No Hearing for Nike
by Rebecca Spencer

The topsy-turvy saga of Nike’s US court battle for free speech (poor abused political dissident that it is) opened a new episode last month. The US Supreme Court refused to hear Nike’s appeal, meaning that the California Supreme Court’s previous judgement still stands – this held that Nike’s responses to criticism of its treatment of workers constituted ‘commercial speech’ and were therefore governed by laws on false advertising.

The main points of the case were as follows: back in 1998, Californian anti-Nike activist Marc Kasky filed a suit accusing the company of making false and misleading statements in its responses to criticism by activists of Nike’s treatment of workers in a Vietnam factory. Ironically, some of the activists’ facts Nike attempted to counter were based on a leaked report actually commissioned by Nike but never published. Kasky argued that Nike’s statements amounted to false advertising and should be punished as such. Rather than simply defend the truth of its statements, Nike chose to argue that its comments, made in paid-for articles in the press, media releases, letters to newspapers and elsewhere, were protected by US free speech legislation as they were part of a political debate. They won (as legal precedent would have expected). Kasky appealed. He lost.
Kasky then took the case to the California Supreme Court. In May last year, he won. The court found Nike’s statements to be ‘commercial speech’ - and therefore covered by legislation relating to false advertising - on the grounds that the ‘speaker’ is commercial, the ‘audience’ is commercial (e.g. statements contained in letters to heads of university sports departments, which are major customers of Nike clothing) and the material was commerical as it intended to promote the company’s image and sales. The California court has yet to rule on whether Nike’s statements were actually false (and therefore should be punished).
Nike then appealed to the US Supreme Court, which has final jurisdiction on constitutional issues. The Supreme Court ruling delivered on 26 June consisted of a simple refusal to hear the appeal. It does not constitute a judgement on the issues, but argues that the Supreme Court cannot hear the case until the California court has issued a final judgement.

The California ruling sent shockwaves through US corporate law, public relations and anti-corporate activist communities. Their positions are as follows:
Corporate lawyers hold that the judgement is ludicrous and means anything a company says is no longer entitled to free speech protection and companies are now afraid to say anything for fear of legal challenge. They argue that this creates an ‘unlevel playing field’ whereby activist statements have legal protection and company statements don’t.

The PR industry is split - the Public Relations Society of America (PRSA - the main trade association) is backing Nike, aware that jobs and reputations could be at risk if PR were to become subject to legal challenge on grounds of truthfulness. On the other hand, Jack O’Dwyer, publisher of ‘O’Dwyer’s PR’ trade publications, has come out saying PRSA is on the wrong side, ‘Instead of siding with Nike, which refuses to defend the truthfulness of its statements about labor practices abroad…the PR groups should be demanding that accuracy be served. The California Supreme Court ruled that Nike was promoting sales and thus did not have the protection civilians have in making statements.’ Meanwhile, Jeff Seidemann, president of the Boston branch of PRSA, has made a personal statement opposing his own organisation. He makes the interesting point that ‘cause-related marketing’ (selling products on the basis of social or environmental advantages) assumes that positive social and environmental associations promote sales, and that it is therefore hypocritical to claim that a company’s statements on such issues are not commercial. He also argues that ‘we should be publicly stating, again and again, that our profession is guided by a code of ethics and professional standards that requires honesty, accuracy and integrity in our dealings with our clients, the public, and the media’. Touching naivety or just good PR? He doesn’t say public relations IS guided by such a code…

For anti-corporate activists, the case throws up a more basic and essential issue. Are corporations entitled to free speech protection, or, indeed, any human rights? The US constitution does not mention corporations, but past legal precedent effectively establishes corporations as possessing the same legal rights as real human beings. According to anti-corporate group Reclaim Democracy, the Kasky verdict ‘presents a superb provocation to … reclaim some of our tools for keeping capital and corporations subordinate to democracy’.

However, the story continues. Nike has postponed publication of its annual Corporate Social Responsibility Report and is turning down many invitations to speak at events. Other companies are expected to follow suit.
There is a conclusion to be drawn from this, which the corporate lawyers, for one, are obviously at pains to avoid.. Why did Nike not simply defend the truth of its statements, thereby avoiding the legal precedent? Presumably it couldn’t. Commercial speech remains perfectly legal so long as it is truthful. So why are Nike and others curtailing their corporate responsibility reporting? The PR practitioners are obviously in a tight spot, as their profession relies on misleading statements, much of the time, but also relies on being believed. A victory for Nike would effectively represent a licence to lie for corporations, covering their backs legally, but also undermining the credibility of their hired liars - the PR practitioners - and making their job much harder.
Meanwhile, what about the ‘unlevel playing field’? If corporations’ free speech protection ends, doesn’t that leave them defenceless against their critics, whose statements are still protected? Not really. For one thing, the corporation is still perfectly free to defend itself so long as the defence is true, and in the past they haven’t had too much difficulty using libel and other laws to fight down untruthful attacks. For another, as coverage of the case shows, corporations get a much bigger chance to ‘speak’ - through owning and paying for the media - than is ever available to their critics.

But there is also a principle here about the basic difference between human beings and corporations. Nike’s absolute, sole, overriding purpose is to make money and protect its ability to make money in the future . Whatever its actions, one can be perfectly sure that that is its ultimate motive. As such, it is reasonable that its statements should be strictly regulated in order to ensure that people do not give it their money under false pretences. Human beings, including Marc Kasky, are more complicated. Sometimes they have materialistic or just plain malicious motives, sure. But they also do things for the public good, with no further aim than to end an injustice. They may not be absolutely sure of their facts, they may be presenting a position they know will be controversial in order to provoke an enlightening debate, but doing it with good intent. That human beings are capable of good intent and should be given the benefit of the doubt is one of the bases of the doctrine of free speech. Corporations may occasionally achieve positive results, but we know, because they are legally bound to it, that their only motive is self interest - so they should not be given the benefit of free speech protection, on the assumption that it will be misused. We await further developments.

Sources:
http://www.supremecourtus.gov/opinions/02pdf/02-575.pdf
Holmes Report 20 Oct 2002
Jack O’Dwyer’s Newsletter, November 6, 2002
ibid, November 5 http://www.odwyerpr.com/members/1105comm_seideman.htm
http://www.reclaimdemocracy.org/nike/index.html