[Federal Register: January 19, 2000 (Volume 65, Number 12)]
[Rules and Regulations]
[Page 2867-2868]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19ja00-9]
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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
Erodriguez@ftc.gov.
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