Nike, Inc. v. Kasky
Headline: Court declined to decide whether Nike’s public replies about overseas labor are commercial speech, leaving a California false‑advertising suit against Nike to proceed and creating uncertainty for corporate speech.
Holding:
- Leaves California false‑advertising suit against Nike to continue.
- Creates uncertainty for corporations about public relations on social issues.
- Raises risk that private citizens can sue companies over promotional statements.
Summary
Background
Nike faced widespread criticism in the late 1990s over allegations of mistreatment and underpayment of workers at its foreign factories. Nike issued press releases, letters to editors and university officials, and commissioned an Andrew Young report that found no widespread abuse. In 1998 Marc Kasky, a California resident, sued Nike under California’s Unfair Competition and False Advertising laws, alleging Nike made false statements to maintain or increase sales. Kasky said he suffered no personal injury and sued on behalf of the public. A trial court dismissed the suit; the California Court of Appeal affirmed that dismissal as protected public debate; the California Supreme Court reversed, calling Nike’s communications commercial speech and sending the case back for further proceedings. The U.S. Supreme Court granted review but declined to decide the issues.
Reasoning
The Supreme Court dismissed its review as improvidently granted. Justice Stevens, joined in part by other Justices, explained three reasons: the state court judgment was not final for federal review; there were problems about which parties had federal standing to sue; and the constitutional questions were novel and premature without a developed factual record. Stevens emphasized that the challenged statements blended promotional claims and public‑issue debate, making a full record important before defining constitutional limits.
Real world impact
By declining to decide, the Supreme Court left the California ruling in place for now and allowed the state‑law case to continue in state court. That outcome keeps alive the possibility that companies’ public communications about labor issues can be treated as commercial speech and be subject to state false‑advertising laws. The ruling creates uncertainty for corporate public relations and could affect how organizations talk about social matters.
Dissents or concurrances
Justices Breyer and Kennedy dissented from dismissal. Breyer argued the Court should decide now, contending Nike had standing, warning the case could chill corporate speech, and urging closer review of California’s private enforcement regime.
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