Nike Inc. v. Kasky excerpts
45 P.3d 243 (CA 2002)
- California law bans false advertising and unfair competition.
- Kasky alleged that Nike, in response to public criticism and to induce consumers to continue to buy its products, made false statements of fact about its labor practices and about working conditions in factories that make its products.
- Nike made statements in:
- Press releases
- Letters to newspapers
- Letter to university presidents and athletic directors
- Other documents distributed for PR purposes
- Full-page advertisements in leading newspapers
- Issue: Whether Nike's false statements are commercial or political, noncommercial speech.
- Two California lower courts found in favor of Nike.
- California Supreme Court considered three elements:
- Intended audience
- Content of the message
- Commercial speaker: Nike manufactures, imports, distributes and sells consumer goods in the form of athletic shoes and apparel.
- An intended commercial audience:
- University athletic departments are major purchasers of athletic shoes and apparel.
- Consumers in the general public.
- Representations of fact of a commercial nature:
- Nike made factual representations about its own business operations.
- Described its labor policies, and the practices and working conditions in factories where its products are made.
- Addressed matters within its knowledge.
- Court used a broad definition of product references: "By 'product references,' we do not understand the United States Supreme Court to mean only statements about the price, qualities, or availability of individual items offered for sale. Rather, we understand 'product references' to include also, for example, statements about the manner in which the products are manufactured, distributed, or sold, about repair or warranty services that the seller provides to purchasers of the product, or about the identity or qualifications of persons who manufacture, distribute, sell, service, or endorse the product. Similarly, references to services would include not only statements about the price, availability, and quality of the services themselves, but also, for example, statements about the education, experience, and qualifications of the persons providing or endorsing the services. This broad definition of 'product references' is necessary, we think, to adequately categorize statements made in the context of a modern, sophisticated public relations campaign intended to increase sales and profits by enhancing the image of a product or of its manufacturer or seller."
- Nike could readily verify the truth of its factual assertions.
- California Supreme Court: Speech was commercial
- Messages were directed by a commercial speaker to a commercial audience.
- Nike stated facts about its business operations for the purpose of promoting sales of its products.
- Nike's opinion or points of view on general policy questions such as the value of economic "globalization" is noncommercial speech subject to full First Amendment protection.
- Nike's speech concerning facts material to commercial transactions - how Nike makes its products - has less protection.
"Our holding ... in no way prohibits any business enterprise from speaking out on issues of public importance or from vigorously defending its own labor practices. It means only that when a business enterprise, to promote and defend its sales and profits, makes factual representations about its own products or its own operations, it must speak truthfully.
"We do not consider this a remarkable or intolerable burden to impose on the business community."
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