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Thursday, April 24, 2003  

Kasky v. Nike (sorry: it's a long one)

When is speech commercial and when is it protected by the first amendment? This is the issue confronting the Supreme Court in the case of Kasky v. Nike. To recap briefly: a California activist, Marc Kasky, sued Nike in 1998 because of statements the company had made about its overseas labor practices. Nike clearly lied: in press releases it claimed that workers were treated well, when in fact, independent sources verified that workers were subjected to inhumane conditions. The twist is that Nike claims it’s not liable for misrepresentations because they didn’t occur in paid advertising (they came from public statements and press releases): as such, they aren’t “commercial speech,” but protected first amendment speech.

Now, before going too deeply into the legal issues, let’s spice the conversation with the political ones, first. Surprisingly (to me, anyway), journalists are lining up on the side of Nike. From an amicus brief filed by New York Times, CBS, CNN, Forbes, The Washington Post, et. Al:

“If the decision below is not reversed, business representatives will be deterred from speaking to the press about …public issues. This chilling effect will deprive the public of access to important news stories and the clash of competing viewpoints that undergirds the First Amendment….

”Extending the definition of commercial speech… to include corporate statements about publicly debated business operations is not only misguided, but it also is unnecessary. … [W]hen a business practice becomes a matter of public concern, the media scrutinize corporate speech and typically place potentially misleading statements into context, thereby providing timely and corrective information.”



Siding with Nike are also the Bush administration and the ACLU (which has got to be a first), multinational corporations (Monsanto, ExxonMobil, GlaxoSmithKline, Microsoft) and the AFL-CIO, manufacturers, advertisers, and PR firms. Those who oppose it are few, and include the Sierra Club, Representatives Kucinich, Brown, Sanders, and Filner, and a few special-interest groups opposed to corporate power.

Legally, the issue seems to depend on a critical previous court ruling: the 1886 Supreme Court case of Santa Clara County v. Southern Pacific Railroad, in which the court decided that a corporation is a person, and as such, entitled to constitutional protections. (Including, obviously, broad first amendment protections.)

Related to that is the body of law surrounding “commercial speech.” According to the court, there are four conditions (or “prongs,” as the following description calls them) to identifying commercial speech.

“Under the first prong of the test as originally formulated, certain commercial speech is not entitled to protection; the informational function of advertising is the First Amendment concern and if it does not accurately inform the public about lawful activity, it can be suppressed.

“Second, if the speech is protected, the interest of the government in regulating and limiting it must be assessed. The State must assert a substantial interest to be achieved by restrictions on commercial speech.

“Third, the restriction cannot be sustained if it provides only ineffective or remote support for the asserted purpose.
“Instead, the regulation must ‘directly advance’ the governmental interest. The Court resolves this issue with reference to aggregate effects, and does not limit its consideration to effects on the challenging litigant.

“Fourth, if the governmental interest could be served as well by a more limited restriction on commercial speech, the excessive restriction cannot survive. The Court has rejected the idea that a ‘least restrictive means’ test is required. Instead, what is now required is a ‘reasonable fit’ between means and ends, with the means ‘narrowly tailored to achieve the desired objective.’



Law is all in the interpretation, though, and here’s where people fall down on the different sides of this issue. Arguing for Nike, the ACLU made the case clearly and briefly here:

If we accept the logic that speech that furthers the economic interests of a company is always commercial speech aimed at consumers, because the “general public” is by definition made up of “consumers,” then businesses will never be able to speak freely, because anything they say on any subject affecting their business interests will, inevitably, affect whether some consumers will want to do business with them. This is as true for companies that speak out in defense of business practices and policies that we applaud, such as the need for a diverse workforce, as it is for Nike. It was for this reason that the ACLU argued that there is an important difference between speech that is directed primarily to consumers, and speech that is directed at a broader audience that occurs in the context of a public debate on broader issues of public concern.



On the other side of the fence, here’s the argument made by the California DA.

Although the First Amendment and the “free speech” clause of the California Constitution protect commercial speech from unwarranted government regulation, fraud, false, and misleading advertising, and the utterance of falsehood about one’s own conduct have never found constitutional sanctuary….

The Attorney General fully supports the expansive core First Amendment protection afforded to the debate of ideas and opinion in matters of public controversy, including the debate over the benefits and harm resulting from economic globalization. This case, however, is neither about ideas nor opinion. This case is about the constitutional protection to be afforded to product and corporate image promotion and the value to be placed on falsehood as an instrument of that promotion. [The] Plaintiff essentially alleges that Nike disseminated false statements about its own labor practices to include members of the public to buy Nike’s products and to negate public criticism so that consumers would not participate in a boycott against Nike. As discussed below, image advertising is properly viewed as a form of commercial speech entitled to limited First Amendment protection, and the use of deceptive statements of fact about one’s own operations is not entitled to First Amendment or state constitutional protection under any legal theory.



How will it shake out? Well, according to reports of yesterday’s proceedings, the court was “sympathetic” to Nike. Final word in June.

posted by Jeff | 10:59 AM |
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