Q. When a quotation is introduced with “According to So-and-So” or “As So-and-So said,” is the first word capitalized?
A. Full-sentence quotations introduced with “According to So-and-So” or “As So-and-So said,” just like quotations introduced with “So-and-So said” (or “wrote” or the like), usually begin with a capital letter. For example,
According to Gertrude Stein, “There is no there there.”
or
As Gertrude Stein once wrote, “There is no there there.”
but
Gertrude Stein once wrote that “there is no there there.”
In that last example, the words are incorporated into the syntax of the surrounding sentence, so the quotation begins lowercase.
Note that Stein’s words begin with a lowercase t in the original text, where they occur at the end of a characteristically long run-on sentence: “She took us to see her granddaughter who was teaching in the Dominican convent in San Raphael, we went across the bay on a ferry, that had not changed but Goat Island might just as well not have been there, anyway what was the use of my having come from Oakland it was not natural to have come from there yes write about it if I like or anything if I like but not there, there is no there there” (Everybody’s Autobiography [1937; Vintage Books, 1973], 289).
For more on capitalization in direct quotations, see CMOS 13.18–21.