Free speech for business at heart of Nike case

Supreme Court hears Calif. man's claim of false advertising

April 24, 2003|By David G. Savage | David G. Savage,SPECIAL TO THE SUN

WASHINGTON - Harvard Law Professor Laurence H. Tribe and U.S. Solicitor General Theodore B. Olson, two former rivals, teamed up yesterday and urged the Supreme Court to throw out a San Francisco activist's false advertising suit against Nike, the world's largest maker of athletic shoes.

The Nike case has drawn wide attention because it tests the boundary between corporate free speech and false advertising.

But the suit against Nike, filed under California's broad law against false advertising, has two odd wrinkles, both of which caught the attention of the justices.

First, Nike is not accused of selling shoes - such as "Air Jordans" - with a false sales pitch, Tribe said.

Instead, the company was accused of conducting a deceptive corporate public relations campaign that denied that the company's Asian factories were "sweatshops." In news releases and pamphlets sent to sports teams, Nike said its workers were paid a living wage and were treated well.

And second, neither the California attorney general nor the Federal Trade Commission sued Nike for misleading statements. Typically, the consumer protection laws against false advertising are enforced by the government.

However, in this case, Marc Kasky - a resident of San Francisco who does not buy Nike products, according to his lawyer - sued the company and claimed the role of a "private attorney general" representing the public's interest.

A trial judge tossed out Kasky's suit, but last year the California Supreme Court surprised experts in free speech and business law when it revived the suit and cleared it to go to trial. A company can vigorously defend itself, the state court said. But "when a business enterprise makes factual representations about its own products or its own operations, it must speak truthfully," said California Justice Joyce Kennard for a 4-3 majority.

During yesterday's argument, Olson said Kasky's suit should be thrown out because he is an "unelected, unaccountable" person who should not be authorized to pursue "an ideological agenda" in the courts.

If Kasky succeeds, "anyone with a whim, a grievance and a filing fee can become a government-licensed censor," Olson said.

Tribe said the suit should be thrown out because companies deserve a free-speech right to defend themselves.

There is an "intense debate over globalization," he said, and both sides deserve the right to speak. While critics are free to criticize Nike, he said, the company should be free to defend itself.

The lawsuit is a "conversation stopper," Tribe said. If companies can be sued for alleged misstatements in their press releases, they will be reluctant to speak at all, he said.

Kasky's lawyer, Paul Hoeber, said Nike made "specific factual statements" about its factories, and it did so with the intent of persuading the public to buy its products. "This company made representations about their products, and consumers relied on those representations," Hoeber said.

However, the justices sounded as though they were prepared to rule for Nike.

Justice David H. Souter said Kasky sought a "show trial," as he was not harmed by Nike's claims.

"None of this speech was advertising in the strictest sense of the term," added Justice Sandra Day O'Connor.

David G. Savage writes for the Los Angeles Times, a Tribune Publishing newspaper.

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