Nike's Freedom Of Speech Issue Gets Major Support From NY Times CNN Pfizer And Many More...

The New York Times Co., CNN, and Pfizer were among more than 40 parties joining Nike, in urging the U.S. Supreme Court to review an unprecedented California state court ruling with significant First Amendment implications.

In a series of amicus curiae ("friend of the court") briefs, a diverse group of public interest groups, businesses, media outlets, and other business and communications associations expressed serious concern over the California decision, which effectively eliminates First Amendment protection for companies that speak out on public issues. Other organizations, including the ACLU of Northern California, had already sided with Nike in amicus briefs filed in the California court.

Today's filings in Nike v. Kasky stem from a 4-3 ruling of the California Supreme Court last May. In that decision, the California court held that because a company's public statements about its operations might persuade consumers to buy its products, those statements must be treated as run-of-the-mill commercial speech, thereby warranting limited constitutional protection.

Explaining that business representatives will be deterred from speaking to the press about a vast array of public issues, a group of media organizations including the New York Times, CNN, CBS, The Washington Post. and the Los Angeles Times wrote, "This chilling effect will deprive the public of access to important information and the clash of competing viewpoints that undergirds the First Amendment." The media institutions argued that the California decision poses a serious and immediate threat to the media's ability to report on important issues regarding corporate America.

They continued, "Extending the definition of commercial speech to corporate statements about publicly debated business operations also is unnecessary. When a business practice becomes a matter of public concern, the media filter and scrutinize potentially misleading corporate speech and place it into context."

"[T]he California Supreme Court significantly curtailed the freedom of speech by holding that most speech by businesses is 'commercial speech' subject to reduced First Amendment protection," wrote former judge and U.S. Solicitor General Kenneth Starr, on behalf of the U.S. Chamber of Commerce. He noted that the reduced protection only applies to companies and not their opponents.

"The Court's guidance ... is very much needed by the entire business community. As matters stand, the lower courts' uncertainty regarding the definition and treatment of commercial speech is deterring speech on important public policy matters that should be encouraged, not discouraged," he added.

In another brief, a group of businesses including Microsoft, Pfizer and Bank of America called the effect of the California decision "both immediate and grave, threatening all corporate speakers with civil and criminal liability for engaging in protected speech." It is therefore unnecessary and unwise to permit the case to continue to trial without immediate Supreme Court review, they explained.

Laurence Tribe, Harvard University's noted constitutional scholar and leading Supreme Court advocate, and former acting Solicitor General Walter Dellinger, head of the Supreme Court practice at O'Melveny & Myers, LLP, are leading Nike's legal efforts.

Echoing the view of several of those filing supporting briefs, Professor Tribe said, "The California decision effectively rewrites the First Amendment and reverses years of Supreme Court rulings encouraging free speech.

"The ruling prohibits and chills protected speech far beyond California's borders affecting any company that does business in the state. And that chilling effect has begun to set in and will last until the Supreme Court overturns the decision."

In reaching its decision, the California Supreme Court expressly applied its ruling to statements that appear in op-eds and editorials, as well as to comments made to reporters, not just to paid commercial ads. In Nike's case, the speech at issue involved such communications as letters to the editor, in which the company responded to public criticism about alleged workplace conditions in Asian footwear factories.

The California decision added that courts could suppress such public statements and allow monetary awards when the statements are deemed misleading, without regard to a company's efforts to ensure that its statements were accurate when made.

Under the California ruling, everyone in California has the right to sue any corporation that happens to sell any product or service in that state, and under the relevant provisions of California law, allegations of actual deception, reasonable reliance, and damages are unnecessary.

As a result of the lower court decision, Nike announced in October that it would not publicly release its annual corporate responsibility report. The report reviews the initiatives and progress the company has made in its labor compliance, community affairs, sustainable development and workplace programs. The company also has declined to participate in several media interviews as well as invitations to speak at various business and academic forums due to the decision.

The California Court's ruling, which overturned two lower court rulings, never addressed the truth or falsity of any of Nike's statements.

A decision by the Supreme Court on whether to hear the case will be made in December 2002 or January 2003. If the Court accepts the case, further briefs would be filed, leading to an oral argument in the Spring and a decision by the Summer.

Nike's own petition to the Supreme Court, filed in October, and other materials about the case, are available at www.nikebiz.com. As electronic copies of the amicus curiae briefs in the case become available, they will be posted on the web-site of one of Nike's counsel, at www.goldsteinhowe.com/blog.