LOS ANGELES -- Jury selection is scheduled to begin today in a Los Angeles county Superior Court trial that will decide whether newsletter publisher Zane B. Mann libeled a New Jersey bank nearly two years ago.
Witnesses are expected to include California Treasurer Kathleen Brown.
At issue is an article published in Mann's newsletter that derided the bank's certificate of deposit college investment product.
The Oct. 1. 1991, article in Palm Springs-based California Municipal Bond Advisor. a monthly newsletter for municipal bond investors, questioned Princeton-based College Savings Bank's "CollegeSure CD."
The bank's promotional material says the CD is designed to assure parents that their money will grow at a rate to keep pace with climbing college costs.
But the Bond Advisor article concluded that the CD is "an investment for the intellectually impaired." The article said College Savings Bank's advertising and brochures are "filled with bogus statements about ~guaranteed' yields, blatant misrepresentations about tax liability, complete with misleading graphs and charts using distorted methodology."
In February 1992, Peter A. Roberts, chairman of College Savings Bank, filed a libel suit that called the article "false and grossly libelous." The suit said Mann published the article because of "feelings of hatred and ill will toward the bank and with the desire to vex, annoy, and injure the bank."
While declining to be interviewed for this article, Roberts pointed to a June court declaration in which he said Mann "had strong motivation to libel College Savings Bank and its product" because of Mann's endorsement of college savings bonds, sold by 20 states, including California.
Roberts said these zero coupon bonds -- tax-exempt capital appreciation bonds that pay interest only at maturity -- compete with his bank's CD product.
Mann's "reputation and newsletter's circulation are established, in part, on protecting that municipal bond] industry from competitive threats, and so he had strong incentive to disparage the bank," Roberts said in the June court filing.
Reached for comment before trial, Mann said, "Everything I wrote in the newsletter is based on fact. My opinion I arrived at having read his [Roberts'] literature. My job will be [to explain] how I arrived at that opinion. I have all the confidence in the world I can do it. My business is to express my opinion when I think something is wrong."
According to court witness lists, both sides intend to call to the stand Mann, Roberts, and Shirley M. Hufstedler, a member of the Los Angeles-based, Hufstedler. Ettinger law firm that represents College Savings Bank. Hufstedler is a former U.S. Appeals Court judge and U.S. secretary of education from 1979 to 1981.
The fourth individual on College Savings Bank's witness list is Bradford Cornell, a finance professor on the faculty of the business school at the University of California at Los Angeles.
Mann's witness list also Includes Brown, the California treasurer; Harold Geiogue, the assistant treasurer; and Debra Vrana. a Los Angeles Times reporter who previously wrote for The Bond Buyer and California Public Finance, a Bond Buyer newsletter.
Mann's attorney, Richard S.E. Johns of Kipperman & Johns in San Francisco. said the trial would take about five days. It will be heard by Judge David Workman in Superior Court Department 40.
The legal proceedings are intended to determine if the bank is eligible for unspecified monetary damages because of the article's alleged defamation.
The trial may also provide a courtroom climax to a war of words between Roberts and Brown.
In 1991, Roberts mounted a campaign against zero coupon bond college savers programs by writing an "Open Forum" column for California Public Finance and placing advertisements in national magazines that called the bonds "essentially flawed" family investments because of long-term interest rate risk.
At the same time, Brown was drumming up business for California's college saving bonds by visiting a first grade classroom to symbolize the importance of early college planning.
Brown's sharp criticism of Roberts' statements about zero coupon bonds prompted him to issue a November 1991 press release saying that Brown was putting pressure on the news media to refuse College Savings Bank's advertisements.
The release said that Brown may have violated the Federal Civil Rights Act by misusing the power of her office to deprive the bank of its speech rights protected by the First Amendment of the United States Constitution."
In December 1991, a Brown spokeswoman called Roberts' publicity efforts "blatant self-promotion." Also that month, Hufstedler, Kaus & Ettinger, on behalf of College Savings Bank, "threatened to sue the treasurer for libel" over an October 1991 letter that Brown wrote to the editor of Newsweek magazine, said a memo by Mann's law firm, Kipperman & Johns.
In the Newsweek letter, Brown complained that "distorted facts" about zero coupon bonds were contained in a College Savings Bank advertisement published in the magazine's Sept. 16, 1991. issue.
