After nearly six years of legal wrangling, shoe-maker Nike and Mark Kasky, a San Francisco consumer activist, got their day in court. The U.S. Supreme Court heard oral arguments April 23 in a case that revolves around First Amendment free speech rights.
In Nike’s corner were constitutional scholar Laurence Tribe and U.S. Solicitor General Ted Olson. They urged that the court should reaffirm the First Amendment right to free and open debate and that it should overturn the California Supreme Court’s 4-3 ruling that restricts the ability of businesses and other organizations to speak on matters of public importance.
The original lawsuit stemmed from Kasky suing Nike for falsely portraying itself as a “model of corporate responsibility” in an effort to boost sales after defending its business practices in Third World countries making its footwear.
The U.S. Supreme Court is reviewing the California Supreme Court ruling that Kasky’s lawsuit could go to trial based on the fact that a company’s public statements about its operations might persuade consumers to buy its products, and that the statements must be considered commercial speech, in effect limiting their constitutional protection. The state court ruled that such speech could be restricted even when the statements appeared in news stories, op-eds, press releases or on websites — as Nike’s did.
One point that Olson argued on behalf of Nike was that it was unconstitutional to permit someone to sue for misrepresentation when that person never relied on the statement, did not make a purchase based on it and was not injured by it.
“Anyone with a whim and a grievance and the filing fee can become a government-licensed censor,” Olson said of the state law. He said California transferred its governmental power to a private citizen, “who can advance their own agenda by launching complex and burdensome litigation.”
Justice Ruth Bader Ginsburg said that under the California law Kasky effectively acted as a private state attorney general in representing the public.
Paul Hoeber, a San Francisco lawyer representing Kasky, argued the case should be allowed to go forward to trial. He told the court that the lawsuit involved specific factual representations by Nike about wages, overtime and working conditions, not the issue of globalization. The statements sought to get consumers to buy its products, he said.
Although the law covers false advertising, Justice Sandra Day O’Connor said none of the speech cited in the lawsuit technically was advertising.
The Supreme Court will make a decision on the case by June.