Jewish World Review Oct. 23, 2002 / 17 Mar-Cheshvan, 5763

Terry Eastland

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Consumer Reports

No one should be shut
out of marketplace of ideas | Imagine a company, a very big one. It makes things athletic - running shoes, for example. The company is headquartered in the United States but has manufacturing facilities in dozens of countries.

Suppose also that the company draws the ire of anti-globalization activists, who allege that it mistreats and underpays its workers in Southeast Asia. The company is held up as a prime example of an immoral company that makes gobs of money off Third World labor. Boycotts ensue, demands for legislative action ring forth, and our company is a big story.

Suppose further that the company tries to deal with its manifest public-relations problem. It defends itself against the various charges even as it argues that it is doing good by lifting the economies of poor countries. But then the supreme court of one of our 50 states tells the company that its responses aren't protected by the First Amendment and thus may be subjected to laws barring false and misleading commercial messages. As a result, our company will have to defend itself in court. For obvious reasons, it quits its public defense, leaving the field entirely to its critics.

Now, suppose no longer. As some readers will have recognized, the company is Nike, and the state is California. Last week, Nike asked the U.S. Supreme Court to take its appeal of the California Supreme Court's evisceration of the First Amendment. The U.S. Supreme Court declines many more cases than it accepts. But Nike vs. Kasky cries out for the highest judicial review. This is one decision that shouldn't be allowed to stand.

I say that not knowing who is right and who is wrong in the Nike debate. Yet it isn't necessary to answer those questions to see that Nike should be able to have its say - just as its critics have.

The First Amendment prohibits Congress or the states from abridging the freedom of speech. But California has done precisely that to Nike. If the California Supreme Court's decision isn't reversed, other companies that do business in California and that are objectionable to activists of whatever cause could be litigated into silence.

The suit against Nike was brought by a private citizen, Marc Kasky. If you wonder why a private citizen could bring a case of such importance, the answer lies in the California laws outlawing unfair trade practices and false advertising, which improvidently permit a citizen to act as a "private attorney general" and sue for their enforcement.

Mr. Kasky, described in press accounts as "an environmental activist," alleged no personal injury caused to him, nor did he claim any personal knowledge of the facts underlying the case. Nonetheless, he contended that Nike's critics are right and that Nike is wrong and, under the pertinent laws, asked for remedies - specifically, that Nike disgorge all money earned in California as a result of its allegedly unlawful conduct and that it undertake "a court-approved public information campaign to correct" its alleged misstatements.

If the U.S. Supreme Court doesn't step in, the California courts will commence an inquiry into whether, as its high court said, "any false representations were made." Moreover, that inquiry will proceed under strict liability. Not even truth is a defense if the truthful statements are found to be misleading.

The reason the U.S. Supreme Court should step in is to vindicate the First Amendment and the purposes it serves. Under the court's rulings, "commercial speech" doesn't enjoy the same degree of protection as "noncommercial speech." The California Supreme Court classified Nike's statements as commercial speech. Certainly, there was a commercial element to them. For while the statements didn't pitch products as traditional advertising does, they sought to counter harshly negative views of the company - views that might translate into lower sales. But Nike's statements concerned noncommercial speech as well - such as the company's ethics and the socioeconomic consequences of globalization. Nike entered the marketplace of ideas - where speech has long enjoyed the greatest protection.

The Nike case is about who should judge the company - the legal process or the public. News media have made their own inquiries into the company's business practices, as have (the anti-Nike) advocacy groups. But Nike ought to be able to defend itself and engage the larger debate over globalization without fear of being hauled into court. Such a process of free and open debate is what the Kasky lawsuit has pre-empted - and what the U.S. Supreme Court alone is in a position to revive.

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JWR contributor Terry Eastland is is publisher of The Weekly Standard.Comment by clicking here.

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© 2002, Terry Eastland