Commercial Claims

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• GWEN IFILL:

  How does free speech apply to the business world? Can a company be sued for defending itself in the court of public opinion? The company, in this case, is Nike, the world's largest sneaker manufacturer. A suit brought by San Francisco activist Mark Kasky made it all the way to the Supreme Court today — and inside the court for us, as always, Jan Crawford Greenburg, Supreme Court reporter for the Chicago Tribune. Jan, Nike and free speech: What does one have to do with one another and how did it end up at the Supreme Court?

• JAN CRAWFORD GREENBURG:

  That's precisely the issue. This case came about in the mid- 1990s. Nike was facing intense public criticism for allegations that it was using sweatshops in the third world to make its sneakers. So it sought to defend itself.

  It took out some newspaper ads and wrote some letters to the editor. It wrote some letters to university administrators who were big purchasers of Nike products. It said, "Look, we are labor friendly and we've been trying to employ all of these things to make conditions better for workers in southeast Asia."

  It quickly found itself in court. As you said, a San Francisco activist sued Nike under a California law that allows private citizens to go into court, representing the public and sue a company for making false statements. In this case he said Nike had essentially engaged in false advertising and as a result those comments were not entitled to this heightened protection under the First Amendment.

• GWEN IFILL:

  Is there any dispute at all that what Nike was saying in these documents was false?

• JAN CRAWFORD GREENBURG:

  There is dispute on that. That has not gotten to the court at this point. The issue only before the court now is whether or not Mr. Kasky can proceed with his lawsuit. He's arguing that this… that these statements are false, that Nike was engaged in false and deceptive advertising and communications. Nike says no, of course we were not doing that.

• GWEN IFILL:

  The debate before the court is kind of a definitional one. What is commercial speech and what is advertising and is there a line between the two?

• JAN CRAWFORD GREENBURG:

  Right. At issue in this case essentially is whether or not Nike engaged in commercial speech, as Mr. Kasky argues, the kind of speech that is designed to entice customers to buy its products or whether or not it engaged in a lively political dialogue as the Nike's lawyer Lawrence Tribe of Harvard Law School argued today. Mr. Tribe said that Nike was engaging in a public debate about a matter of an intense public concern, the issue of globalization. It's very controversial. Nike was entitled to weigh in on these matters and discuss working conditions in some of these third world countries.

• GWEN IFILL:

  Who is Mark Kasky? Who is the kind of person that would take on a company as large as Nike?

• JAN CRAWFORD GREENBURG:

  He's an activist in San Francisco. Obviously very upset about what he saw as these unfair practices, as he saw them. He took this matter to the next level. As you indicated, it's reached its way all the way to the Supreme Court. It's not been an easy fight for him.

  He lost in two lower courts, but the California Supreme Court said he was entitled to pursue his lawsuit against Nike, and it articulated quite an expansive definition of commercial speech, a definition that not only has alarmed Nike because it's allowed Nike's… the lawsuit against Nike to proceed, but that has alarmed businesses around the world, media organizations, free speech groups, the Chamber of Commerce, countless organizations have filed… weighed in on this case on behalf of Nike.

• GWEN IFILL:

  And the Bush administration as well today.

• JAN CRAWFORD GREENBURG:

  The Bush administration sided with Nike although it did not go as far as Nike did. Nike suggested that it should be sued only for statements that are about its products, say, statements it makes about Air Jordans, for example.

  The Bush administration said that was going a little too far, that consumers obviously are interested in how goods are produced. The FTC for example should be able to bring an action against someone who is not really making dolphin-safe tuna. It focused on Mr. Kasky's role.

  The Bush administration said that the way the California law is set up is just too broad and it's too threatening to the first amendment and free speech because it allows private citizens to basically step in the shoes of the government and become a government censor because Mr. Kasky was not harmed by these statements.

• GWEN IFILL:

  Who is supporting Mr. Kasky? Are there any groups coming out on his side?

• JAN CRAWFORD GREENBURG:

  Yes, there are. There are consumer groups, environmental groups, AARP, for example, Sierra Club. So he has groups on his side too who contend that it's very important that corporations and the speech of corporations be monitored and that corporations must be truthful. They target what they say is the false nature, as they say, of Nike's comments.

• GWEN IFILL:

  So that was the case made on both sides today. How did the jurists, how did the justices seem to take it?

• JAN CRAWFORD GREENBURG:

  This was a difficult argument to follow today. It was difficult for the Justices. The Court has long said that commercial speech– and why this is so important and closely followed– is that the Court has long said that commercial speech can be more regulated than pure political speech. So the case today gives the court an opportunity to define what is and what is not commercial speech.

  And the Justices struggled with that. There was some sympathy, of course, for Mr. Kasky's position that the speech of corporations must be regulated. They cannot engage in false advertising, but there was obviously tremendous concern that companies could be hauled into court by an activist and face onerous and burdensome litigation that would chill the speech. Justice Breyer really homed in on the problem.

  He said this really seems like it was kind of both to him. It was commercial. Nike obviously was willing to put forth a good image when it was defending its practices but that it also was political. And it was weighing in on an important issue of public concern. So how does the court draw the line in that situation?

• GWEN IFILL:

  The fact that… if another kind of group, say, a labor union decided that they wanted… that they wanted to engage in political advocacy and someone said but they took out an ad in a newspaper to do that, couldn't that also be interpreted as being commercial speech in a way?

• JAN CRAWFORD GREENBURG:

  Not in this context. If people are making political statements and engaging in the kind of speech that is non- commercial in nature, the court gives less leeway… I mean, gives more leeway, excuse me. Generally you have to prove negligence or reckless disregard for the truth. You can't just say this speech is false. You have to impose a heightened burden. That's not the case in the commercial context when advertising is at issue.

  The government, the court has long ruled it is free and persons acting on behalf of the government in California are freer to go in and monitor the content of that speech because advertisement and corporate speech, after all, is thought to be, as the court has said, heartier, that the company has an incentive to get its message out and it has the financial means to do it. So if the government steps in we don't have to worry about the chilling effect like we might in pure political discourse.

• GWEN IFILL:

  Okay. Jan, thanks again.

• JAN CRAWFORD GREENBURG:

  You're welcome.