. 553 (1969).
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II. Comments Received

    The Commission received five comments in response to the Federal 
Register notice.\2\ All of the comments state that the Guides serve a 
useful purpose and that there is a continuing need for them. Four 
comments assert that there continue to be abuses or other problems in 
the legal publications industry,\3\ such as failing to disclose in 
advertisements the manner in which electronic versions of legal 
reference materials vary from their print counterparts,\4\ failing to 
disclose prices in advertisements,\5\ or sending and billing customers 
for materials only remotely related to what they have purchased.\6\ 
DeVaun states that mergers in the legal publishing industry have caused 
the accuracy of information provided by legal publishers' customer 
service personnel to suffer. Several comments suggest that the 
Commission adopt revisions to the Guides to recognize certain current 
market practices, including the distribution and licensing of 
electronic legal resources (e.g., those provided on CD-ROM or by other 
electronic means).
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    \2\ The Commission's request for public comment elicited 
comments from: (1) Linda DeVaun, Technical Services Librarian for 
Sonnenschein, Nath & Rosenthal, Chicago, IL (``DeVaun''), #00001; 
(2) Robert L. Oakley, Washington Affairs Representative, American 
Association of Law Libraries (Mr. Oakley is also director of the law 
library and professor of law at the Georgetown University Law 
Center) (``AALL''), #00002; (3) Carl C. Monk, Executive Director, 
Association of American Law Schools (``AALS''), #00003; (4) Lorna 
Tang, University of Chicago Law Library (``Tang''), #00004; and (5) 
Kenneth H. Ryesky, attorney and adjunct professor of law 
(``Ryesky''), #00005. these comments are on the public record in 
file number P994243 as document numbers B25345900001 through 
B25346100005. They are cited in this notice as #00001, #00002, etc. 
The comments are available for viewing in Room 130 at the Federal 
Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580, 
from 8:30 am to 5 pm, Monday-Friday.
    \3\ DeVaun, #00001; ALL, #00002; Tang, #00004; Ryesky, #00005.
    \4\ DeVaun, #00001.
    \5\ AALL, #00002, at 7.
    \6\ Tang, #00004.
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III. Commission's Determinations

    After extensive review of the Guides and their effect on the legal 
reference industry and purchasers of legal reference materials, the 
Commission has decided that the Guides no longer are necessary to 
promote compliance with section 5 of the FTC Act. For the reasons set 
forth below, the Commission has determined to rescind the Guides.
    First, the Guides are overly regulatory in that they include 
significantly more detail regarding suggested disclosures and other 
practices than the Commission would promulgate today. Further, 
repealing the Guides would not impair the Commission's ability to 
prosecute abuses in the legal reference materials industry, if 
necessary. Under the FTC Act the Commission may seek administrative or 
federal district court orders against companies or individuals who 
engage in unfair or deceptive practices,\7\prohibiting future 
violations, and providing other relief such as consumer redress, 
disgorgement of ill-gotten gains, consumer notification, and civil 
penalties, in some cases. The Commission, for example, could prosecute 
sellers who failed to clearly and conspicuously disclose material 
information or sent or billed customers for unordered materials. Such 
practices would violate section 5 of the FTC Act, or section 3009(a) of 
the Postal Reorganization Act of 1970, 39 U.S.C. 3009, which declares 
that mailing, or

[[Page 2868]]

billing for, unordered merchandise constitutes a violation of section 5 
of the FTC Act.\8\ Prior cases brought by the Commission to enforce the 
Postal Reorganization Act and Section 5 of the FTC Act provide guidance 
to industry regarding the illegality of sending and attempting to 
collect for unordered merchandise.\9\
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    \7\ See Federal Trade commission Policy Statement on Deception, 
appended to Cliffdale Associates, Inc., 103 F.T.C. 110, 174-184 
(1984); and Federal Trade Commission Policy Statement on Unfairness, 
appended to International Harvester Co., 104 F.T.C. 949, 1070-76 
(1984).
    \8\ See 35 FR 14328 (1970). Under this law, sellers, other than 
charitable organizations soliciting contributions, may not ship 
unordered merchandise to consumers unless the recipient has 
expressly agreed to receive it or unless it is clearly identified as 
a gift, free sample, or the like. In addition, sellers cannot try to 
obtain payment for or the return of the unordered merchandise. 
Consumers who receive unordered merchandise are legally entitled to 
treat the merchandise as a gift. The Postal Reorganization Act 
refers to ``mailing'' of unordered merchandise. The Commission, 
however, has explained that the application of Section 5 of the FTC 
Act to such practices is not limited to unordered merchandise 
distributed through the U.S. mail, 43 FR 4113 (1978).
    \9\ E.g., Hachette Book Group USA, Inc., No. 39CV00116 (D. Conn. 
1994) (settlement in which FTC charged that defendants failed to 
notify consumers that they would receive yearbooks or supplements 
unless they returned a mail cancellation card, failed to obtain 
consumers' agreement to return cancellation coards if they did not 
want the merchandise, and mailed merchandise and bills to consumers 
who had not placed orders; settlement included a $200,000 civil 
penalty); Field Publications Ltd. Partnership, No. H-90-932 PCD (D. 
Conn. 1990) (settlement in which FTC charged that Field shipped 
unordered books to subscribers who had agreed to receive another 
series of books as part of a continuity plan; settlement included a 
$175,000 civil penalty); Standard Reference Library, Inc. 77 F.T.C. 
969, 976 (1970) (consent order prohibited respondents from 
representing that consumers' failure to return rejection cards or 
take any affirmative action to prevent the shipment of merchandise 
constituted a request to receive merchandise where consumers had not 
agreed to take on that obligation).
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    Second, guides are particularly useful when they resolve 
uncertainty over what claims are likely to be considered ``unfair or 
deceptive'' under Section 5. Several of the provisions in Guides, 
however, do little more than advise against making untrue or deceptive 
claims, or failing to disclose material information where silence would 
be deceptive.
    Moreover, the Commission understands from the comments that the 
industry is quickly evolving into electronic media and increasingly 
using licensing techniques to distribute legal publications, which 
present new technological and intellectual property issues for 
consideration. Thus, although the Guides provide overly detailed 
suggestions regarding presale disclosures, they are so narrowly focused 
that they do not include these or other new and perhaps more important 
areas of concern to sellers and purchasers.
    Third, there appears to be no justification for singling out this 
particular industry for unusually detailed and specific advice, or why 
legal reference material purchasers are in greater need of protection 
than purchasers in other industries. Industry associations, or 
purchaser associations such as AALL or AALS, can adopt guides of their 
own to educate sellers and purchasers about the information purchasers 
of legal reference materials need to make purchasing decisions. Indeed, 
eliminating the Guides may provide the incentive for these associations 
to develop their own guides that address their members' most important 
concerns.
    Based on comments, the Commission has concluded that there no 
longer is a need for the Guides. The Commission, therefore, has 
rescinded the Guides.

List of Subjects in 16 CFR Part 256

    Advertising, Law, Trade practices.

PART 256--[REMOVED]

    The Commission, under the authority of Sections 5(a) and 6(g) of 
the Federal Trade Commission Act, 15 U.S.C. 45(a) and 46(g), amends 
chapter I of title 16 in the Code of Federal Regulations by removing 
part 256.

    By direction of the Ccommission.
Donald S. Clark,
Secretary.
[FR Doc. 00-994 Filed 1-18-00; 8:45 am]
BILLING CODE 6750-01-M