WASHINGTON, D.C.—U.S. Supreme Court justices appeared sympathetic to Nike’s claim that its discussion of overseas labor practices is entitled to the same First Amendment protection enjoyed by its critics, raising hope that corporate pronouncements on controversial issues will continue to enjoy some constitutional protection.
Nike was appealing a California Supreme Court ruling that press releases and letters to the editor issued by the company were subject to the state’s consumer protection laws, designed to punish false or misleading advertising. The case has far-reaching implications for the public relations profession because it applied to any company doing business in California, and because a suit could be brought by anyone, even if they were not influenced or harmed by the company’s statements.
The case arose after an activist, Marc Kasky, charged that Nike misrepresented its labor record in letters, press releases and op-ed articles. The California court did not rule of the facts of the case, but said that since Nike’s statements were designed to encourage people to buy its products, they were commercial speech and therefore not fully protected.
Nike’s lawyer, Laurence Tribe, disagreed, telling the Supreme Court on Wednesday that Nike’s comments not advertising but rather the company’s side of “an intense debate on the pros and cons of globalization.” Tribe said that Nike’s critics had used the media to portray the company as an exploitative employer and that “Nike used the same media” to defend itself in what became “a lively political dialogue about the realities of the third world and Nike’s role in it.”
The Bush administration weighed in on Nike’s side of the debate, with Solicitor General Theodore Olson expressing concern that the California ruling would give private plaintiffs like Kasky the power to “advance their own agendas” by bringing the type of lawsuit normally brought by government regulators. According to Olson, if the California ruling is upheld, “Anyone with a whim or a grievance or a filing fee can become a government-licensed censor,” without a need to show that anyone was harmed by the information.
Paul Hoeber, representing Kasky, countered that Nike had simply been “making factual representations to consumers about its own practices to get them to buy its products” and that its participation in the debate was for motivated by commercial concerns.
“The truth of the matter is, I think it’s both [commercial and political speech],” said Justice Stephen Breyer, who added: “I think the First Amendment was designed to protect all the participants in a public debate, and a debate consists of facts. Once you’ve tied a party’s hands behind his back with respect to facts, you’ve silenced him.”
Justice David Souter said Kasky was seeking a “show trial” for Nike, since he was not harmed by Nike’s claims. Hoeber had admitted that Kasky was not a Nike customer.
Recent precedent suggests the court defines commercial speech narrowly as communication that “does no more than propose a commercial transaction.” The California court’s ruling, would extend that definition to encompass all speech by a person or organization “engaged in commerce” and “likely to influence consumers in their commercial decisions.”
Justice Sandra Day O’Connor, meanwhile, suggested to Hoeber that none of the challenged statements were “advertising in the true sense.” Hoeber agreed but he said it would be a mistake to limit the definition of commercial speech to advertising, because “that line would leave out a lot of promotions and representations that consumers rely on.”
In response, Justice Anthony Kennedy suggested that anything short of a clear definition would raise additional First Amendment problems. “If it’s very difficult to define commercial speech, isn’t it true that companies will be chilled in speaking?”
Said Hoeber, “To the extent that the definition is unclear, it may be. It’s plausible.”
The court is expected to rule in the case before its term ends at the end of June.