Consumer Advocacy Caucus Seeks AALL Recognition Under New Statement of Purpose

Today we applied for AALL recognition under a new statement of purpose:

The AALL Caucus on Consumer Advocacy will recommend to AALL that it petition appropriate governmental bodies for specific remedies of anticompetitive and unfair business practices by sellers of legal information.”

We decided to pursue our latest application at our July 25th meeting in Philadelphia. We will soon post a summary of our discussion.

Michael Ginsborg
Caucus Chair

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Jones Day Partner Greg Catanias to larger legal information vendors: “Your business model is broken.”

At today’s PLL-SIS Summit, Jones Day partner Greg Castanias spoke on how librarians add value to law firms. Connie Crosby summarizes his comments here. “You fail to understand,” Castanias told legal information vendors, “how we do business while seeking partnership with us.” Another attendee said that he “attack[ed] Wexis vendors for incomprehensible billing.” Connie tells me that his presentation “got a lot of applause, and even some table banging from the audience.”

8/3/10 Update: Greg Castanias has posted his speech today at On Firmer Ground, and responds here to a comment about “vendor bashing:

“Jeremy Sullivan had two problems with my speech. As to the first one, he labels it “’vendor bashing’ (which he may do if he wishes), and thereby discounts it because it’s supposedly ‘the easiest thing in the world to do.’ But to so categorize my words minimizes the points I was making, among which are: (1) that these are real problems that we at the firm-ownership level are having with vendors; (2) we in “management” are — or ought to be — aligned with our library professionals in this respect; (3) each of you is not a lone and powerless voice in the wilderness, and if you know that — and align yourselves with your firm’s management — you have the power to effect positive change in your relationships with vendors; and (4) a ballroom full of library professionals heard these words from a library partner, and vendors need to know that. (The e-mails I’ve received in the past few weeks confirm that others who heard or read my words — lawyers, librarians, AND vendors — picked up these points exactly.)”

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Applying its non-discrimination policy, AALL asks us if we would accept “vendor members.”

Last night, we received an inquiry from AALL. Would we accept “vendor” members? We learned that AALL would require us to so, because, under its non-discrimination policy, “every group is open to every member.”

On short notice, we can identify just one non-discrimination policy,  though we would welcome correction of any oversight.  This policy concerns requirements for institutions to use AALL’s placement services. Its bearing on “vendor” membership remains unclear to us.

At 4:15 pm EST today, AALL’s  Executive Board will consider a recommendation to adopt a proposed Antitrust Compliance Policy. The antitrust policy would require AALL entities to include every qualified participant, “especially if there is a business advantage in being a member.” The Policy would appear to apply to all AALL members, including associate members who work for commercial information services. We have informed AALL that our group includes several such members, and that we welcome all AALL members to join us.

Michael Ginsborg
Caucus Chair

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Will a proposed Caucus Formation Policy preclude our eligibility to become an AALL Caucus?

AALL President Joyce Janto recommends that the  Executive Board adopt a proposed Caucus Formation Policy at the Board’s July 21st meeting. Our Caucus only just this afternoon became aware of the proposal. We have asked the Board whether it would bar our eligibility to become an AALL Caucus.

7/21/11 update: Joyce has confirmed that our “professional interests” under this policy would qualify us to apply for AALL affiliation.

Dear Board Members:

Our group of AALL members only just took notice of the proposed Caucus Formation Policy under Tab 18 of the July 21st Board Meeting Agenda. Therefore, we have had no opportunity until now to learn how this proposed policy might apply to our group if we decide to file a new statement of purpose following the Annual Meeting. We will consider our form of organization when we meet on July 25th.

Under these circumstances, we ask the Board to clarify how the Board would apply the policy before the Board acts on the recommendation to adopt it. The policy appears to limit Caucus eligibility to four categories:

1. Shared backround;
2. Shared work environments;
3. Shared professional interests;
4. Work related to a AALL Special Committee

Of course, we believe that our “shared professional interests” would merit our eligibility for Caucus approval. Please confirm that the Board will rely on this interpretation of the policy.

We seek this clarification because we have recently asked Joyce to consider two statements of purpose under which we might organize as an AALL Caucus. In her memo of June 15, 2011, Joyce says that “we have once again been approached by members to form a caucus that may or may not be in AALL’s best interests. I think that we should re-visit the idea of having some formal procedures in place governing the formation of caucuses just as we have for the formation of SISs and Chapters.”  We do not know that Joyce was referring to our Caucus proposals, or that she meant to compare our group with a “Vegans” group that sought Caucus status in 2007. Nevertheless, we ask that the Board reject the policy if the Board would interpret it to bar our eligibility to become an AALL Caucus.

Michael Ginsborg
Chair, Consumer Advocacy Chair

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Can AALL Members Organize For Consumer Advocacy If AALL’s Executive Board Adopts A Proposed Antitrust Compliance Policy On July 21st?

The AALL Executive Board is about to act on a proposal that may prevent this Caucus from organizing in any form, whether within AALL or independently. The Board will vote on a proposed “AALL Antitrust Compliance Policy” at its July 21st meeting in Philadelphia. (I copied this document  from the Board’s posted agenda draft of June 15, 2011.) We ask that the Board delay a vote on the policy, whose consequences will affect all AALL members, not just those who belong to our Caucus.

The policy represents an interpretation of Section 1 of the Sherman Antitrust Act, banning concerted action in restraint of trade. Its drafters target price-fixing as a special concern. According to their “Antitrust Guidelines,”  “[p]rice-fixing is a very broad term which includes any concerted effort or action which has an effect on prices, terms or conditions of trade, or competition.”

To enforce compliance, the policy requires rigorous oversight of all AALL entities.  AALL entities must submit meeting minutes “to the AALL office”  and provide to the Executive Board “written periodic reports” on “all pending matters, requests for action and approvals for preliminary decisions.”  AALL members can not have “any discussion which may provide the basis for an inference that the members agreed to take any action relating to prices, services, production, allocation of markets or any other matter having a market effect.”  (AALL  initially asked members to follow a similar restriction when joining AALL’s  digital “communities.”)  Members can not have prohibited discussions at “formal meetings and informal gatherings. In fact, informal gatherings of association members are often looked upon with suspicion by the government.”

The policy also includes “some examples” of what AALL members can not discuss – “either virtual or live” – at Association meetings. Among other examples, members may not “discuss current or future prices,” and we must “be very careful of discussions of past prices.” We may not discuss “pricing procedures.” It is unclear whether, or when, informal member discussions  – “live or virtual” – would also trigger these and other of the specified bans. Even the possibility of violating these restrictions would have an obvious chilling effect on informal discussion by members who wish to retain their membership. They could secure advance authorization from AALL headquarters whenever they discuss business practices of legal-content vendors. “It is important that members contact the association for guidance if they have even the slightest qualms about the propriety of a proposed activity or discussion.” But how can members anticipate whether they should have qualms of the kind AALL’s counsel would have? As a result, members would have at least an incentive to avoid such informal discussions altogether.  (Some members may, of course, prefer to risk disciplinary actions up to revocation of their membership, though the policy has no provision on member penalities.)

The policy appears to have at least two antecedents. The first involves a canceled, SCCLL-SIS program that Ken Svengalis was to present at the 2007 Annual Meeting.  The program concerned recommended responses to skyrocketing prices in the legal publishing industry. Ken expected to include economist Mark McCabe,  who received AALL’s support for his research on anticompetitive pricing effects of the Thomson-West merger. AALL canceled the program because its description had the word “boycott”: AALL’s counsel found that any boycott reference in an AALL program incurred significant risk of antitrust violation.  (Betsy McKenize describes the details here. Commenting on the program’s cancelation, Ken said he talked to Department of Justice Antitrust Division attorneys, and they advised him that the Department would intervene only if AALL members undertook to organize a boycott. )  Responding to member inquiries about the cancelation, AALL described its broader antitrust concerns with language later used in the policy. Our Caucus may have also influenced the policy’s development. We submitted our initial statement of purpose in May 2011. AALL raised policymaking and antitrust objections that the policy appears to formalize.

At our July 25th meeting, our Caucus had plans to decide whether to stay within AALL or to organize independently. If we decide to become an AALL Caucus under a new statement of purpose, we would recommend that AALL petition government bodies for remedies of antitrust and unfair business practices by specific legal information vendors. Although AALL has conditionally approved this statement of purpose, the policy suggests that  AALL would render it moot. Our recommendation of a petition may never receive approval as an agenda item for a Board meeting. The Board can discuss “only approved agenda items.”

A reasonable interpretation of the policy shows how it would be pointless for us to organize as an AALL Caucus, unless the Board clarifies the policy or we plan to change it by a membership resolution. If successful, any petitioning we recommend to AALL would have a proscribed “effect on prices, terms or conditions of trade, or on competition.” Under the  policy, we may be understood to recommend collective action with an intention to influence market conditions or competition – not directly, of course, but through government intervention. To prepare our petitioning recommendation to AALL, we would risk violating the policy, because we would need to discuss past, current, or future prices of legal subscriptions, among other “conditions of trade.”  How could we prepare a recommendation under this circumstance? And even if we organized independently, as AALL members we would be associating “informally” to undertake actions, such as government petitioning, that the policy may be understood to prohibit. We would then risk AALL’s refusal to allow our preparations, disciplinary warnings, or revocaion of our membership.

A body of case law – the “Noerr-Pennington doctrine“  – establishes our right to petition our government even if market participants perceive our petitioning as a restraint of trade under the Sherman Antitrust Act. Although the doctrine has exceptions, they do not apply to the action we would pursue as an AALL Caucus.

A recent Vendor Colloquium Action Plan includes a recommendation to develop “an AALL Vendor Relations policy related to antitrust law,” and to engage “outside counsel as needed.” We had no advance notice that the Board would vote on such a policy so soon; in fact, we did not become aware of the policy until July 16th, a day after the deadline for members to comment on the Action Plan.  Of course, we do not know that we have correctly interpreted the policy. Yet a reasonable interpretation raises troubling questions. We therefore ask that the Executive Board suspend any action on the policy until AALL’s members have full opportunity to request clarifications and to submit comments on its ramifications.

Michael Ginsborg
Caucus Chair

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Caucus Meeting In Philadelphia Rescheduled To Noon On July 25th

Please join us for our 12-1 p.m. meeting on July 25th at the Philadelphia office of Drinker Biddle (One Logan Square, Ste. 2000, at the corner of 18th & Cherry Streets). We will discuss the status of our registration with AALL, decide our form of organization, and consider our initial priorities.

Feel welcome to bring your lunch. We can guarantee space for the first 35 attendees who contact me, and we may be able to accommodate up to 5 callers by phone conference. Please let me know as soon as possible if you plan to attend in person or by conference.

We wish to thank Drinker Biddle Library Director Linda-Jean Schneider for hosting our meeting, and Sarah Glassmeyer and Steve Lastres for assisting our preparations.

Michael Ginsborg
Caucus Chair

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Learn more about our Caucus during the AALL Annual Meeting in Philadelphia

Do you plan to attend the Annual Meeting? Would you like to learn more about the Library Caucus on Consumer Advocacy?  Please join us for an organizing meeting in Philadelphia on July 25th, at 5 p.m.. We will soon announce a venue near the Convention Center. We plan to discuss the outcome of AALL’s pending review of our registration. To aid our preparation, please contact me if you think you might be able to participate. We welcome your interest, whether or not you decide to become a Caucus member.

Michael Ginsborg
Caucus Chair

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