Wednesday, September 17, 2003

Follow-up: Nike folds on free-speech case. I think I'll move to California and sue Nike. Why not? It worked for Marc Kasky.

Last Friday, lawyers for Kasky -- a San Francisco-based antiglobalization activist -- and Nike announced a settlement to Kasky's five-year-old suit, in which the sneaker-making giant had been accused of making "false and misleading" statements about its labor practices in the Third World (see "Don't Quote Me," News and Features, May 2).

Nike will give $1.5 million to the Fair Labor Association, which will use the money to monitor workplace conditions around the world. That's good.

What's bad is that Nike turned its back on the First Amendment, just as it has been charged with turning its back on its impoverished foreign workers.

Kasky, taking advantage of a California law that allows any resident to act as an attorney general, had accused Nike of what amounted to false advertising by claiming in press releases, letters to the editor, op-eds, and on its Web site that its offshore factories were veritable workers' paradises. Kasky was able to file suit because Nike, though based in Oregon, does business in California (and everywhere else).

Nike, in its defense, had contended that those statements amounted to political, not commercial, speech, and were thus constitutionally protected.

The California Supreme Court sided with Kasky, and ruled that a lower court could conduct a trial on Kasky's suit. Nike appealed to the US Supreme Court. But after agreeing to hear the case, the Court declined to issue a ruling last June, apparently on the grounds that the case was not yet far enough along. Friday's settlement prevents the suit from ever going to trial.

What's got me ready to call an enterprising lawyer is a quote from one of Nike's lawyers, a guy named Walter Dellinger, that appeared in the Los Angeles Times on Saturday: "As much as Nike cared about First Amendment issues, we realized there was no way to get the First Amendment issue back to the US Supreme Court unless Nike were to lose at trial and all the way up the ladder, which is not a very attractive or likely prospect."

Okay, here's my case: Nike is making statements about how much it cares about the First Amendment in order to persuade me that it's a warm, fuzzy company from which I should buy running shoes. Dellinger's quote, therefore, amounts to commercial speech -- and it's "false and misleading," since Nike wouldn't have settled if it really cared about freedom of speech. See you in court!

If you think that sounds ridiculous, you're right. Yet it is exactly what Kasky argued in terms of Nike's statements about its treatment of Third World workers. And now the precedent established by the California Supreme Court stands -- at least in California. But since companies will act in such a way so as to avoid getting sued in California, the effect will be felt nationwide.

This case was a mess from the beginning. The problem was the gag reflex that kicks in at the notion of giant corporations' being allowed to lie about how they treat workers at their overseas subsidiaries. Of course, Nike never said it had lied, but its defense amounted to asserting a right to lie -- which is, in fact, protected by the First Amendment as long as the lie doesn't stray into libel.

The ACLU and a raft of media companies lined up on Nike's side. On Kasky's were groups such as, the Sierra Club, and the Boston-based National Voting Rights Institute, which argued in an amicus brief that corporations, as artificial entities subject to government regulation, should not enjoy the same constitutional protections as a person.

Think Nike's surrender won't have an effect? Think again. According to an account in Saturday's New York Times, Nike has already stopped making public its annual "corporate responsibility report," and is planning to put some limits on its public statements as well. After all, it wouldn't do to have a bunch of lawsuit-happy Californians poking around Nike's Web site and arguing over the definition of "misleading."

But as the ACLU likes to say, "The best way to counter obnoxious speech is with more speech." Let Nike have its say, then scrutinize its statements and publicize the results.

Except that you can't do it that way. Not anymore.

Get me a lawyer!

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