The economic success of Nike has left an undeniable mark on the University, thanks to generous donations from Phil Knight, co-founder of the worlds’ largest shoe manufacturer. But now Nike is battling in the U.S. Supreme Court to leave its mark on the interpretation of free speech for businesses, and legal experts in Eugene are lining up on both sides of the fray.
On April 23, the Court began to hear oral arguments on a free-speech case that has the business world buzzing and could set a new standard for what sort of protection businesses have under the First Amendment.
Nike wants to be protected under the First Amendment from being held accountable for statements that may have been false. The California Supreme Court ruled that the shoe company can be sued under the state’s false advertising law for statements it made in defense of working conditions in its overseas factories. Nike argues that it should be immune from such litigation because the comments it made contributed to the public debate on globalization and should be protected as political speech.
The divided California court rejected this reasoning in a 4-3 decision. The court ruled consumer activist Marc Kasky could proceed with his lawsuit against the Beaverton-based company because Nike’s public relations campaign was viewed as “commercial speech,” which can be regulated by the Federal Trade Commission for accuracy. In its decision, the California court employed a broad interpretation of “commercial speech” to include all statements companies make to convince consumers to buy their products.
The argument about Nike’s free speech rights is a constitutional conundrum. The question before the court now is, what does “commercial speech” mean? Does it simply involve information provided in transactions between buyers and sellers, as Nike argues? Or does commercial speech encompass all the statements companies make to try to influence customers’ purchasing decisions, such as public relations campaigns painting a rosy picture of a company’s working conditions in overseas factories?
A whole host of outside entities and organizations have joined the debate on this issue, some giving their support to Nike and others urging the court to decide in favor of Kasky. Media organizations and advocates of free speech such as the Society of Professional Journalists and the American Civil Liberties Union have filed amicus briefs with the court, urging it not to squelch Nike’s right to speech. But consumer protection agencies and anti-globalization activists, such as the corporate watchdog group Reclaim Democracy, argue that the California court ruling should stand because it prevents a constitutional “corporate right to lie” in public statements.
Tim Gleason, dean of the University’s journalism school, has publicly sided with Nike and the company’s right to defend its business policies and practices in the arena of public debate. Gleason published a commentary in The Oregonian on April 21, arguing that the California court’s decision should be overturned or else corporations wary of litigation will likely withdraw altogether their information from the marketplace of ideas.
“The test for commercial speech that the California court used is far too broad and should be narrowed dramatically,” Gleason said.
Consumer advocates argue that the opposition’s claims of a “chilling effect” on the speech of commercial entities are vastly over-exaggerated, and Klasky should be allowed to proceed with his lawsuit. Eugene attorney David Force said local media have portrayed the California court’s decision as a “gag” on Nike, which he argues is ludicrous.
Force said Nike is a international corporate giant capable of buying full-page ads in the country’s top newspapers, and being forced to pay penalties under California false advertising laws for making untrue statements to the public does not equate to “gagging.”
He added that contrary to the claims of Nike supporters, a decision in favor of Kasky will not limit national discussion on issues of globalization.
“The idea that this will squelch all public debate on sweatshops is nuts,” Force said.
Rather than redefining the free speech rights of corporations, the U.S. Supreme Court could choose to sidestep the issue of commercial speech and dismiss the Nike case on a narrower, more technical basis. Since Kasky is a private citizen suing on behalf of the citizens of California and was not actually harmed by Nike’s public relations campaign, the court could rule he has no standing to bring a lawsuit against Nike.
The court should issue a ruling in June, and advocates on either side of the issue say they are hoping justices will paint a clearer picture of how much constitutional protection is afforded to businesses and where the line is between commercial speech and political debate.
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