WASHINGTON, D.C.—The United States Supreme Court has agreed to review a California state court ruling against Nike that effectively eliminates First Amendment protection for companies that speak out on public issues and has energized the entire public relations industry, as well as media companies and civil rights group.
The U.S. Supreme Court’s decision in Nike v. Kasky will clarify whether corporate statements about its operations are entitled to the same constitutional protections enjoyed by their critics. Since the California ruling—which impacts any company that does business in the state—several companies have scaled back on any communication on sensitive social and environment issues because of concerns over lawsuits.
Last May, the California Supreme Court held that because a company’s public statements—such as press releases or letters to a editor—might persuade consumers to buy its products, those statements were essentially advertising, entitled to only limited constitutional protection as “commercial speech.” The California court did not rule on the veracity of Nike’s statements, which concerned overseas labor practices, and the decision was so broad that even truthful statements could be subject to legal action.
Groups including The New York Times, Pfizer, CNN, the U.S. Chamber of Commerce, the Council of Public Relations Firms and the Public Relations Society of America joined Nike in urging the highest court in the land to review the ruling.
Media organizations including the New York Times, CNN, CBS, The Washington Post, and the Tribune Company warned, “This chilling effect will deprive the public of access to important information and the clash of competing viewpoints that undergirds the First Amendment. Extending the definition of commercial speech to corporate statements about publicly debated business operations also is unnecessary. When a business practice becomes a matter of public concern, the media scrutinize corporate speech and typically place potentially misleading statements into context.”
Nike welcomed the decision to review, while plaintiff’s attorney Alan Caplan said he was confident the California decision would be upheld. “The lawsuit specifically describes numerous factual misrepresentations Nike made to the public about the labor practices in the factories that manufacture its shoes,” says Caplan. “These misrepresentations were not part of any political debate, but were made by Nike to encourage consumers to buy a pair of its shoes.”