The Parties Settle

The lawsuit projected to mark a new day in commercial speech doctrine would quickly be forgotten. Absent some First Amendment precedent in the U.S. Reports, the Nike controversy would fade into oblivion. And that was exactly what the Beaverton-based company might have desired. At least that is the result that Nike secured on September 12, 2003, when it agreed to settle its case with Marc Kasky.²⁴⁴ Jim Carter explained that the company chose to settle because the federal high Court’s dismissal “left us with no satisfactory comfort that we could get back to the Supreme Court.”²⁴⁵ For Walter Dellinger, one of the company’s Supreme Court lawyers, the future of the case would be bleak:

As much as Nike cared about the 1st Amendment issues, we realized there was no way to get the 1st Amendment issue back to the U.S. Supreme Court unless Nike were to lose at trial and all the way up the ladder, which is not a very attractive or likely prospect.²⁴⁶

The terms of the otherwise secret settlement were: $1.5 million to be paid to the Fair Labor Association, a worker rights group in Washington, D.C., and at least $500,000 a year in funding paid for micro-loan programs that subsidize the entrepreneurial ventures of aspiring foreign employees and for educational forums in Nike’s partner-factories.²⁴⁷ It remained unknown whether Nike paid any or all of the substantial litigation costs incurred by Kasky’s lawyers or an award to Kasky himself.²⁴⁸ Likewise, it was unknown whether there were any restrictions placed on Kasky and his lawyers regarding public statements about the case or settlement.

What is known, however, is that Nike never conceded that its contested statements were false and misleading.²⁴⁹ Even more significantly, the settlement “leaves in place a 4-3 decision of the California Supreme Court that continues to be very troublesome for companies that participate in debate on public issues,”²⁵⁰ Dellinger noted.

Predictably, the well-crafted statements for the press issued by the adversaries were conciliatory, justificatory, and even celebratory. “Mr. Kasky is satisfied that this settlement reflects Nike’s commitment to positive change where factory workers are concerned,”²⁵¹ said his attorney, Patrick Coughlin. “Nike did make a lot of changes,” Coughlin continued, “[i]t brought their attention to a lot of things, and that was the point of the case.”²⁵² In a similar tone, Nike spokeswoman Maria Eitel addressed the company’s more sophisticated understanding of the global workers-rights concerns reflected in the case: “We have learned a great deal in the five years since this case was first filed about the challenges we and others face in addressing issues in manufacturing environments.”²⁵³