Nike Case Returns to Lower Courts

NEW YORK Nike v. Kasky, which was being heard in the U.S. Supreme Court, was dismissed on a technicality today. The high court decided the case was not adequately advanced for its purposes and returned it to the lower courts, where it is likely to remain for some time.

The case has far-reaching implications for advertisers. If Nike had lost, it would have severely limited corporations’ abilities to defend themselves publicly. Corporations and advertising lobbyist groups, which were concerned about First Amendment freedom of speech issues, are now left in limbo.

In question were statements Nike made in 1997 about conditions in its factories in Asia and a Nike print ad that said the sneaker company was doing a good job with overseas labor but could do better. Environmental activist Marc Kasky sued the Oregon-based company, arguing that the firm’s disclaimers about the working conditions of its overseas laborers constituted false advertising under California’s consumer-protection laws [Adweek, March 3].

“It keeps the issue alive,” said Dan Jaffe, executive vice president of the Association of National Advertisers. “We agree with the [Supreme Court’s] dissent. At the end of the day, First Amendment rights need to be protected.”

Jaffe felt that the decision is further incentive for corporations to become actively involved in questions of free speech but would have liked to see some closure on the issue.

The ANA, the American Advertising Federation and the American Association of Advertising Agencies claims that the California ruling makes all companies vulnerable to such claims whenever they respond to issues of public debate. The groups argue that the Supreme Court should overturn the California Supreme Court ruling that public statements Nike made about its overseas labor practices constituted commercial speech and were therefore subject to claims of false and deceptive advertising [Adweek, March 3].