WASHINGTON, D.C.—The U.S. Supreme Court has dismissed a case brought by Nike that would have blocked a California consumer activist from suing the company over press releases and letters to the editor defending the athletic shoemaker against charges that it abused workers in overseas factories.
Nike had asked the justices to overturn a ruling by the California Supreme Court that the suit could be brought under the state’s false advertising statute. The company claimed its comments were political speech, and thus entitled to all the protections of the First Amendment. But the court ruled that the case was not sufficiently advanced and sent it back to the lower courts.
Justices Stevens, Ginsburg and Souter wrote that the case was not properly before the U.S. Supreme Court at this time. Justices Breyer, O’Connor and Kennedy disagreed. The three remaining Justices did not offer any written opinion.
That decision makes it almost inevitable that the court will be asked to hear the case again, but only after a California court has ruled on whether Nike did in fact lie when it
Nevertheless, the judgment drew a withering response from the Public Relations Society of America, which had filed a friend of the court brief in support of Nike. The society said the Supreme Court’s “failure to address questions of established protections for free speech by corporations and other institutions demonstrated that the high court is out of touch with realities of complex communications in a global society.”
“We’re devastated,” said Reed Bolton Byrum, PRSA’s president and CEO. “Those of us who counsel companies in gathering and disseminating information related to their businesses are extremely disappointed the nation’s highest court passed up an opportunity to render a galvanizing decision on the issue of free speech rights for institutions.
“This indecision represents the Supreme Court’s naivete and ignorance in fathoming the complexities and significance of communications in today’s society.”
By contrast, Nike’s response to the decision seemed mild, welcoming the comments of some justices who felt the case should be heard now.
The company pointed to the opinion of Justices Breyer and O’Connor, who said “the questions presented directly concern the freedom of Americans to speak about public matters in public debate, no jurisdictional rule prevents us from deciding these questions now, and delay itself may inhibit the exercise of Constitutionally protected rights of free speech.”
They also wrote that the Kasky case was inconsistent with the First Amendment because it “authorizes a purely ideological plaintiff, convinced that his opponent is not telling the truth, to bring into the courtroom the kind of political battle better waged in other forums.” Justice Breyer further predicted that Nike would eventually prevail on its First Amendment claims.
But in writing for a dismissal, Justice Stevens argued that issuing an opinion at this time would result in “the premature adjudication of novel constitutional questions” that would “apply with special force to this case.”
Said the company, “We are pleased that the only Justices who addressed the legal arguments recognized the importance of the First Amendment in this case and the significance of the issues that we raised…. The fact is that the Supreme Court was clearly troubled by the decision of the California judges and the chilling effect that the decision will have on speech. But, the Court did not believe it had the authority to decide the case at this time.”
The company says it will evaluate the impact of the decision on its ability to engage in public debate and to publish further reports on its corporate responsibility initiatives, and reaffirmed its corporate commitment to continuing to integrate corporate responsibility into the heart of its business.
“We believe that all consumers and other stakeholders should be able to make their own assessment of a company’s performance based on robust, credible and relevant information,” says Maria Eitel, Nike’s vice president and senior adviser, corporate responsibility.
Other communications professionals predict confusion in the wake of the non-decision. According to Chris Atkins, who heads the corporate practice at Ketchum, “The clear conclusion… is that the Court knows the answer but doesn’t care to tell us. There’s a certain Groundhog Day” quality to all of this. If Nike loses in the California courts, they’ll undoubtedly be walking right back up the steps of the Supreme Court making the same arguments they made in April. Meanwhile, corporate America gets to spend a few more years with the Sword of Damocles hovering overhead.”
The PRSA’s Byrum, meanwhile, predicts the absence of any clear ruling on whether companies can enjoy the same freedom enjoyed by their critics will have a chilling effect on political discourse.
“What this means is that companies must stand mute in the face of criticism, however unwarranted, or risk further damage to reputations and business interests in frivolous lawsuits,” says Byrum. “It is a shame that the U.S. Supreme Court will let stand a ruling that implies that our institutions are merely self-serving commercial enterprises that provide no valuable input to the vital issues of our society.
“In our society we’re seeing an increasing number of attacks on corporations and institutions from a widening variety of sources. At the same time there is greater demand from the public and government for corporations to operate transparently—including speaking and providing information of matters that affect them directly. The court should have used this opportunity to clear up the ambiguity resulting from the 50-year evolution of its commercial speech doctrine. Instead, I fear that the court has done little more than encourage and established legalistic free-for-alls in state and lesser federal courts.”