Nike Inc. v. Kasky

Summary

        U.S. Supreme Court, pending

        The California Supreme Court has held that a corporation's statements about its labor practices, which were released in their press releases, may be regulated as commercial speech.

        In response to adverse publicity regarding its labor practices, the Nike Corp. made a number of statements to the California consuming public. Specifically, Nike stated that its workers were being paid in accordance with local wage laws, received benefits, and were protected from discrimination. The statements were included in press releases, letters to newspapers and letters to university presidents and athletic directors. Marc Kasky sued Nike, alleging that the statements were false and misleading. Nike claimed protection under the First Amendment. The California Court of Appeal dismissed the lawsuit, finding that Nike's statements were protected by the First Amendment as noncommercial speech.

        Certiorari granted. In a four-to-three decision, the California Supreme court reversed. The court found commercial speech is afforded less constitutional protection than noncommercial speech and is therefore subject to California laws prohibiting unfair competition and false advertising. Nike's statements regarding its labor practices were commercial speech. Nike is a commercial speaker because it is engaged in the commercial manufacture of athletic apparel. Its statements were targeted to a commercial audience, the purchasers of Nike's products. The statements were of a commercial nature because Nike was making factual representations about its own business operations. Therefore, the statements were commercial speech. Whether the statements were actually false or misleading has yet to be resolved.

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