NIKE ASKS SUPREME COURT TO OVERTURN CALIF. RULING

Argues First Amendment Protection in False Advertising Case

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CHICAGO (AdAge.com) -- Sports apparel maker Nike asked the U.S. Supreme Court today to overturn a California court ruling that the company stand trial for false advertising for statements it made defending the working conditions in Asian plants that make Nike goods.

The California Supreme Court's 4-3 decision had rejected Nike's argument that its comments were protected First Amendment speech, and said only the limited constitutional protections provided to "commercial speech" applied because Nike's comments on the Asian plants might affect consumer purchase decisions.

First Amendment issue
The Nike appeal shapes

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up as the key First Amendment business case thus far in the new Supreme Court term. The California court held that Nike's statements about the Asian plants, whether in letters to the editor, op-ed page articles, news interviews or in ads, could be challenged as deceptive advertising under a state law that allows anyone in California to file a suit challenging the accuracy of such comments. Under the statute upheld by the California court, any corporation doing business in California that defended the conduct of its business on issues that might be relevant to consumer decision-making could be sued. In the Nike case, the lawsuit was brought by a California community activist.

Harvard law scholar
Representing Nike in its appeal, Harvard University constitutional law scholar Lawrence Tribe said, "Uttering even a word would become far more risky than simply keeping silent, if this ruling stands."

Because of the California ruling, Nike today also said it would not publicly release its annual "corporate responsibility report" that reviews its progress on labor compliance and workplace programs, among other issues.

Walter Dellinger, a lawyer also representing Nike, said, "This case is about preserving the breathing room that free speech and debate need to thrive. Unless all sides in a controversy play by the same rules, the debate will be distorted and the public will be deprived of a full and fair account of the issues."

ANA response
Daniel Jaffe, executive vice president of the Association of National Advertisers, said, "ANA believes that the Nike case is one of the most important cases facing the business community. Unless the California Supreme Court's decision is overturned, every time the business community takes part in issues of public controversy they will face severe threats of sweeping lawsuits.

"If the Supreme Court agrees to hear this case, ANA will strongly consider joining with others in the advertising community to submit a friend-of-the-court brief on this issue of vital concern," he said.

The Supreme Court could decide whether to review the California case in December or January, Nike said.

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