The Activist’s Story

I saw something that I thought was wrong, and I wanted to do something about it.

-- Marc Kasky¹⁹

Marc Kasky is a jogger and former marathoner; at one time in his life he wore Nike shoes. He is also a political activist, an environmentalist, and the guy who once sued AT&T, Pillsbury, and Nestle Beverage Co., among others.²⁰ He was so enraged by Steven Greenhouse’s New York Times story that he called his friend Alan Caplan.²¹ What could be done to force Nike to tell the truth about how it was treating its foreign workers? What could be done to bring Nike to its knees?

Caplan, a noted California class-action lawyer who always relished a clash with a corporate giant, had an idea. They would sue the footwear company under California’s unfair business practices statute,²² which prohibits “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.”²³ Caplan had earlier won a major case against R.J. Reynolds under the same law. That victory prevented Reynolds from using Joe Camel ads in California. The tobacco giant also agreed to pay $10 million for an anti-smoking campaign in the state.²⁴

Thus Kasky v. Nike began as a consumer action filed in the San Francisco Superior Court on April 20, 1998.²⁵ There, in a court normally the home of personal injury, business, and divorce lawsuits, a landmark case would begin. The suit accused Nike and five of its officers and/or directors, including CEO Phil Knight, of misleading consumers about how it treated foreign workers. Tracking what the Vietnam Labor Watch report had done a year earlier, Kasky and Caplan compiled a list of Nike’s alleged human rights violations at its Asian facilities and paired that list against a list of Nike’s corresponding exculpatory statements. Among other things, the suit charged that Nike misled the public when it:

• denied that its Asian factory workers were not subject to corporal punishment;
  
• claimed that products in those factories were made in accordance with applicable government wage and hour laws;
  
• alleged that Nike pays production workers on average twice the minimum wage in Southeast Asian countries; and
  
• alleged that workers who make Nike products receive free meals and health care.

While the complaint relied on no first-hand accounts, it did draw on various human rights reports, credible news stories, and even a 1997 internal audit of the company prepared by the accounting firm of Ernst & Young.²⁶ The leaked audit described health and safety violations at a shoe factory in Vietnam. Its findings were used to contradict Nike’s self-exonerating PR.

The remedy sought by Kasky and Caplan for the alleged wrongs was not simply disgorgement of profits realized due to Nike’s violations. Hardly. The plaintiff asked the court to monitor a “public information campaign to correct alleged misstatements” about Nike’s labor practices.²⁷ In other words, if Nike lost, it would be forced to pay for anti-Nike messages on commercials and billboards. Worse still, Nike’s fate was to be in the hands of twelve lay people, as Kasky requested a jury trial.

Consistent with that request, the complaint was signed and captioned as if it were a populist document: “MARC KASKY, on Behalf of the General Public of the State of California.”²⁸ Notably, Kasky alleged “no harm or damages whatsoever regarding himself individually,”²⁹ and alleged no specific injury sustained by any members of the public.³⁰ In essence, the self-designated private attorney general was suing over Nike’s negligent misrepresentations of fact, pure and simple.³¹ Predictably, as soon as the Kasky complaint was filed it became banner news.

“Californian Sues Nike, Inc. over Asian Labor Conditions.”³²

That headline in the San Francisco Examiner was especially disturbing to many of the city’s inhabitants. It was likewise troubling to people of all walks of life who saw similar headlines in numerous other papers. Radio and television followed suit with their own stories, replete with photos of Swooshes and sweatshops. In Nike’s eyes, however, it was all media hype. “[T]he action as filed,” according to a Nike press statement, “appears to be . . . a press release dressed up like a lawsuit.”³³

Was there any merit to Marc Kasky’s allegations? What was true and what was false? Why did Nike’s lawyers never go to court and seek protection under California’s anti-SLAPP laws?³⁴ Whatever the answer to such questions, the Kasky and Caplan plan was nonetheless ingenious and provocative: take Nike to court and let it wage its PR campaign under oath. And if it was unable to do so, then the court would compel it to speak the truth in public service announcements. The idea to take the debate out of the public realm and into the courtroom, along with the requested remedy, raised a thorny issue: whether the First Amendment permitted the government to interfere in this debate about shoes and sweatshops.