Here is a link to the California Supreme Court decision in Kasky v. Nike. This case, which has been appealed to the U.S. Supreme Court (AFAIK no decision has been made on whether the Supremes will accept the case, though I would be surprised if they didn’t, given the issues involved). It presents a most intriguing issue of First Amendment commercial speech jurisprudence.
A brief summary of the facts* in question:
After lengthy analysis, which you can read yo damn self, the Court held that
Me, I love this case. It has juicy issues of both law and public policy.
A few thoughts to consider about the case and its implications.
The only way this case is not effectively going to become the law of the land [in fact, the world] is if the U.S. Supremes take up the case and overturn. The reason is that if a press release or quote from the CEO is read in California, and the company in question does business in California, the company could get sued, even if the company is in Germany. Furthermore, the Cal. Supreme is a serious court that courts in other jurisdictions may look to for guidance and precedence, so other courts may adopt this rule.
In point of fact, isn’t just about everything a company says really either about selling their product or polishing their brand - which, when you get right down to it, is selling the product? If Nike were to announce a donation of $100 million to your favorite charity, you may be much more inclined to buy a Nike product. If it turns out that Nike actually only donated $100, were you deceived into purchasing a product, and should Nike be held accountable?
OTOH, already Nike and some other companies have decided to not publish their annual “corporate social responsibility” reports, for fear of leading to lawsuits. If companies are deterred from bragging about their good works, won’t they have considerably less incentive to do those good works?
Finally, in general, is silencing corporations on a whole host of issues a good thing? Corporations do represent a whole mess of people’s interests, including shareholders and employees. Should they be deprived of their right to be heard?
In addition, if they cannot speak in public, they will speak in private. Rather than making their case to the public, where it can be scrutinized and criticized, the corporations may simply go through lobbyists to politicos - and we will have no idea what they are saying or advocating.
Thoughts? As you may have guessed from the above, I’m undecided.
Sua
more accurately, allegations, because for purposes of this appeal at this stage in the case, the California Supremes were required to accept the plaintiff’s allegations as true. It is important to note that the California Supremes did not determine whether Nike’s press releases were truthful or deceptive, but was only considering whether they were subject to false advertising laws.
Yes, a very intriguing case. You have raised some key issues, Sua. Another is
The use of lawsuits to harass. Note that there is essentially no damage to any consumer even if Nike lied about the wages paid to their emplyees overseas.
Abuse of class-action suits. MILBERG WEISS BERSHAD
HYNES & LERACH LLP are the recognized leaders. In this case Kasky is not really the plaintiff; Milberg Weiss is really the plaintiff; Kasky is just someone they dredged up.
Combining the two points above, this suit is nearly risk-free to Kasky and to Milberg Weiss. If they win, they could get millions of dollars; if they lkose, there’s no punishment. It would be better if the US adopted the “English Rule” of loser pays.
Picking up on your point #2, it would be nice if SCOTUS chose to distinguish between corporate speech about how product works from other corporate speech, and ruled that the 1st Amendment permits regulating only the former. However, I don’t expect this result. It would be too big change.
9 Another issue is encouraging the public to enforce govrnment policy via lawsuits and punitive damages. This seems to have become more and more common. This has the advanatage of decentralizing law enforcement. It has the disadvantage of encouraging abuse.
Does the 1st Amendment apply at all? There were a couple of cases a few years ago, where SCOTUS ruled that “punitive damages” are not “punishment” under the 8th Amendment. It would seem no less ridiculous to rule that Corporate speech isn’t “speech” under the 1st.
december, your Point #5 is undecided, and there actually is a cognizable argument that consumers are injured.
These days, there is a small but significant consumer base that makes purchasing decisions based upon the “corporate social responsibility” demonstrated by the manufacturer of a product. Is there a value to be assigned for that? Well, that’s for the economists to determine, but I think they would say that a value exists.
Seems to me there’s nothing particularly special about this case on that count, you know. California residents can sue in California for the harm (if any) they suffered from relying (I assume that’s an element here) on the allegedly false representations. In other words, Nike may be liable to Californians for its misdeeds in California, just as it would be liable to Floridians for its misdeeds in Florida. This sort of thing happens in products liability cases all the time.
Potentially, to the extent that the consumer relied on the representation when making your purchase. What are your damages, though? You received the benefit of your bargain when you got the shoes you bargained for, and there are no consequential damages. I’d identify damages as the portion of the purchase price that the consumer expected would be donated to charity, roughly $.02 per purchase. Trivial, in other words, and not much of a disincentive to puffery about the company’s good deeds.
The individual inquiry of reliance, incidentally, is what should prevent this from proceeding as a class action. Not that it would stop some courts . . . :mad:
Yep. That’s why I said “essentially.” But, this leads to your point #2. Anything can affect consumer preferences.
minty – Since you are quibbling about “risk,” I will quibble right back and point out that Kasky, the “plaintiff” has no risk. As for Milberg Weiss, it’s more like an investment than a risk. They can choose how much of their valuable time and effort to spend on this project. There’s no risk that they could lose $100 in court, as Nike could.
Another issue is that Nike’s reputation suffers, regardless of whether they win or lose. The harm to their reputation could cost them more than any lawsuit award. So, we have another issue:
This type of suit has some characteristics of legal blackmail.
Note that there’s no possible harm to the reputation of Milberg Weiss, who revel in their shark-like image.
However, minty, there is harm to your reputation. It’s unfair to tar all lawyers with the same brush, but IMHO Milberg Weiss’s conduct is one reason why people hate lawyers
Would you care to open an all-purpose class action thread, december? While discussion of the class aspect of this case is relevant to the rather interesting questions posed by Sua’s OP, your efforts thus far have been little more than a slam on class actions in general. Let’s see if we can stick to the topic at hand, okay?
Minty I wasn’t pointing out the international scope as something unique, but for the benefit of those laity with better things to keep in their head than the potential global effects of a state court decision.
minty, this is out of my experience, and if you don’t know the answer, I’ll do some research, but is injunctive relief available in deceptive advertising cases?
If yes, it would somewhat moot the “no actual damages” issue.
It appears that the California Unfair Business Practices Act (Cal. Bus. & Prof. Code § 17500) permits injucntive relief for false advertising. No big deal there–all the plaintiffs would win is a court order to stop with the false press releases, if they are in fact determined to be false.
There are people who believe that Constitutional rights are rights because they’re cosmic, intrinsic rights;
and there are people like me who believe that Constitutional rights are rights because, they have good consequences for the Republic and prevent the sort of conduct people who live here don’t want to see.
I’m all for “free speech.” I’m all for individual human beings criticizing whatever they want to criticize, and being held accountable for the careless damage they do to other individual human beings.
Sometime, somewhere, the courts decided that continuing entities put together with a profit motive–corporations–were to be treated as if they were individual human beings, and granted a full panoply of rights. A lot of good has come from that. But let’s recall that it is entirely artificial–a choice we have made.
IMHO, there would be nothing wrong with putting limits on the PUBLIC utterances of entities established and maintained for the purpose of profit. Why shouldn’t press releases as well as advertising be prohibited from making “false or misleading” statements? --not dealt with as a class-action civil matter, but rather as a criminal/regulatory matter leading, perhaps, to dissolution of the enterprise and jail terms?
The US of A exists for its people in general, not its stockholders in particular.
(Yes, there are a few anti-capitalists out here. No, we’re not commies.)
corporations shouldn’t be permitted to lie in a press release anymore than they would be permitted to lie in an advertisement. It’s not even a free speech issue; fraudulent commercial speech isn’t free. You can’t advertise your sugar pills as the cure for cancer if they’re not. Nor can you issue a press release saying the same thing.
