Nike, Inc. et al. v. Kasky, Marc
Nike, Inc. (“Nike”), an Oregon-based corporation, makes and sells athletic apparel. In
1997, an employee of Nike leaked a confidential audit by Ernst & Young about Nike’s
labor practices in Southeast Asia. The audit said that workers in the Nike factory were
exposed to toxic chemicals without protection, subjected to physical, verbal and sexual
abuse, forced to work illegal excess overtime without proper pay, and suffered from poor
ventilation and lack of drinking water. Most people in the factories are women under the
age of 24.
Nike has been actively writing press releases, sending letters to newspapers, athletic
directors, and university administrations since the early 1990s, claiming that workers in
Nike factories were treated well. The leaked audit seems to show that Nike’s statements
in these press releases and letters were either false or misleading.
Marc Kasky is an activist in California who is suing Nike based on a California
consumer-protection law that allows one person to sue a company on behalf of all the
people of California for consumer-protection violations. Kasky is suing Nike for issuing
false or misleading statements to the people of California regarding Nike’s labor
Are the statements issued by Nike commercial speech and therefore subject to laws
regulating commercial speech, false advertising or other forms of commercial deception
or are their statements protected speech?
The First Amendment
The First Amendment guarantees the right to freedom of speech, generally unrestricted
by the government. However, there are limitations for certain types of speech.
Commercial speech -- speech that is motivated by profit and serves a commercial purpose
– can be regulated. In an effort to protect consumers, commercial speech regulation
mandates that commercial speech cannot be false or misleading.
To determine if speech is commercial, courts apply a three-prong test, considering the
speaker, the intended audience, and the contents of the message. The speaker must be
someone engaged in commerce (the production, distribution, or sale of goods or
services). The intended audience must be actual or potential customers of the speaker, or
a person that will likely repeat statements to customers (such as the media). Finally, the
content of the message must be representations of fact about business. The statements
made about the business are for financial gain.
Arguments for Kasky
The statements made by Nike are commercial speech. The speaker is a company
engaged in commerce sending messages to an audience of actual or potential
customers of athletic apparel. The statements were designed to encourage people
to buy Nike products.
The statements can be regulated, even if they are related to labor disputes and not
the actual sale of products or services.
The California law does not suppress the expression of points of view or ideas.
The law regulates misrepresentations of fact.
There is no evidence or cases that show that California’s law deters companies
from speaking out concerning social issues or other areas of protected speech.
Arguments for Nike
The statements made by Nike are not commercial speech. Nothing in the
statements actually proposes that any person buy Nike products.
The statements are actually related to labor disputes. Speech related to labor
disputes receives full First Amendment protection.
The statements were expressions of Nike’s point of view on the labor disputes.
Expression of ideas is protected by the First Amendment.
California’s law “chills” protected speech, making companies, such as Nike, less
likely to speak out concerning social issues.
The Court dismissed the grant of certiorari, believing that it should not have agreed to
hear the case in the first place because the case had not been fully adjudicated in the
California courts. When the case was first filed in a California trial court, Nike argued
that there was no reason to litigate because the First Amendment protected Nike from
Kasky’s allegations and the trial court judge agreed. The issue in the California courts has
been whether the trial judge was correct to bar the case based on the First Amendment.
The California Supreme Court argued that the trial judge was incorrect and that the case
should at least be litigated in the trial courts.
This decision to go to trial is the issue Nike was challenging at the Supreme Court. By
dismissing the grant of certiorari, the Supreme Court said that it should not rule on the
case until it has been fully adjudicated in the California court system. Nike hasn’t lost the
case; it has just lost the chance to avoid a trial on the issues. If Nike loses in California, it
is possible that the case might find itself before the Supreme Court again.
In concurring with the decision to dismiss certiorari, Justice Stevens (joined by Justice
Ginsburg and in part by Justice Souter) explained that the California Supreme Court
judgment was not a final order and listed the reasons for “avoiding the premature
adjudication of novel constitutional questions" because it applied "with special force to
this case." He emphasized the difficulty presented by the blending of commercial speech,
noncommercial speech, and debate on an issue of public importance.
Justice Breyer wrote a dissenting opinion that was joined by Justice O’Connor. He argued
that the Court should not have dismissed certiorari and instead should have ruled in
Nike’s favor. He saw the case in much simpler and immediate terms than Justice Stevens,
believing the right of Americans to speak about public matters was at stake and delay in
deciding the case might inhibit the exercise of constitutionally protected rights of free
speech. He did not see the case as potentially easier to decide in the future. In analyzing
the First Amendment issues in the case, Justice Breyer said that Nike’s statements should
be viewed by the public speech standards, which allow much greater freedom for the
statements Nike can make about its products, than commercial speech standards. Justice
Breyer also challenged the California statute that allowed Marc Kasky, a private citizen,
the power of a “private attorney general” in pursuing a case against Nike on behalf of the
general public’s interests.
Justice Kennedy also dissented from the dismissal of certiorari but neither issued nor
joined an opinion.