Beyond all the talk about the Nike-Kasky settlement, there lingered a disturbing question for the shoe manufacturer: Could the company be sued by some other anti-sweatshop activist under the same California statute and based on the same kind of cause of action? If so, then the settlement with Kasky would be of little practical consequence since someone else could assume an enforcement role as a new private attorney general. But as fate, and the sage advice of counsel, would have it, the time had already tolled under California’s statute of limitations260 for filing such an action unless Nike were to make some new statements about the matter.
Though Nike was out of the litigation picture, the California Supreme Court’s ruling nonetheless remains controlling within the boundaries of the state and for all businesses that make minimum contacts there. That ruling means, quite simply, that corporate entities would do well to think twice before entering into any public debate over concerns about how they do business, lest they be sued in state court with no realistic possibility of removal to a federal court.261 As Bob Liodice, president of the Association of National Advertisers, complained: “While Nike I’m sure is pleased this is now behind them, for the balance of the industry we’re sort of in ‘Nowhere Land.’”262
That “nowhere land” was “neither ethereal nor abstract,” according to Bruce W. Sanford and Robert D. Lystad, two noted media lawyers with the firm of Baker & Hostetler.263“After the California Supreme Court decision,” they noted, “Nike took a number of self-censorship steps. It declined to release its Corporate Responsibility Report, refused to pursue a listing in the Dow Jones Sustainability Index, and declined dozens of invitations to speak on corporate responsibility issues.”264
To buttress their claims about the chilling effect of Nike, Sanford and Lystad offered the following hypothetical:
A drug company announces a cutting-edge treatment for bone cancer. The media and independent public interest groups raise questions about the effectiveness of the treatment and its potential side effects. Through press releases and in response to reporters’ inquiries, the company publicizes the results of an independent and legitimate scientific study it commissioned on the treatment. The company’s characterizations about the results of the study directly contradict other analyses publicized in the news media. A scientist who disagrees with the company’s characterizations sues the company for false advertising.265
As fate had it, the hypothetical world soon became real, as evidenced by a suit brought by People for the Ethical Treatment of Animals (PETA) against Kentucky Fried Chicken (KFC) several months after Nike was handed down. PETA took KFC to court for allegedly making false statements on its website concerning its treatment of chickens.266 The suit was dropped when KFC agreed to amend various statements on its website.267 Notably, anti-corporate activist groups have not been the only entities to appreciate the potential impact of such litigation. Consider, for example, the suit filed by the giant Monsanto against a small dairy concerning statements on the dairy’s milk labels related to the use of hormones in milk.268
Do such prospects, real and hypothetical, signal the impermissible abridgement of corporate speech, or do they signal a permissible check on the power of corporations to mislead or deceive the public? How that question is answered depends entirely on one’s view of commercial speech—what it is, why we value it, and whether it should be restricted in order to safeguard the public welfare. Such inquiries are the topics of the contributions to this Symposium, which we next ponder.
