Nike v. Kasky (2003) (2024)

The Supreme Court decision inNike v. Kasky,539 U.S. 654 (2003), is controversial because it raised, but did not resolve, contemporary issues regarding First Amendment protection for corporate speech in matters of public concern. These unresolved issues remain the focus of a lively discussion among First Amendment scholars.

Nike claimed misleading statements were noncommercial speech

Nike manufactures footwear and apparel in factories in foreign countries. In the 1990s, numerous critics accused Nike of unfair labor practices and unsafe working conditions. Nike responded to these allegations with a public relations and advertising campaign. In 1998 Marc Kasky, an activist lawyer, invoked California’s False Advertising Law and Unfair Competition Law for the purpose of suing Nike for publishing false and misleading statements in this campaign. Nike claimed that the statements were noncommercial speech on matters of public concern and thus were constitutionally protected. Nike prevailed in trial court and in the California Court of Appeals. However, the California Supreme Court reversed the lower courts in its 4-3 decision inKasky v. Nike, Inc.(2002).

Case was settled out of court without rulings on constitutional issues

InNike v. Kasky, the U.S. Supreme Court agreed to hear the appeal, then abruptly dismissed it as “improvidently granted,” effectively returning the issue to the California courts for disposition. The case was settled out of court eventually, without any substantive ruling on the constitutional issues.

Justices disagreed on whether the Court need to look into the free speech issues

Justice John Paul Stevenssaid in a concurring opinion that theNikecase “presents novel First Amendment questions because the speech at issue represents a blending ofcommercial speechand debate on issues of public importance,” but he also said that the Court did not need to look into the complicated free speech issues at this point.

Three justices dissented, believing that the justices should examine the underlying constitutional issues.Justice Stephen G. Breyerwrote a strong dissent focusing on the importance and need for resolution of the constitutional issues, especially thechilling effects imposed on free speech by the California Supreme Court’s decision.

Majority said Nike’s campaign was commercial speech

The clash between the majority and dissenting justices focused on the classification of communication in which Nike was engaged and the free speech implications of that classification. The majority held that Nike’s campaign constituted commercial speech and therefore merited protection only if it satisfied the test inCentral Hudson Gas and Electric Corp. v. Public Service Commission(1980). The initial prong of theCentral Hudsontest — the expression of commercial speech concerns lawful activity and is not misleading — was met because both parties stipulated that the campaign included deceptive statements. The majority held that “communication more likely to deceive the public than to inform it” fails to meet the threshold of commercial communications eligible for constitutional protection.

The dissenters claimed that the speech dealt with an important public issue and therefore merited a high level of protection and that to punish Nike for factual errors would chill corporate participation in future debates on public issues.

Significant constitutional issues remain unresolved

Because Nike and Kasky settled out of court, at least two significant constitutional issues remain unresolved. First, the definition of commercial speech articulated inKasky v. Nikehighlights, but does not dispose of, important questions regarding corporate speech that contains both commercial and noncommercial elements.

Second, the California Supreme Court’s invocation of the threshold part of theCentral Hudsontestas a threshold determinant of constitutional protection appears to privilege theclassificationof speech as commercial or noncommercial, at the expense of an inquiry into thefunctionsof corporate communications in contemporary society.

The case raises additional questions regarding the vitality of theCentral Hudsontest for commercial speech in the 21stcentury.

This article was originally published in 2009. Richard A. “Tony” Parker is an Emeritus Professor of Speech Communication at Northern Arizona University. He is the editor ofSpeech on Trial: Communication Perspectives On Landmark Supreme Court Decisionswhich received the Franklyn S. Haiman Award for Distinguished Scholarship in Freedom of Expression from the National Communication Association in 1994.