Supreme Court Will Hear Nike Case

On Friday, January 10, the U.S. Supreme Court announced that it would hear Nike v. Kasky. The court's decision is good news for a group of prominent media and free expression organizations that filed an amicus brief in support of Nike in mid-November. The groups, which include the American Booksellers Foundation for Free Expression (ABFFE), contend that the case has serious First Amendment implications. "I think it's good that the Supreme Court will be hearing [Nike v. Kasky]," Theresa Chmara, counsel for ABFFE, told BTW. "It's an important issue."

Nike is asking the U.S. Supreme Court to review a California Supreme Court ruling holding that the sports apparel giant engaged in false advertising when it launched a public relations campaign to defend its Southeast Asian business operations. The California court's decision came after California-based environmental activist Marc Kasky charged Nike with violating California's Business and Professions Code when it issued opinion pieces denying negative reports regarding the company's working conditions and wages in its Southeast Asian factories, as reported by ESPN.com. He said the op-ed pieces were the equivalent to false advertising under state law and further accused Nike of making at least six statements that it knew to be false in the course of the campaign.

Though two lower courts ruled in Nike's favor, in May 2002, the California Supreme Court overturned the rulings and cited U.S. Supreme Court decisions that approved broader limits on "commercial" speech. In its ruling, the court defined speech as commercial if it is made by someone engaged in commerce, is likely to reach potential buyers or customers, and involves descriptions of "business operations," employment or manufacturing policies, or other attempts to enhance the image of a company's product.

The court also ruled that Nike could be sued for consumer protection violations based on answers given to reporters' questions, press releases, op-ed pieces, or "editorial advertisements." (For a previous BTW article on Nike v. Kasky, click here [1].) Nike filed its petition to the U.S. Supreme Court in October 2002.

In mid-November, media groups filed an amicus brief in support of Nike's petition to the U.S. Supreme Court. The groups argue that the California court's ruling makes false statements punishable whenever a company spokesman is speaking to a reporter or even when writing letters to the editor. Moreover, Kasky is not claiming that Nike lied, but that the company issued misstatements, raising the possibility that a company can be punished even for statements that it makes in good faith, but turn out to be false.

The groups fear the California ruling could have a chilling effect on public debate on corporate conduct, thereby depriving the public of important information. "Whether or not you believe that commercial speech deserves less protection that ordinary speech, the California Supreme Court decision in this case would severely restrict debate about corporate practices," said Chris Finan, president of ABFFE.

Nike has 30 days from January 10, 2003 to file its brief with the Supreme Court.