The US Supreme Court has agreed to review a California court ruling against Nike that the company claims is a restriction on its freedom to talk publicly about social responsibility issues.
The company asked the Supreme Court to review the Nike v Kasky case late last year. The California court ruling, delivered in May 2002, was the result of a lawsuit filed in 1997 by environmental activist Marc Kasky, who accused the company of violating California’s trading and advertising laws by refuting allegations that it used sweatshop labour.
The court ruled that Nike had made public statements defending its foreign labour practices ´for the purpose of promoting sales of its product’ – and that if those statements were subsequently shown to be incorrect they would infringe state laws on advertising that bar ´false and misleading commercial messages’.
At issue, claims Nike, is whether a company’s public statements about its operations are entitled to the same constitutional protection that its critics enjoy. It has suspended publication of its latest CSR report in light of the judgment.
Briefs will now be filed with the Supreme Court setting forth the arguments on both sides. The Court will then hear oral argument. A decision will probably not be announced before the autumn.
Nike’s challenge to the California ruling is supported by the US Chamber of Commerce, among others. Nike’s counsel Laurence Tribe said he was hopeful the company’s argument, that the state court’s judgment ‘appears contrary to years of Supreme Court rulings encouraging free speech’, will prevail.