The California Court of Appeal issued a troubling ruling in October 1999 in Keimer v. Buena Vista Books, Inc., 75 Cal. App. 4th 1220 (Cal. Ct. App. 1999). Reversing the trial court, the court of appeal held that the First Amendment does not protect a publisher from liability under California’s Unfair Trade Practices Act if the publisher reprints factual statements from a book on the cover or in other promotional materials and those statements are proved false or misleading. The appellate court ruled that information on a book jacket and in advertisements for the book is commercial speech not entitled to the same level of First Amendment protection as the book, even when it is a direct quote from the editorial content of the book itself. A judge in New York, however, repudiated that finding in determining that such promotional material is entitled to the same protection as the book itself.

    The case was brought by Russell Keimer against the publishers of The Beardstown Ladies Common-Sense Investment Guide and the producers of a related videotape. Keimer filed suit under provisions of the California Unfair Trade Practices Act that allow a private citizen to sue on behalf of the general public. The book and videotape detail the exploits of a group of retired women from Beardstown, Ill., who had formed an investment club in the early 1980s and who, as general interest in the stock market grew during the 1990s, found themselves media celebrities.

    As a result of their unique combination of financial acumen and small-town appeal, their story became a popular television feature and the subject of dozens of newspaper and magazine articles. (They claimed a return of better than 50 percent in one year and returns averaging more than 23 percent over a 10-year period.) The investment-return claims cited in the book also appeared on the book cover and on videotape covers.

    The performance of the Beardstown Ladies was later called into question, and an audit revealed that the actual rate of return on their investments was significantly lower than originally claimed. Following that audit, a press release was issued by the Beardstown Ladies and their publisher acknowledging the mistake. Soon thereafter Keimer brought suit alleging that the publishers used statements regarding investment performance as the primary basis for advertising and marketing the books and videotape, and that they knew, or should have known, that the statements were false and misleading.

    The publishers asserted, and the trial court agreed, that if a book’s content is entitled to full First Amendment protection (as it was in this case), then material taken from that book and used for promotion is also entitled to full First Amendment protection. In reversing, the California appellate court found that the book and videotape covers were advertisements, that the covers referred to a specific product, and that the publishers’ only motivation for publishing the books was economic. The court concluded that the statements on the book and videotape covers were core commercial speech. In reaching its decision, the California Court of Appeal relied heavily on the U.S. Supreme Court’s decision in Bolger v. Youngs Drug Products Corp., 473 U.S. 60 (1983), a case involving condom advertising.

    The California Supreme Court declined to review, leaving publishers whose works are available in California in an extraordinarily vulnerable position: They must investigate the accuracy of verifiably false or misleading statements that appear on a book’s cover or in advertisements, even if such statements are excerpted directly from the content of the book.

    In New York, another case involving the same book had a markedly better outcome. Lacoff v. Buena Vista Publishing, Inc., 705 N.Y.S.2d 183 (N.Y. Sup. Ct. 2000). As in California, the New York plaintiffs claimed that statements on the book’s jacket were actionable under state law governing deceptive trade practices and false advertising. However, in a ruling issued in January 2000, Judge Herman Cahn of the New York Supreme Court explicitly rejected the California court’s finding that statements on the jacket are commercial speech.

    In an opinion highly sensitive to First Amendment concerns, Judge Cahn ruled that as long as the cover statement accurately reflects the content of the book, it is entitled to the same protection under both the U.S. and New York State constitutions as the book itself. Judge Cahn held that the only way that false-advertising laws may be applied to a book without compromising First Amendment protection afforded the underlying work is if the promotion misrepresents the content of the book. The protection that the First Amendment affords the book precludes publisher liability for negligent errors contained in the book; Judge Cahn held that the same constitutional safeguards apply when those errors appear on the book’s cover.

    Judge Cahn specifically rejected the California appellate court’s reliance on Bolger, stating: "[T]his court differs with the Keimer court’s approach in that I recognize as paramount that the speech is not referring to a product such as condoms ... but rather it refers to a book, the contents of which are themselves protected by the First Amendment."

    At this writing, the Keimer case has not gone to trial nor has an appeal been filed by the plaintiffs in Lacoff.