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Nike settles controversial First Amendment case

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Nike settles controversial First Amendment case

  • The California Supreme Court’s final word on the case will prevent corporations from speaking to reporters and engaging in public debate, say free speech advocates.

Sep. 15, 2003 — Sports apparel and clothing giant Nike, Inc. threw in the proverbial towel last week, settling a false advertising lawsuit with a consumer activist in California for $1.5 million. Word of the settlement was received with great disappointment by First Amendment advocates, who were hoping the case would lead to a ruling in favor of the free speech rights of corporations.

Under the terms of the settlement, announced Sept. 12, Nike will pay the Washington, D.C.-based Fair Labor Association $1.5 million, to be spent on workplace-related programs over the next three years.

According to a Nike press release, Jim Carter, Nike’s general counsel, said the company will no longer make its 2002 corporate responsibility report publically available, and will “limit its participation in public events and media engagements in California.” In today’s New York Times, Carter is quoted as saying that Nike settled the case because “it had no satisfactory comfort that we could get back to the Supreme Court.”

At issue was a publicity campaign Nike initiated in 1997, after watchdog groups publicly criticized the company for poor working conditions at its factories in Southeast Asia. Nike defended its labor practices through a public relations blitz aimed at quelling the controversy.

Marc Kasky, a labor activist in San Francisco, filed a lawsuit against Nike in 1998, alleging that the Oregon-based company’s public relations campaign was misleading and dishonest. In arguing the merits of the suit, Nike said its statements were political rather than commercial speech because they were made in online press releases, letters to newspapers, and university presidents and athletic directors.

The California Supreme Court, however, said otherwise. In May 2002, the court ruled 4-3 that Nike’s campaign was commercial and not political speech, and should therefore be held to a lower standard of constitutional protection.

The U.S. Supreme Court heard arguments and accepted numerous briefs on the issue this past April, but then declined to make a ruling, saying the review was improperly granted. The case was sent back to a state trial court under the California Supreme Court’s standards.

“The definition of commercial speech that the California Supreme Court used was so broad that it sweeps in not just the speech of corporations, but the speech of unions and of non-profits, and can really have an impact on the availability of information in the public debate,” said Ann Brick, of the ACLU’s Northern California chapter, who filed a brief in favor of Nike’s position.

The Reporters Committee joined 39 other media organizations in filing a brief critical of the California Supreme Court ruling. The brief argued that stripping Nike of its First Amendment protections would discourage businesses from speaking to reporters and getting involved in public debate about important issues.

(Nike, Inc. v. Kasky; Media amici counsel: Bruce E.H. Johnson, Davis Wright Tremaine LLP, Seattle) MC

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