Metropolitan News-Enterprise


Thursday, February 7, 2002


Page 1


Lawyers Dispute First Amendment Protection for Nike Campaign Against Sweat Shop Allegations




SACRAMENTO (CAPITOL)—Apparel maker Nike Inc. had a First Amendment right to defend itself against allegations that workers are mistreated in its foreign factories, a lawyer for the company told the California Supreme Court yesterday.

Nike’s view was attacked by the attorney for a private citizen who wants to sue the company, claiming that the company’s expensive publicity campaign featured false and misleading statements and should be judged by the same standards as normal commercial advertising.

Nike launched the campaign after a series of newspaper and television reports in 1996 and 1997 gave credence to earlier claims that workers who make Nike products in countries like South Korea, Taiwan, China, Thailand, Indonesia and Vietnam labor for wages that are low, even by the standards of those countries, and under deplorable conditions.

Nike’s campaign characterized the company as a leader in the fight to improve working conditions in the host countries. Press releases detailed answers to the allegations, as did a series of letters to collegiate athletic directors, who were faced with protests on campus and demands that they dissociate their departments from the company.

The plaintiff in the unfair competition suit, Marc Kasky, lost in the lower courts. He claims Nike’s missives contain factual errors—including wage figures that are too high—that amount to fraud and misrepresentation.

The suit, which seeks an injunction against misleading or false statements by Nike, advertising to correct past statements and a disgorgement of profits earned in California, alleges that the letters and press releases were designed to increase profits and therefore are not protected by the First Amendment.

“Their statements don’t say ‘buy our products’ ... but in the context, they convey that meaning,” Paul R. Hoeber, a San Francisco lawyer representing Kasky, told the court.

Hoeber argued for a broad definition of commercial speech under which any statement designed to increase company profits could be regulated for consumer-protection.

“There is no constitutional value in false statements of fact,” Hoeber added.

David Brown, a San Francisco lawyer representing Nike, asked the court for a narrower definition of commercial speech.

“The statements were part of a public debate on public issues,” Brown said. “... In a political debate, I don’t think it’s constitutionally acceptable to handcuff one side.”

Nike’s counsel also argued that the company’s statements weren’t intended to boost profits, but had other purposes, including keeping employee morale from dropping.

Justice Janice Rogers Brown appeared to side with Nike, repeatedly challenging Hoeber with hypothetical situations.

“If anybody but Nike made the statements, they would be protected [by the First Amendment], right?” Justice Brown asked. She said the statements also would be protected if they were made during a legislative hearing.

“What I’m getting at here is that it is possible for these things [protected and unprotected speech] to be intertwined,” the justice said.

Hoeber responded that during a legislative hearing, “the content of the statements may be the same, but the context is different and therefore the meaning is different.”

Justice Brown said that in Hoeber’s view, “Every time a company tries to defend itself, it is proposing a transaction.”

Justice Marvin Baxter also appeared to favor a narrow definition of commercial speech. Under a wider definition, Baxter said, “The accuser is protected by the highest protective standard and the responder would be held to a different standard — it’s a debate with one participant having his hands tied behind his back.”

Justice Joyce Kennard peppered Nike’s attorney with questions, asking whether he would acknowledge a difference between broad policy statements — such as a general claim that Nike cares about workers’ rights — and specific statements about workers’ wages and labor conditions that could be shown to be erroneous.

When the lawyer responded with a warning about the possible “chilling” effects of expanding the boundaries of commercial speech, Kennard said, “Whenever I ask a question about false and misleading statements, you bring me back to a broad public policy debate.”

Chief Justice Ronald George questioned Nike’s lawyer on the motives of the statements in question and of corporate image-improvement campaigns in general.

“Wasn’t the ultimate goal to sell more products?” George asked.

Outside the courtroom, Vada Manager, Nike’s director of global issues, said the company’s motivation “wasn’t about selling products.”

“We have other avenues for doing that,” Manager said, citing Nike’s large stable of celebrity endorsers and its big-budget television advertising campaigns.


Copyright 2002, Metropolitan News Company