The trio was arguing for a context-based approach to deciding First-Amendment questions. Thus, in their judgment, the mere identity of the speaker was inadequate. And the mere abstract labeling of Nike’s expression as “commercial” was likewise insufficient. Also important, though discussed late in their brief, was the absence of any harm to consumers:
There is no suggestion that consumers received Nike products of lesser quality or at a higher price than they bargained for, much less that they bought Nike products that were in any respect defective or dangerous; indeed, none of the statements on the basis of which the court below has held petitioner liable to suit even addressed such matters.127
Paul Hoeber, aided by Alan Caplan and others, rose to the challenge cast by the forceful trio. They devoted almost half of their merits brief to contesting Nike’s right to bring this case before the Justices. Even after the Court had agreed to review the case, Hoeber argued that “[t]he Court has no jurisdiction in this case.”128 Though many thought that issue now settled, the Respondent pressed it vigorously nonetheless, a move that would prove prophetic.
On the free-speech front, the Respondent’s brief moved along five discernible steps of analysis:
Step 1: The California regulatory scheme contained safeguards to discourage unfounded actions against commercial speakers:
California law embodies important safeguards and protections for defendants in these private-plaintiff actions. First and foremost, private plaintiffs who have not suffered an injury have no financial incentive for bringing suit. . . . [T]he unfair-competition and false advertising laws do not permit the recovery of damages. Thus, successful plaintiffs receive no recovery for themselves, and they receive no “bounty” from any other recovery, as they do, for example, under the federal False Claims Act.129
Building on that line of logic, Hoeber argued:
Moreover, in cases brought by private plaintiffs under these laws, the defendant’s financial exposure is limited. Not only can there be no recovery of damages, there can be no disgorgement of profits and no use of the class-action remedy of disgorgement into a fluid recovery fund. Thus, in these cases, the only available monetary remedy is restitution, which is limited to “[a]ctual direct victims of unfair competition.” This means that, when a trial court awards restitution, it must use a claims procedure that requires “notify[ing] the absent persons on whose behalf the action is prosecuted of their right to make a claim for restitution.” Hence, in a case like this one, restitution is limited to those identified claimants who relied on the defendant’s false representations in buying its product and who make individual claims for refunds.130
Step 2: Nike’s speech was commercial and could be regulated accordingly. In developing this argument, it is significant that the Respondent drew from the brief filed by the United States in support of Nike:
Representations concerning a company’s production practices give consumers information to rely on in making informed purchasing decisions, as the United States points out: “In today’s environment, the means used to produce goods, no less than the quality of the goods themselves, have profound significance for some consumers, who are willing to pay more to achieve desirable environmental or social ends.”131
Step 3: The Federal Trade Commission has long regulated, as commercial speech, corporate statements concerning things other than the price and character of consumer goods or services. It has, for example, “regulated claims that a product is of U.S. origin under § 5 of the FTC Act” and has likewise “determined that false representations that goods are made by members of a labor union violate § 5.”132 Similarly, the government has often regulated corporate statements concerning the working practices related to production, just as it has regulated corporate statements related to the environmental consequences of production.133
Step 4: Nike’s statements were sufficiently specific and product-related to warrant the conclusion that they were intended to have a commercial effect:
Nike sought to maintain its sales and profits by appealing to consumers, such as directors of athletics, who would believe its representations about the conditions in its production facilities and therefore buy its goods. In making these representations, then, Nike’s purpose was “to affect purchasing decisions by the receivers of the information.”134
Step 5: There was no disparity of treatment here between commercial and non-commercial speakers. The law had not been used exclusively to single out corporations, as evidenced by the fact that public interest groups had been sued by corporations for false statements: “[D]amages suits can be and are brought against noncommercial speakers, including ‘media’ defendants, for false statements about a company’s products, even where the noncommercial speech concerns issues of public health and safety.”135
Obviously, there was more, including a reply brief for the Petitioners.136 But if the main analytical and doctrinal cards had not yet been played, they would be soon by a bevy of briefs filed by a variety of interested third parties.
