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Nike Denied First Amendment Defense

Several people have written in about an interesting decision handed down by the California Supreme Court. Nike, which has been repeatedly criticized for sweatshop practices in its contractors' factories, has made a variety of statements to the press contradicting these allegations (although in general, third-party examinations find them to be substantiated). A lawsuit was filed, charging the company with deceptive advertising under California law, and Nike was accused of trying to greenwash its image. Nike claimed that the First Amendment prevented it from being sued for these statements. The first courts to look at the case agreed with Nike; the California Supreme Court agreed with the plaintiffs and allowed the suit to proceed. (See also Nike's press release.) There are all sorts of interesting issues raised concerning corporate and commercial speech, the protection it has/ought to have, etc. There's a law.com article that goes a little more into the legal issues.

27 of 371 comments (clear)

  1. The basic fact by Anonymous Coward · · Score: 1, Insightful

    -Is that I shouldn't try to post with a parrot biting my ear, thus the blank post above.....

    Sorry, the basic fact is that Nike is trying to have it both ways:
    1-"we have the rights of an individual"
    2-"we do not have the responsibilities of an individual, we have all the shielding of a corporation"

    A quote from theire website makes me want to just play a sad violin ...

    "The majority's conclusion that Nike's statements are commercial speech and subject to state court regulation, supported by only four of the seven justices, sets a dangerous precedent by restraining companies, such as Nike, from making public statements about their business practices when challenged in the arena of public debate..."

    IOW "gee we cant lie about our use of sweatshops any more".

    Yes, and their shoes suck.

  2. Re:Fraud is Illegal by Surak · · Score: 3, Insightful

    Yeah, otherwise, "our advertising claims that our shoes are made out of leather, when they are in fact made out of naugahyde, while they were false, are protected from liability because of the 1st amendment."

    I mean, come on... I'm all for free speech and whatnot, but making blatantly false statements in a deliberate attempt to deceive the public does NOT fall under first amendment protection.

  3. Can you say "double standard"? by phillymjs · · Score: 5, Insightful

    So, let's see... when Nike misrepresents itself to the public about how it really abuses human rights according to its own internal audit, they say that that's just them exercising free speech.

    But just try to exercise your constitutional right of free speech by creating a website critical of Nike (or most other megacorporations, these days), and their lawyers will try and in most cases succeed at crushing you, leaving nothing but a smoking crater in their wake.

    I guess in addition to yelling "Fire!" in a theater full of people, it's also wrong to yell "Sweatshop!" in a factory in Thailand full of orphans sewing the "Swoosh" on shitty sneakers at midnight. :-)

    On the plus side, at least I don't have to change my spending habits-- since I prefer plain, black sneakers and Nike only sells shoes that, if they were cars, would have been driven by pimps in the 70's.

    ~Philly

  4. "Free speech" and corporation slaves by giminy · · Score: 3, Insightful

    "If Nike's position were the law, then a company could make blatantly false statements as long as they included something in there that looks like its part of a public debate," said Alan Caplan.
    Damn straight. I do not have a right to make deceptive/false claims like this, neither should a company.

    My own thought on having US based corporations manufacture goods outside the country? The United Streets should view those factories as being within the US, and charge applicable fines to corporations that abuse their employees (by United States standards). If the company doesn't like it, fine, they can move their business to the other country. Of course, then they should pay stiff import fees, as in charge enough money to not make it worth it for the company. Problems with this?

    Well sure there are some to consider...how do you decide what "minimum wage" is in another country? $5 an hour in some third world country would make you rich enough to create a military rivalling your government's, probably. So that's something I couldn't answer. But the law guys should think about this....

    --
    The Right Reverend K. Reid Wightman,
    1. Re:"Free speech" and corporation slaves by pangur · · Score: 2, Insightful

      Perhaps France could have that capability too, and could sue websites that sell illegal Nazi memorabilia even if the website is based outside of the country.

      The crux of your argument if that if a company does something wrong outside the country while doing business, then they should be able to be punished inside their home country for those practices.

      Maybe Japan should be allowed to have a male-dominated factory in the US because that is how Japanese factories are run. If a US division of Honda promotes a woman to an executive position, then the promoter could be laid off for violating corporate policy. Maybe a Saudi company could ban women altogether from the workplace. Discrimination? Nope, just following the policy of the home country.

      Legislating US behavior outside the country will not solve the problem. While in your case it might help this sweatshop problem, but it introduces a dangerous precident of helping to reduce a nation soverignty(sp?)when the host country's policy is different than you might like.

  5. Out of touch judges by DNS-and-BIND · · Score: 5, Insightful
    One of the judges that wanted Nike to win said,
    "Nike's speech, in an attempt to influence public opinion on economic globalization and international labor rights and working conditions, gave the public insight and perspective into the debate. This speech should be fully protected as 'essential to free government.'"
    Let me get this straight, Nike issues statements denying it runs sweatshops because it wants to contribute to some kind of public debate!? Nike's one and only consideration is maximizing profits, nothing more. The judges were right, it's commercial speech.
    --
    Shutting down free speech with violence isn't fighting fascism. It IS fascism!
  6. ACLU On Nike's Side? by UberOogie · · Score: 4, Insightful
    Nike's position was strongly supported by the ACLU, which joined Nike in opposing this case on the basis that it violated the First Amendment.

    I don't always agree with the ACLU's choice of clients or their politics, but I understand their absolute need to be there to defend people and personages that the general public wouldn't defend, but since WHEN do corporations have the right to free speech, especially deceptive speech?

    The ACLU is absolutely, unflinchingly wrong in this case.

    --
    "Enough of this wretched, whining monkey life." -- Marcus Aurelius, _Meditations_, Book 9, 37
  7. Good quote by interiot · · Score: 5, Insightful
    • "Full free speech protection for one side and strict liability for the other will hardly promote vigorous and meaningful debate."

    Exactly. When Nike said those things, they weren't directly describing a product they were selling. It was more of a debate.

    One could argue that such things may be black and white, so no debate is needed. But such issues never are. Sometimes issues can't be reduced to a simple one sentance soundbite. We've all seen news articles where a quote is taken out of context, allowing it mean sometime more sinister than the situation actually is, even though the brief statement may be literally true. In these cases, the accused should be able to elaborate on some of the details.

    However, if this ruling stands, special interest groups will be able to express any complaint they wish, and corporations will be more likely to just say "we can't confirm or deny that accusation" no matter how truthful or baseless the accusation is. This will make corporate secrecy even worse.

  8. Re:Lying by Cryogenes · · Score: 4, Insightful

    Like other human rights, free speech is for people. There is no point in extending this right to corporations in general.

    In particular, companies should not be allowed to lie.

  9. Free speech, like free software, isn't "free" by meta · · Score: 3, Insightful

    Blackstone, the revered legal authority at the time of the writing of the First Amendment, made what I think is the definitive statement on the limits of free speech.

    "The liberty of the press is indeed essential to the nature of a free state; but this consists in laying no previous restraints upon publications, and not in freedom from censure for criminal matter when published. Every freeman has an undoubted right to lay what sentiments he pleases before the public; to forbid this, is to destroy the freedom of the press: but if he publishes what is improper, mischievous, or illegal, he must take the consequences of his own temerity. To subject the press to the restrictive power of a licenser, as was formerly done, both before and since the Revolution, is to subject all freedom of sentiment to the prejudices of one man, and make him the arbitrary and infallible judge of all controverted points in learning, religion and government. But to punish as the law does at present any dangerous or offensive writings, which, when published, shall on a fair and impartial trial be adjudged of a pernicious tendency, is necessary for the preservation of peace and good order, of government and religion, the only solid foundations of civil liberty. Thus, the will of individuals is still left free: the abuse only of that free will is the object of legal punishment. Neither is any restraint hereby laid upon freedom of thought or inquiry; liberty of private sentiment is still left; the disseminating, or making public, of bad sentiments, destructive to the ends of society, is the crime which society corrects."

    (Blackstone's Commentaries on the Laws of England)

    Under the California ruling, Nike has lost neither its right to free speech nor its responsibility for the consequences. This is as it should be.

    --
    Sometimes they fool you by walking upright.
  10. And this is News for Nerds... by Gibbys+Box+of+Trix · · Score: 1, Insightful

    ...How, exactly?

    1. Re:And this is News for Nerds... by saihung · · Score: 3, Insightful

      Well, this article has a couple of hundred responses, so apparently the nerds themselves believe this is relevant.

  11. Re:Why do corps have freedom of speech at all? by rkent · · Score: 3, Insightful

    But if corporations don't have free speech, doesn't that mean that the people who work for corporations also don't have free speech?

    Not at all. That's the thing - you don't become part of the corporation at all, ever, even if you devote your entire life to it. I'm not arguing against the right of individual people to say anything at all that they wish, but instead the ability of using a "corporate veil" to say things that aren't legally tied to any one person. Like company policy statements, for example.

    Isn't a corporation just a collection of individuals, no matter how much the Left tries to depersonalize things?

    I think that's a bit disingenuous. For one thing, no, a corporation isn't just a collection of individuals, it's a legal abstraction designed to protect the people behind it from liability for actions taken on behalf of the corporation. In general, this is a good thing; I don't think every sigle employee of Enron should be able to be sued by its creditors, for example.

    But the end result is that the corporation itself has virtually no liability: it is a profit-driven entity, with no duties beyond making money for the shareholders. It seems like this is the depersonalizing part: a legal entity motivated only by profit can create all kinds of pollution, squalid working conditions, unsafe products, you name it, and they have way more rights to do all this than any of us have to resist it.

  12. Other corporate rights by IntelliTubbie · · Score: 5, Insightful
    To me, the whole problem starts with "Santa Clara vs. Southern Pacific Railroad," in which the (US) Supreme Court ruled that a corporation is a natural person for the purposes of constitutional rights protections. Which I think is a crock. A corporation shouldn't be entitled to free speech under Article I because it's not a person. It's a legal abstraction.

    Then I suppose you think corporations (including non-profit corporations, of course) should be denied:
    • the right to be free of religious persecution -- the government can freely discriminate against Jewish, or Muslim, or atheist corporations (1st amendment).
    • the right to be free from unreasonable search and seizure -- Uncle Sam can just walk into your small business without a warrant and take your stuff. (4th amendment)
    • the right to due process (5th) and speedy and public jury trials for criminal offenses (6th) -- the government can shut your business down without reason and without telling you what you've been charged with, and give you a secret trial or delay the trial indefinitely.

    It's easy to bash corporations (and good for a few karma points), but try to imagine a free society where the above situations are possible. Imagine what would happen not just to our economy, but to our society -- many charities and universities are non-profit corporations -- if these rights didn't exist.

    Remember, the Bill of Rights doesn't "give" rights to anyone -- it only prevents the government from taking them away.

    Cheers,
    IT
    --

    Power corrupts. PowerPoint corrupts absolutely.

    1. Re:Other corporate rights by Hard_Code · · Score: 4, Insightful

      "the right to be free of religious persecution"

      Corporations have religions?

      "the right to be free from unreasonable search and seizure -- Uncle Sam can just walk into your small business without a warrant and take your stuff. (4th amendment)"

      Correct...they don't have the *RIGHT* to be free from unreasonable search and seizure because they are not *PERSONS*. Now sure, they can have a reasonable *expectation* to be free from unreasonable search and seizure, but since corporations are (supposedly) beholden to the public who gave them their charter, their privelages, and their responsibilities - then YES the public should be able to execute inquiries into a corporations behavior at any time. Of course this DOESN'T happen all the time because just because we can do it, doesn't mean we have to be jerks and do it. Most of the time there is no reason to.

      "the right to due process (5th) and speedy and public jury trials for criminal offenses (6th)"

      Yeah, that sucks doesn't it? Poor poor legal abstraction, let me weep for thee. On the other hand, large corporations have the money to tie the courts up forever, often to the point that the public just gives up.

      "imagine a free society where the above situations are possible."

      Gladly.

      "many charities and universities are non-profit corporations"

      Uh, I'd be *highly* suspect of a "non-profit charity" whatever the hell that is. And for what it is worth, YES, I think universities should be open to public inspection and critique.

      Other corporate rights (Score:2)
      by IntelliTubbie on 01:01 PM May 4th, 2002 (#3462838)
      (User #29947 Info)
      To me, the whole problem starts with "Santa Clara vs. Southern Pacific Railroad," in which the (US) Supreme Court ruled that a corporation is a natural person for the purposes of constitutional rights protections. Which I think is a crock. A corporation shouldn't be entitled to free speech under Article I because it's not a person. It's a legal abstraction.

      Then I suppose you think corporations (including non-profit corporations, of course) should be denied:

      the right to be free of religious persecution -- the government can freely discriminate against Jewish, or Muslim, or atheist corporations (1st amendment).

      the right to be free from unreasonable search and seizure -- Uncle Sam can just walk into your small business without a warrant and take your stuff. (4th amendment)

      the right to due process (5th) and speedy and public jury trials for criminal offenses (6th) -- the government can shut your business down without reason and without telling you what you've been charged with, and give you a secret trial or delay the trial indefinitely.

      It's easy to bash corporations (and good for a few karma points), but try to imagine a free society where the above situations are possible. Imagine what would happen not just to our economy, but to our society -- many charities and universities are non-profit corporations -- if these rights didn't exist.

      "Remember, the Bill of Rights doesn't "give" rights to anyone -- it only prevents the government from taking them away."

      Fine, then corporations can simply give up the benefits of being a corporation (we certainly wouldn't want to impose by *giving them* any special privelages). Corporations can just dis-incorporate, give up any special privelages that were granted to them, and revel in their freedom!

      --

      It's 10 PM. Do you know if you're un-American?
    2. Re:Other corporate rights by Chris+Johnson · · Score: 4, Insightful
      In all of these examples, why do you act as if it is a natural right to be able to disclaim any personal responsibility for what you do?

      Sole proprietorships, partnerships, are all liable. It is only the incorporated company that gets to disclaim personal responsibility.

      I have NO problem with the IRS walking into a corporation's premises and taking stuff, if they feel a need to- without any sort of legal process.

      Because the corporation itself is an end-run around legal process, allowing people to conduct business without any trace of responsibility.

      Now, if you have Uncle Sam walking into a sole proprietorship and taking stuff, when the sole proprietorship means a person IS LIABLE for the acts of the business and NOT exempt from this, well, then I have a problem, and I see your point.

      Since a corporation gets to completely shrug off legal liability why should they get the privacy, property, speech rights of entities (people) which ARE liable?

    3. Re:Other corporate rights by sean23007 · · Score: 3, Insightful

      He said none of this. Restricting the right of free speech for corporations would have none of the effects you predict. It would only demand that corporations tell the truth, and that wouldn't shut them down. Unless, of course, they were built on the shifting sands of lies, in which case you have to ask the question: did they deserve good fortune?

      --

      Lack of eloquence does not denote lack of intelligence, though they often coincide.
  13. Free Speech, yeah, right.... by pjrc · · Score: 3, Insightful
    Full free speech protection for one side and strict liability for the other will hardly promote vigorous and meaningful debate.

    If I were engaged in a "public debate" and deliberately spread lies about Nike (or any other major corp), saying they operated sweatshops, dumped toxic chemicals, or any number of other accusations that I knew were false (or that I had just made up and didn't actually have any evidence), and I managed to find someone who'd actually publish the message far and wide...

    Nike would sue me for libel or slander in no time at all.

    But if the dissenting judges get their way, Nike et all will remain above the law when it comes to making deliberately false statements about themselves!

    Individuals and activist orgs (plaintifs) have got to tell the truth, but major corps (defendants) are allowed to lie when speaking to the public. Yeah, right, that'll "promote vigorous and meaningful debate". I'm glad only a minor of the judges bought (or maybe they were "bought" $$$) into this bullshit!

  14. Re: OT: sig issue by Chiasmus_ · · Score: 4, Insightful

    I guess in a book called "Politics", it makes sense that Aristotle plays both sides of the fence

    Aristotle's stance is consistent; it merely doesn't hug one of the extremes.

    One problem today in American politics is that a politician is expected to take an extreme stance, and stick to it, like "Abortions for all!" or "No abortions for anyone!" In my mind, the very fact that both extreme stances exist and conflict is essentially proof that neither one in and of itself is correct.

    Aristotle is right on both counts; 1) there needs to be a way for laws to adapt when conditions render them obselete; and 2) there needs to be a system set up so that laws can't be changed based on the whims of the moment.

    I think the U.S. actually follows these guidelines pretty well; it takes so many votes to amend the constitution that we've really only done it a handful of times. Amendments like the "flag-burning amendment" or "abortion amendment" or "health insurance admendment" have been thought too frivolous to really have to go that deeply into our legal system. Really, with the exception of prohibition, most of the amendments have been absolutely necessary as times changed. Women's sufferage isn't something that should come and go as the national mood changes, but it is certainly something that needed to be implemented when various technologies drastically changed the role of the woman in society.

    --
    "Beware he who would deny you access to information, for in his heart he deems himself your master."
  15. Freedom for US, none for THEM by Kohath · · Score: 2, Insightful

    It's been pretty clear for a while now. The consensus on Slashdot is that freedom is something to be protected for us and our friends, and something to be taken away from our enemies. Because we hate them, I guess.

    This goes for free speech too now. At least it's consistent.

  16. That's RICH... by mcrbids · · Score: 3, Insightful
    So, does this mean that we can now sue Microsoft for all the FUD they plaster all over their website about what's legal and what's not?

    What I find endless amusement in reading /. is statements like the above.

    Lawyers have done an amazing job of compartmentalizing the applicability of ANY decision. That's why you need lawyers to decipher the law!

    For example, a case hits the California district court, where a case is one that sets a precedent.

    So, there you are, in Oregon, 10 miles from the California border. Think that District court decision applies?

    NOT!

    Take a look at the case. The only thing decided here is that Nike cannot use "Freedom of speech" to defend their case.

    Nowhere does this decision say anything about incurring liability, thus this sets no precedent for a suit.

    Talk to a lawyer some time. Spend a few hours at it. If you can get a lawyer friend or something to tell you all about it, you'll realize that they are just as knowledge about "Bills of attainder" and "writs of something-or-rather" as an experienced programmer must be in APIs, algorithms, and protocols.

    Just as there is a S--tload of sloppy, crappy software developed by wannabes in their spare time, there is a similar sized load of legal advice by wannabe paralegals.

    It'd be nice if this DID set a precendent in that regard. The idea of corporations having "constitutional rights" I find to be a sick perversion of society.

    And, both Nike and Walmart certainly have my distaste.

    --
    I have no problem with your religion until you decide it's reason to deprive others of the truth.
  17. Re:Nike SHOULD have the same right... by dhogaza · · Score: 4, Insightful

    No, it's not shutting them up at all. The ruling merely says that the suit attempting to prove that Nike's ads are false and misleading can go forward.

    Nike was trying to preemptively strike down the suit before the substantial issues in the case could be heard.

    They're free to continue running the ads.

    Let me guess - YANAL, right?

  18. Nike not the real villain by pussyco · · Score: 3, Insightful
    When the peasants in a third world country want a new X-ray machine for the local hospital, they do not refine their own tungsten for the anode, nor wind their own high voltage transformers, nor build their own vaccuum pump. They grow their crops, weave their cloth, and trade.

    We in Europe and also the USA make life hard for them by keeping their food and their textiles out of our markets. So they have to turn to other work, such as making trainers for Nike. The real villains are the Protectionists, who wage economic warfare against the poor of the world with trade barriers.

    Am I a shill for Nike? Read my declaration of interest

  19. Re:Nike SHOULD have the same right... by darkonc · · Score: 4, Insightful
    This is really very much like a libel or slander case. The company is speaking about a specific party (themselves) with speech that is likely to cause injury to someone (the public).Although the parties affected by the 'libel' are unusual, I think that it's quite reasonable to apply the legal principles around libel to a case such as this.

    If Nike had won this case, it would meant that corporations would be able to lie through their teeth with impunity.

    The court made a distinction:

    When talking about general public policy issues, Nike has the right to say whatever they want with full first amendment protections.

    When speaking about NIKE policy issues, they have to be truthful.

    This is not an onerous or unreasonable demand: Nike has a unique ability to know definitively what their own policy and aproaches are, and -- for the most part -- the public generally has to accept what they say as the truth because it's usually rather difficult to do the work it takes to independently investigate the truth of such statements.

    If what a company is doing is nasty, underhanded and disgusting, they may also be uniquely motivated to lie about what they're doing.

    This also doesn't specially bind the company in the debate:
    If I knowingly lie about what the company is doing, then I'm subject to a Libel suit (even if I'm not lieing, I could be subject to a SLAPP suit). Similarly, if the company knowingly lies about what they're doing, then they should be subject to a libel suit (or something equivalent to it). This rulling essentially says that they are.

    --
    Sometimes boldness is in fashion. Sometimes only the brave will be bold.
  20. If they're not people, they can't.... by Xtifr · · Score: 4, Insightful

    the right to be free of religious persecution

    People have religions. Corporations, not being people, can't have religions. You might as well talk about corporations wearing blue jeans. The people who own corporations, on the other hand, as well as the employees of those people, may have religions, and discriminating on the basis of the religions of any of those people would remain illegal.

    the right to be free from unreasonable search and seizure

    The people who own the corporations have those rights, so the corporations don't need psuedo-human status to gain those rights. My car doesn't need its own status as a "people" to be free from search and seizure.

    the right to due process (5th) and speedy and public jury trials for criminal offenses (6th)

    People have due process. The officers of the corporation are people, and are responsible for the actions of the corporation that they own and control (just as I'm responsible for the actions of the car that I drive). I mean, it might be nice if my car (not me) got sued after an accident, but it doesn't make any sense, and it doesn't make any sense in the case of corporations either.

    Giving corporations the legal status of property makes far more sense than calling them "people", and doesn't take any rights away from any real person anywhere.

  21. Re:Corporations are not People by Sj0 · · Score: 3, Insightful

    If regular people were immortal, had incredible wealth and power, and had the same privileges corporations have now in addition to the ones granted to them as people, I'd agree with you. As it stands, without some incredible medical, financial, and sociological breakthroughs, I think corporations will have the upper hand for some time in regards to the degree they can use and abuse their powers as "people".

    --
    It's been a long time.
  22. Re:here's the deal by catfood · · Score: 4, Insightful
    Nike claims that it is doing sweatshop workers a service because the workers get paid a higher salary than they would get otherwise if they were working in farming. For the most part this is true. The $100/month that Indonesian workers get paid is more than the median national income.

    I can't speak directly on the specifics of Nike's facilities and those of its contractors. In general, however, these statistics can be extremely misleading. Yes, the sweatshops tend to pay much more in cash than their workers might make on the farm or in their old villages. But their workers may have to move to a larger (more expensive) town to work there, or they might be required to buy uniforms or tools at prices set by the company, that sort of thing.

    More importantly, it's sometimes the case--again speaking very vaguely because I don't know much about this particular company--that the big business interests in poorer countries use illegal (or legal but unethical) means to remove farmers and craftspeople from their farms and villages, where they had lived in a barter or subsistence economy with very little cash.

    For example, a young woman in Country X might be earning in the factory ten times the cash she used to make selling eggs from her family's half-dozen chickens; but back home she had nearly free rent, was able to make her own clothes, and had Grandmother nearby to watch the kids. She might have been poor by our standards on the farm but would have had a reasonably stable life, some control, a family network, and the ability to fall back on neighbors and friends when things went wrong.

    In the factory, her schedule is dictated, the bosses don't know her or care to, even talking to your fellow workers is punished, and everything costs money. She might not have come there in a truly voluntary way. Perhaps the contractor bought all the local farms from the previous landlord and jacked up the rent just to get cheap labor in the factories. Maybe the government radically increased taxes on small farmers to get the same result. Or, in some countries, she may have been just ordered off the farm by corrupt police or government officials.

    I believe that comparing dollars-per-day is dangerously misleading if it's done by the standards of the modern western middle class. Of course you and I know that making ten times as much money per hour is "better." But we're used to paying money for everything, and we don't mind it because of the nice effects of the division of labor that allows. Our job mobility, communication resources, and general ability to control our own lives mean we can hold employers accountable, even in a slow economy. It's not always like that for overseas sweatshop workers--they're far more likely to be evicted from their old villages, and left to work in the factories or starve, than to have freely made a choice to come to the big city for a factory job.

    Sure, it may not be as grim all of the time as I'm making it sound. I'm mainly just objecting to the facile proposition that the higher cash wages from the sweatshop system are incompatible with exploitation.