# Amicus Curiae Brief — Nike, Inc. v. Kasky

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0611%3A05

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2003
- **Citation:** 539 U.S. 654

## Text

&)

No. 02-575

In the

Supreme Court of the United States

+

NIKE, INC., et al.,

Petitioners,
Vv.

MARC KASKY,

Respondent.

+

On Petition for a Writ of Certiorari to the
Supreme Court of California

o

MOTION TO FILE BRIEF AMICUS CURIAE
AND BRIEF AMICUS CURIAE OF PACIFIC
LEGAL FOUNDATION, CALIFORNIA
MANUFACTURERS AND TECHNOLOGY
ASSOCIATION, AND CALIFORNIA CHAMBER
OF COMMERCE IN SUPPORT OF PETITIONERS

—

DEBORAH J. LA FETRA
Counsel of Record
Pacific Legal Foundation
10360 Old Placerville Road,

Suite 100

Sacramento, California 95827
Telephone: (916) 362-2833
Facsimile: (916) 362-2932

Counsel for Amici Curiae
Pacific Legal Foundation, et al.
| a eR LT I EE I EET

i>

MOTION FOR LEAVE TO
FILE BRIEF AMICUS CURIAE

Pursuant to this Court’s Rule 37.2(b), Pacific Legal Foun-
dation, California Manufacturers and Technology Association,
and California Chamber of Commerce respectfully request
leave of the Court to file this brief amicus curiae in support of
Petitioners.' Counsel for Nike consents to the filing of this
brief; however, counsel for Kasky withheld consent.

INTEREST OF AMICI CURIAE

Pacific Legal Foundation (PLF) was founded 29 years ago
and is widely recognized as the largest and most experienced
nonprofit legal foundation of its kind. PLF litigates matters
affecting the public interest at all levels of state and federal
courts and represents the views of thousands of supporters
nationwide. PLF is an advocate for limited government,
individual rights, and free enterprise. PLF established a Free
Enterprise Project in which it submits amicus briefs in cases
impacting America’s economic vitality. For example, PLF filed
amicus briefs in Chevron, U.S.A., Inc. v. Echazabal, 122 S. Ct.
2045 (2002), Adams vy. Florida Power Corp., 122 S. Ct. 643
(2001), and Pharmaceutical Research and Manufacturers of
America v. Concannon, Supreme Ct. Docket No. 01-188. PLF
also filed an amicus brief in this case in the court below.

The California Manufacturers and Technology Association
(CMTA) (formerly the California Manufacturers Association)
works to improve and preserve a strong business climate for
California’s 30,000 manufacturers, processors, and technology
based companies. Since 1919, CMTA has worked with state
government to develop balanced laws, regulations, and policies
that stimulate economic growth and create new jobs while
safeguarding the state’s environmental resources. CMTA

' Pursuant to Rule 37.6, Amici Curiae affirm that no counsel for any
party authored this brief in whole or in part and that no person or entity
made a monetary contribution specifically for the preparation or
submission of this brief.

2

represents businesses from the entire manufacturing
community—a segment of California’s economy that
contributes more than $250 billion annually and employs more
than 2 million Californians.

The California Chamber of Commerce is a voluntary,
nonprofit, California-wide business association with more than
15,000 members, both individual and corporate, who represent
virtually every economic interest in the state. Ninety percent of
the Chamber’s members are small- or medium-sized businesses
which it represents before the Legislature, local governing
bodies, and the courts on a broad range of issues affecting
business. The Chamber is involved with legislative, regulatory,
and judicial issues involving corporate free speech and the
business community.

Amici will augment Petitioners’ arguments by illustrating
the wide range of situations that will be affected by the
California Supreme Court’s decision in this case. Justice
Brown’s dissenting opinion below implored this Court to
review this case and to reconsider the current commercial
speech doctrine, which no longer provides adequate guidance
in a time when commercial and noncommercial speech are
blurred beyond the ability of courts to separate them. Amici
believe that this case presents an adequate record as well as
fully developed legal arguments that make this case appropriate
for review by this Court.

3

For all the foregoing reasons, the motion of Pacific Legal
Foundation, California Manufacturers and Technology
Association, and California Chamber of Commerce to file a
brief amicus curiae should be granted.

DATED: November, 2002.
Respectfully submitted,

DEBORAH J. LA FETRA
Counsel of Record
Pacific Legal Foundation
10360 Old Placerville Road,

Suite 100

Sacramento, California 95827
Telephone: (916) 362-2833
Facsimile: (916) 362-2932

Counsel for Amici Curiae
Pacific Legal Foundation, et al.

i
~ QUESTIONS PRESENTED

1. When a corporation participates in a public
debate—writing letters to newspaper editors and to educators
and publishing communications addressed to the general public
on issues of great political, social, and economic
importance—may it be subjected to liability for factual
inaccuracies on the theory that its statements are “commercial
speech” because they might affect consumers’ opinions about
the business as a good corporate citizen and thereby affect their
purchasing decisions?

2. Even assuming the California Supreme Court properly
characterized such statements as “commercial speech,” does the
First Amendment, as applied to the states through the
Fourteenth Amendment, permit subjecting speakers to the legal
regime approved by that court in the decision below?

TABLE OF CONTENTS

Page
QUESTIONS PRESENTED 2... cccccccccccccccccees i
Be PEED ccc ccccccccccccccccces ill
SUMMARY OF ARGUMENT ...............--00008: |
GEE hbeeeuccendeenssdksedesecdscedenseees 2
I. NIKE’S PETITION SHOULD BE
GRANTED SO THIS COURT CAN
ADDRESS A MATTER OF CRITICAL
PUBLIC CONCERN: THE LEVEL OF
SCRUTINY APPLIED TO SPEECH
UTTERED BY BUSINESS INTERESTS ......... 2

Il. THE CURRENT COMMERCIAL SPEECH
DOCTRINE ANALYSIS IS INADEQUATE
APPLIED TO MARKETERS’ INNOVATIVE
PRESENTATIONS OF CORPORATE SPEECH ... 7

A. Marketing and Advertising Are
No Longer Necessarily Identifiable or

Separable from Noncommercial Speech ....... 9
B. Speech Intended to Bolster a
Corporate Image Should Be Fully
Protected Under the First Amendment ....... 16
ED dcundencceccésccoaccasuscedsnunens 20

TABLE OF AUTHORITIES
Page
Cases
44 Liquormart, Inc. v. Rhode Island,

Ber ED Skcuecodecocescutcesenccences 3
Bates v. State Bar, 433 U.S. 350 (1977) ............... ]
Board of Trustees of the State Univ.

v. Fox, 492 U.S. 469 (1989) ........ cece cee eee 1-2
Bolger v. Youngs Drug Product Corp.,

SPEED San debecancecceséandeeses 8, 10
Central Hudson Gas & Elec. Corp. v. Public

Serv. Comm'n, 447 U.S. 557 (1980) ........... 1-3, 7-9
Citizens United for Free Speech Il v. Long

Beach Township Board of Commissioners,

602 F. Supp. 1223 (D.NJ. 1992) ......cccccccccces 8
City of Cincinnati v. Discovery

Network, Inc., 507 U.S. 410 (1993) ............056. 3
Cohen v. California, 403 U.S. 15 (1971) ............... 4
Commodity Trend Serv., Inc. v. Commodity Futures

Trading Comm'n, 149 F.3d 679 (7th Cir. 1998) ....... 3
Dillon v. Legg, 441 P.2d 912 (Cal. 1968) .............. 7
Edenfield v. Fane, 507 U.S. 761 (1993) .............. 10
First National Bank v. Bellotti, 435 U.S. 765 (1978) ..... 4
Ford Motor Co. v. Texas Dept. of Transp.,

eee 16
Foster-Gardner, Inc. v. National Union |

Fire Ins. Co., 959 P.2d 265 (Cal. 1998) ............. 7

Granite Mgmt. Corp. v. Aetna Cas. & Sur. Co.,
37 Fed. Appx. 262, 2002 U.S. App.
LEXIS 10836 (9th Cir. June 4, 2002) ............... 7

iV

TABLE OF AUTHORITIES—Continued

Page
Greater New Orleans Broad. Ass'n v.
United States, 527 U.S. 173 (1999)... 2... 2. eee ee eee 3
Hornell Brewing Co. v. Brady,
819 F. Supp. 1227 (E.D.N.Y. 1993) ............005: 8
Lorillard Tobacco Co. v. Reilly, 533 U.S. 525 (2001)..... 3

McGregor Co. v. Heritage, 631 P.2d 1355 (Or. 1981) .... 6
MD II Entertainment, Inc. v. City of Dallas,

ee A CE ncn cncnccccesoscecccess 8
Molien v. Kaiser Foundation Hospitals,

od ) TTT 7
Montgomery v. Montgomery,

60 S.W.3d 524 (Ky. 2001) .............0 eee 12-13
New York Times v. Sullivan, 376 U.S. 254 (1964) ........ 4
Nordyke v. Santa Clara County,

Lf po se 8 ree 3
Ohralik v. Ohio State Bar Association,

SE TEED SAS eveccuneceeseseecevecese: l
Oxycal Lab., Inc. v. Jeffers,

909 F. Supp. 719 (S.D. Cal. 1995) ............0005. 3

Planned Parenthood Fed'n of America,
Inc. v. Bucci, 1997 U.S. Dist. LEXIS 3338
(S.D.N.Y. Mar. 24, 1997), aff'd, 1998 U.S.
App. LEXIS 22179 (2d Cir. Feb. 9, 1998),

cert. denied, 525 U.S. 834 (1998) ................. 16
Posadas de Puerto Rico Assocs. v.
Tourism Co., 478 U.S. 328 (1986) ............0055. |

Quinn v. Aetna Life & Casualty Co., 482 F. Supp. 22
(E.D.N.Y. 1979), aff'd, 616 F.2d 38 (2d Cir. 1980) ... 19

——

Vv

TABLE OF AUTHORITIES—Continued

Page
Quinn v. Aetna Life & Casualty Co.,

96 Misc. 2d 545, 409 N.Y.S.2d 473 (1978) ...... 18-19
R.A.V. v. City of St. Paul, 505 U.S. 377 (1992) .......... 8
Rubin v. Coors Brewing Co., 514 U.S. 476 (1995) ...... 10
Rutledge v. Liability Ins. Indus..,

487 F. Supp. $ (W.D. La. 1979) ...... ccc ececeess 19
U.S. Healthcare, Inc. v. Blue Cross of Greater

Philadelphia, 898 F.2d 914 (3d Cir.),

cert. denied, 498 U.S. 816 (1990) ..............045. 9
Valentine v. Chrestensen, 316 U.S. 52 (1942) ........... ]
Valley Broadcasting Co. v. United States,

107 F.3d 1328 (Sth Cir. 1997)... ... cece cece eee: 8
Vidal Sassoon, Inc. v. Bristol-Myers Co..,

Se a BED ec ccedccccdnsceceses 20
Village of Schaumburg v. Citizens for a

Better Environment, 444 U.S. 620 (1980)............ ]
Virginia State Bd. of Pharmacy v. Virginia Citizens

Consumer Council, Inc., 425 U.S. 748 (1976) ...... 1,7
W.C. Richards Co. v. Hartford Accident &

Indem. Co., 724 N.E.2d 63 (Ill. 1999)... ............. 7
Ward v. Rock Against Racism, 491 U.S. 781 (1989) ..... 12
Zauderer v. Office of Disciplinary Counsel of

Supreme Court of Ohio, 471 U.S. 626 (1985)....... 8-9

Miscellaneous
Abrams, Floyd, A Growing Marketplace of

Ideas, Legal Times, July 26, 1993, atS28 ......... 2-3

Ad Follies, Advertising Age, Dec. 24, 1990, at24 ...... 10

vi

TABLE OF AUTHORITIES—Continued
Page

Binole, Gina, After Buying MacBlo, Weyerhaeuser
Won 't Commit on Clear-Cutting, Portland Bus. J.
(June 28, 1999) (http://forests.org/archive/
canada-/weywonts.htm) (visited Oct. 24, 2002) ...... 17

Deutsch, Askan, Sports Broadcasting and Virtual
Advertising: Defining the Limits of Copyright
Law and the Law of Unfair Competition,
11 Marq. Sports L. Rev. 41 (2000) ..............-. 13

Edsall, Thomas B., Drug Industry Financing
Fuels Pro-GOP TV Spots, Washington Post,

i ce ees 19
Elliott, Stuart, Real or Virtual? You Call It, '
New York Times, Oct. 1, 1999, atCl .............. 13

Emord, Jonathan W., Contrived Distinctions:
The Doctrine of Commercial Speech in
First Amendment Jurisprudence, Cato
Policy Analysis No. 161 (1991) ............00005- 18

Epstein, Robert, Public-Interest Group
Tilts at Commercial Windmills,
i rr i ee ce eceetesneees 1]

Farber, Daniel, Commercial Speech
and First Amendment Theory,
Fee De Ee Ce DUTT 6 bo hbkecdevcesececs 18

Goldberg, Michelle, Confessions of an
Undercover Drink Fink, Salon (Dec. 9, 1997)
(http://www.salon.com/media-/1997/12/
09media.html) (visited Sept. 28, 2002) ............. 14

Grodin, Joseph R., Are Rules Really Better

Than Standards, 45 Hastings L.J. 569 (1994) ......... 6

Vii

TABLE OF AUTHORITIES—Continued
Page

Harrelson, Michael, The Fat Man Sings:
Meet the 300-Pound Guerrilla of Undercover
Marketing, Nightclub & Bar Magazine
(Feb. 2002) (http://www.nightclub.com/
magazine-/February02/cover.html)
SE SL LEED Scdcnbecodeedceceseosess 14

Hartman, Cathy L. & Beck-Dudley, Caryn L.,
Marketing Strategies and the Search for
Virtue: A Case Analysis of The Body Shop,
International, 20 J. of Bus. Ethics 249-63 (1999)... 17-18

Kershen, Drew L., Professional Legal
Organizations on the Internet: Websites

and Ethics, 4 Drake J. Agric. L. 141 (1999) ......... 16
Khermouch, Gerry & Green, Jeff, Buzz Marketing,
Business Week, July 30, 2001, at54............... 14

Kozinski, Alex, & Banner, Stuart,
Who's Afraid of Commercial Speech,
Fee Pi ee a ET CU ad decdecccctcecsess 4,8, 12

Lin, C.C. Laura, Note: Corporate Image
Advertising and the First Amendment,
GS Be Gees Gee ES PRUE 0 wc ccccccecvescscccs 16

Lively, Donald E., The Supreme Court and
Commercial Speech: New Words with

an Old Message, 72 Minn. L. Rev. 289 (1987)........ 8
Loving, Paul E., The Justice of
Certainty, 73 Or. L. Rev. 743 (1994) ............... 6

Madow, Michael, Private Ownership of
Public Image: Popular Culture and
Publicity Rights, 81 Cal. L. Rev. 125 (1993) ........ 11

Vili

TABLE OF AUTHORITIES—Continued
Page

Nord, Thomas, Stealth marketing—is it the
next big thing or just a big fat flop?,
The Courier-Journal (Louisville, KY)
(August 3, 2001) (http://www.courier-
journal.com/features/columns/popculture/
fe20010803pop.html) (visited Sept. 24, 2002)....... 14

Peterson, Melody, Heartfelt Advice, Hefty
Fees: Side Effects of Celebrity Drug
Pitches Debated, New Y ork Times,

FE, Fes se AE © KG ho 6d wee se ceccdcneaens 11-12
Post, Robert, The Constitutional Status of
Commercial Speech, 48 UCLA L. Rev. 1 (2000) ...... 8

Rees, Victona L., AJDSphobia: Forcing Courts
to Face New Areas of Compensation for Fear

of a Deadly Disease, 39 Vill. L. Rev. 241 (1994)...... 7
Rothenberg, Randall, Now, Novels Are Turning
Promotional, N.Y. Times, Jan. 13, 1989, atDS ...... 1]

Shiffrin, Steven, The First Amendment and
Economic Regulation: Away From a
General Theory of the First Amendment,
Fee a er I CUE ok cece cS cccececévens 3

Smolla, Rodney A., /nformation, Imagery,
and the First Amendment: A Case for
Expansive Protection of Commercial
Speech, 71 Tex. L. Rev. 777 (1993) ............. 9-10

Snyder, Steven L., Note: Movies and
Product Placement: Is Hollywood
Turning Films into Commercial Speech?
ote ee FL Brrr 10-11

ix

TABLE OF AUTHORITIES—Continued
Page

Stafford, Leon/Cox News Service, Use of ‘stealth’
marketing raises questions of ethics
(Aug. 29, 2002) (http://www.coxnews.com/
newsservice-/stories/2002/0829-STEALTH-
ADS-COX.html) (visited Sept. 24, 2002) ........... 1]

Subcomm. on Administrative Practice and Procedure
of the Senate Comm. on the Judiciary, Sourcebook
on Corporate Image and Corporate Advocacy
Advertising, 95th Cong., 2d Sess. 1149(1978) ...... 16

Tincher, Rex, Stealth Marketing in Usenet
News Groups (http://216.239.53.100/
search?q=cache:pra0aYbfAtwC:www.
dnaco.net/~tinc/stealth.htm+stealth+
marketing+usenet&hl=en&ie=UTF-8)
ed eee hte dbeseccknew ius 15

Vranica, Suzanne, Advertising: That Guy
Showing off His Hot New Phone May
Be a Shill, Wall St. J., July 31, 2002, atBl ...... 13-14

Website for Evenflo products,
http://www.evenflo.com/ yb/index.phtm!
ee re |

Website for Gerber products,
http://www.gerber.com/ main.asp
Ce ED ao ka 0 a owns espns teens 15

sn"

1

SUMMARY OF ARGUMENT

In the past 60 years, this Court’s approach to speech
uttered by business interests ranged from zero protection
(Valentine v. Chrestensen, 316 U.S. 52 (1942)), to very high
protection (Virginia State Bd. of Pharmacy v. Virginia Citizens
Consumer Council, Inc., 425 U.S. 748 (1976)), to a four-part
test (Central Hudson Gas & Elec. Corp. v. Public Serv.
Comm 'n, 447 U.S. 557, 564 (1980)), which has itself undergone
revision (Board of Trustees of the State Univ. v. Fox, 492 U.S.
469, 480 (1989) (upholding a regulation outlawing Tupperware
parties on a university campus)). The analyses have differed
depending on the speaker (Bates v. State Bar, 433 U.S. 350, 384
(1977), and Ohralik v. Ohio State Bar Association, 436 U.S.
447, 456 (1978) (lesser protection accorded to attorney
solicitations)) and the social worth of the activity promoted
(Compare Posadas de Puerto Rico Assocs. v. Tourism Co., 478
U.S. 328, 342, 348 (1986) (upholding restnctions on
advertisements for legal gambling facilities), with Village of
Schaumburg v. Citizens for a Better Environment, 444 U.S.
620, 632 (1980) (restrictions on solicitations for chanty struck
down)). The divergent lines of commercial speech
jurisprudence have produced a well of confusion, the most
extreme example of which is the California Supreme Court
decision below.

Looking to the future, corporate speech takes many
different forms and addresses issues far beyond offering to sell
widgets at low, low prices. And even when the speech is fairly
straightforward in its attempt to bolster a bottom line, it is so
frequently intermingled with otherwise protected speech that
courts simply cannot determine where the speech falls in the
tangled web of cases compnsing the “commercial speech
doctrine.” Only this Court can cut through the clutter. This
case presents a perfect opportunity to do so.

For these reasons, the Petition for a Wnt of Certioran to
the California Supreme Court should be granted.

2

ARGUMENT
I

NIKE’S PETITION SHOULD BE GRANTED
SO THIS COURT CAN ADDRESS A MATTER
OF CRITICAL PUBLIC CONCERN:

THE LEVEL OF SCRUTINY APPLIED TO
SPEECH UTTERED BY BUSINESS INTERESTS

The variety and pervasiveness of commercial and mixed
commercial/noncommercial speech present in the market today
cannot be analyzed adequately under the modern commercial
speech doctrine. The decision below relies on this Court’s
cases, but in so doing, unmoors the precedents from the
underlying source—the First Amendment. To prevent
consumers from hearing misleading corporate speech, the
California Supreme Court sought to prevent consumers from
hearing misleading speech by holding that a// corporate speech
deserves only minimal constitutional protection. In Centra/
Hudson Gas & Electric Corp. v. Public Service Commission,
447 U.S. at 566, this Court formulated a four-part test against
which restrictions on commercial speech would be weighed:

For commercial speech to come within [the First
Amendment], [1] it at least must concern lawful
activity and not be misleading. Next, we ask [2]
whether the asserted governmental interest is
substantial. If both inquiries yield positive answers,
we must determine [3] whether the regulation
directly advances the governmental interest asserted,
and [4] whether it is not more extensive than is
necessary to serve that interest.

This Court later expanded Central Hudson’s inherent
flexibility. See, e.g., Board of Trustees of the State Univ. v.
Fox, 492 U.S. at 480 (requiring a “reasonable fit” rather than
the least restnctive means to comply with the fourth prong).
Unfortunately, this flexibility has “left both sides of the debate
with their own well of precedent from which to draw,” Abrams,

3

Floyd, A Growing Marketplace of Ideas, Legal Times, July 26,
1993, at S28. See also Shiffrin, Steven, The First Amendment
and Economic Regulation: Away From a General Theory of
the First Amendment, 78 Nw. VU. L. Rev. 1212, 1222 (1983)
(“commercial speech” was “an empty vessel into which content
is poured”).

Even this Court has been unable to apply the Central
Hudson analysis in any predictable way. See, eg., 44
Liquormart, Inc. v. Rhode Island, 517 U.S. 484, 527 (1996)
(Thomas, J., concurring) (courts have had difficulty in applying
the Central Hudson balancing test “with any uniformity’’); (City
of Cincinnati v. Discovery Network, Inc., 507 U.S. 410, 419
(1993) (“This very case illustrates the difficulty of drawing
bright-lines that will clearly cabin commercial speech in
a distinct category. ... The absence of a categorical definition
.. . [is] also a characteristic of our opinions considering the
constitutionality of regulations of commercial speech.”). Many
lower courts have expressly noted their struggle to apply
Central Hudson. See e.g., Nordyke v. Santa Clara County, 110
F.3d 707, 712 (9th Cir. 1997) (striking down a fairground lease
term prohibiting gun shows, appellate court described this
Court’s commercial speech cases, concluding that “Central
Hudson is not easy to apply”); Commodity Trend Serv., Inc. v.
Commodity Futures Trading Comm'n, 149 F.3d 679, 684 (7th
Cir. 1998) (recognizing “the difficulty of drawing bnght-lines”
(quoting Discovery Network, 507 U.S. at 419)); Oxveal-Lab.,
Inc. v. Jeffers, 909 F. Supp. 719, 724 (S.D. Cal. 1995)
(recognizing “that, often, these definitions will not be helpful
and that a broader and more nuanced inquiry will be required’”’).
Moreover, this Court has noted the entreaties of “certain judges,
scholars, and amici curiae” to repudiate Central Hudson and
“implement[] a more straightforward and stringent test for
assessing the validity of governmental restnctions on
commercial speech.” Greater New Orleans Broad. Ass'n v.
United States, 527 U.S. 173, 184(1999): Lorillard Tobacco Co
v. Reilly, 533 U.S. 525, 554 (2001).

4

The commercial speech doctrine has become nearly
impossible to apply because “commercial speech” is often
extremely difficult, if not impossible, to identify. See Kozinski,
Alex, & Banner, Stuart, Who's Afraid of Commercial Speech,
76 Va. L. Rev. 627, 631 (1990) (Kozinski & Banner). This
Court has long recognized that speech can serve dual functions.

[Mjuch linguistic expression serves a dual
communicative function: it conveys not only ideas
capable of relatively precise, detached explication,
but otherwise inexpressible emotions as well. In
fact, words are often chosen as much for their
emotive as their cognitive force. We cannot sanction
the view that the Constitution, while solicitous of the
cognitive content of individual speech, has little or
no regard for that emotive function which,
practically speaking, may often be the more
important element of the overall message sought to
be communicated.

Cohen v. California, 403 U.S. 15, 26 (1971). The duality of
commercial and noncommercial speech becomes critically
important when overlaid with the Court’s treatment of false or
misleading speech. Traditionally, in the realm of
noncommercial speech, the government is restrained from
acting as the arbiter of truth and falsity and the state may not
punish its citizens for disseminating false noncommercial
information. New York Times v. Sullivan, 376 U.S. 254, 271-72
(1964) (“Authoritative interpretations of the First Amendment
guarantees have consistently refused to recognize an exception
for any test of truth. ... [E]}rroneous statement is inevitable in
free debate, and . . . it must be protected if the freedoms of
expression are to have the ‘breathing space’ that they ‘need . .
. to survive.’ ”); see also First National Bank v. Bellotti,
435 U.S. 765, 777, 783 (1978) (corporations enjoy the same
degree of constitutional protection as individuals for direct
comments on public issues; thus, corporate sponsored editorials
which address the merits of a pending legislation should not be
subject to government regulation of falsity).

5

The court below, in a groundbreaking decision, held that
“when a court must decide whether particular speech may be
subjected to laws aimed at preventing false advertising or other

forms of commercial deception, categorizing a particular

statement as commercial or noncommercial speech requires
consideration of three elements: the speaker, the intended
audience, and the content of the message.” Petitioners’
Appendix (Pet. App.) 17a-18a. The court tries to downplay the
nature of its holding, claiming that it merely means “that when
a business enterprise, to promote and defend its sales and
profits, makes factual representations about its own products or
its own operations, it must speak truthfully.” Pet. App. 2a.
There is, of course, nothing to prevent other courts from
considering this reasoning persuasive enough to depart from the
consumer fraud context to which the court tries to limit it.

Dissenting, Justice Janice Brown took issue with the
current commercial speech doctrine that is dependent on speech
being categorized as either commercial or noncommercial, with
little quarter given to speech that contains elements of both.
Pet. App. 40a (Brown, J., dissenting). | Contemporary
marketing, she argues, involves speech far more intermingled
than segregated: “With the growth of commercialism, the
politicization of commercial interests, and the increasing
sophistication of commercial advertising over the past century,
the gap between commercial and noncommercial speech is
rapidly shrinking.” Pet. App. 41a. She further laments, “I
believe the commercial speech doctrine, in its current form,
fails to account for the realities of the modern world—a world
in which personal, political, and commercial arenas no longer
have sharply defined boundaries.” Pet. App. 42a.

The commercial speech doctrine as currently applied by
this Court and lower courts can lead to highly unpredictable
results, such as the decision below. Pulling a little of this and
a little of that from a variety of this Court’s opinions, a majority
of the California Supreme Court developed a new doctrine
unlike any this Court—or any other court—ever articulated.
Pet. App. 17a (describing the new “limited purpose” definition

6

of commercial speech). When the state of the law reaches this
point, affected parties have no means by which to adapt their
actions or their speech to prevent themselves from running
afoul of the law. This uncertainty chills protected speech as
those fearing liability shy away from expression that might be
construed as “commercial.”

The confusion engendered by the opinion below weighs
heavily in favor of this Court’s review. Stability, certainty, and
predictability are valued because they promote confidence in
the rule of law and make the resolution of disputes a less costly
enterprise. Grodin, Joseph R., Are Rules Really Better Than
Standards, 45 Hastings L.J. 569, 570 (1994). Certainty
achieves fairness to those who rely upon the law, efficiency in
following precedent, and continuity and equality in treating
similar cases equally. McGregor Co. v. Heritage, 631 P.2d
1355, 1366 (Or. 1981) (Peterson, J., concurring). Certainty
promotes business innovation and development by letting firms
know what they can and cannot do. Further, by eliminating
speculation as to what the law is and avoiding a need for
interpretation, clarification, or explanation, certainty promotes
efficiency for businesses and individuals. Loving, Paul E., The
Justice of Certainty, 73 Or. L. Rev. 743, 764 (1994).

The decision of the California Supreme Court cannot be
reconciled with the First Amendment. It can only serve as
authority for other courts to ratchet downward the protection
due not only to commercial speech, but to any speech that has
even the slightest element of commercial gain for the speaker.
Petitioners are correct that the decision below is so outlandish
that no other court in the country can match it for sheer
creativity. See Petition for Wnt of Certiorari (Pet. Cert.) at 24.
But the California Supreme Court is not a backwater tribunal
lacking in influence. Not only does the decision impact any
business whose speech comes within its borders (which is to
say, any national company at the very least), but the decision
provides fodder for lawsuits in other states. California

7

jurisprudence has a deserved reputation for being ahead of the
curve.’ This Court should not let the matter percolate further.

THE CURRENT COMMERCIAL
SPEECH DOCTRINE ANALYSIS IS
INADEQUATE APPLIED TO MARKETERS’
INNOVATIVE PRESENTATIONS
OF CORPORATE SPEECH

A profit motive, in and of itself, does not render speech
unprotected. Virginia Pharmacy, 425 U.S. at 761-62. Instead,
this Court held in Virginia Pharmacy that the speech is reduced
to less-favored status only when it does “no more than propose
a commercial transaction.” /d. at 771 n.24. The Court has thus
far relied on “common sense” to differentiate between
commercial and noncommercial speech. /d The two
“common sense” distinctions are (1) that commercial speech is
more verifiable than other types of speech and (2) that
commercial speech is more durable than other types of speech.
Id., see also Central Hudson, 447 U.S. at 564, n.6. Both
distinctions have been criticized by judges and scholars. See,

* For example, in Foster-Gardner, Inc. v. National Union Fire Ins. Co.,
959 P.2d 265 (Cal. 1998), the California Supreme Court adopted the
minority view that insurers do not have a duty to defend administrative
agency proceedings. This ruling was then followed by the Ninth Circuit
Court of Appeals (Granite Mgmt. Corp. v. Aetna Cas. & Sur. Co., 37
Fed. Appx. 262, 2002 U.S. App. LEXIS 10836 (9th Cir. June -}, 2002)),
and the State of Illinois (W.C. Richards Co. v. Hartford Accident &
Indem. Co., 724 N.E.2d 63 (Ill. 1999)). See also, Rees, Victona L.,
AlDSphobia: Forcing Courts to Face New Areas of Compensation for
Fear of a Deadly Disease, 39 Vill. L. Rev. 241, 249 n.41 (1994), noting
that the trend towards recovery for emotional distress without
accompanying physical injury began with the California Supreme
Court’s decision in Dillon v. Legg, 441 P.2d 912 (Cal. 1968). A
subsequent case, Molien v. Kaiser Foundation Hospitals, 616 P.2d 813
(Cal. 1980), established the California Supreme Court as a trendsetter in
this area of recovery.

e.g., Kozinski & Banner, supra, at 635-38; Lively, Donald E.,
The Supreme Court and Commercial Speech: New Words with
an Old Message, 72 Minn. L. Rev. 289, 296-97 (1987); Post,
Robert, The Constitutional Status of Commercial Speech, 48
UCLA L. Rev. 1, 31-32 (2000). Given that these distinctions
no longer appear a solid foundation for diminished
constitutional protection, and given the innovative new methods
of advertising and marketing in contemporary society, reliance
on a “common sense” approach can lead only to confusion.

In R.A.V. v. City of St. Paul, 505 U.S. 377, 385 (1992),
this Court held that even speech that normally receives less
First Amendment protection may not be regulated such that the
state discnminates on the basis of content or viewpoint.
Several lower courts have either applied or considered applying
R.A.V. to content-based commercial speech restnctions. See,
e.g., Vallev Broadcasting Co. v. United States, 107 F.3d 1328,
1331 (9th Cir. 1997) (citing MD I] Entertainment, Inc. v. City
of Dallas, 28 F.3d 492, 495 (Sth Cir. 1994) (acknowledging
potential application of R.A.V. to content-based commercial
speech regulation)); Hornell Brewing Co. v. Brady, 819 F.
Supp. 1227, 1232-33 (E.D.N.Y. 1993) (applying both 2.4.
and Central Hudson to speech regulation without deciding
which is required); and Citizens United for Free Speech Il v
Long Beach Township Board of Commissioners, 802 F. Supp.
1223, 1232(D.N.J. 1992)(“Itis clear from the Supreme Court's
decision in R.A. Vv. /), that commercial speech must be protected
by the usual strictures against content-based restnctions.”’).

Nonetheless, in Bolger v. Youngs Drug Product Corp.,
463 U.S. 60, 68 (1983) (quoting Central Hudson, 447 U.S. at
$63 n.5), this Court held that “advertising which ‘links a
product to a current public debate’ 1s not thereby entitled to the
constitutional protection afforded noncommercial speech”
because “[ajdvertisers should not be permitted to immunize
false or misleading product information from government
regulation simply by including references to public issues.”

The Court reiterated this holding in Zauderer v. Office of

Disciplinary Counsel of Supreme Court of Ohio, 471 U.S. 626

ee

9

(1985), in which a state supreme court sanctioned a lawyer for
running deceptive newspaper advertisements for his services in
bringing personal injury actions related to use of Dalkon Shield
contraceptives. Because some of the advertisements contained
statements regarding the legal nights of persons injured by the
Dalkon Shield, this Court recognized that such statements “in
another context, would be fully protected speech.” /d. at 637
n.7. Nonetheless, this Court concluded that the advertisements
were still commercial speech subject to lesser protection under
Central Hudson. “{A}dvertising which ‘links a product to a
current public debate’ is not thereby entitled to the
constitutional protection afforded noncommercial speech.” /d.
(quoting Central Hudson, 447 U.S. at 563 n.5). Based on these
cases, the Third Circuit Court of Appeals found that
advertisements by nval health care insurance companies that
included information about health care insurance and
delivery—matters indisputably at the center of public
debate—do not escape the commercial speech category. U.S.
Healthcare, Inc. v. Blue Cross of Greater Philadelphia, 898
F.2d 914, 937 (3d Cir.), cert. denied, 498 U.S. 816 (1990). In
each of these cases, the court suppressed noncommercial speech
related to important public debates for the sole reason that it
was coupled with commercial speech. The patronizing
assumption that people cannot discount speech made by
someone with an interest in a particular outcome has now led to
a California decision in which the corporate side of a public
debate is stifled in its entirety. Pet. App. 3la (Chin, J.,
dissenting) (arguing that Nike's speech is depnved of First
Amendment protection only because the company “competes
not only in the marketplace of ideas, but also in the marketplace
of manufactured goods”’).

A. Marketing and Advernising Are No
Longer Necessarily Identifiable or
Separable from Noncommercial Speech

As a corollary to the government's ability to regulate
commercial transactions, the government also assumes the
ability to regulate commercial speech. See Smolla, Rodney A.,

10

Information, Imagery, and the First Amendment: A Case for
Expansive Protection of Commercial Speech, 71 Tex. L. Rev.
777, 780 (1993). The Court has already conceded that
“commercial speech” is not easily defined. See, e.g., Rubin v.
Coors Brewing Co., 514 U.S. 476, 493 (1995) (Stevens, J.,
concurring) (“[ T]he borders of the commercial speech category
are not nearly as clear as the Court has assumed.”’); Edenfield v.
Fane, 507 U.S. 761, 765 (1993) (“[A]}mbiguities may exist at
the margins of the category of commercial speech.”); and
Bolger, 463 U.S. at 81 (Stevens, J., concurring) (“[T]he
impression that ‘commercial speech’ is a fairly definite category
of communication . . . may not be wholly warranted.”) These
“ambiguities” however, threaten to overcome the rest of the
category.

The speech in this case involved press releases, letters to
the editor, letters to university athletic directors, and the like
descnbing Nike’s overseas labor practices. Pet. App. 21a. Far
from the prototypical commercial speech of offering to sell X
product for Y price, the speech at issue in this case was
intended to rehabilitate a corporate image as well as provide
information to the public on a matter of broad concern.
Extending the lesser protection of the commercial speech
doctrine to this type of speech threatens a wide variety of public
relations communications. These include:

“Product placement,” an arrangement whereby a movie
studio incorporates certain commercial products into its film in
exchange for cash or free use of the product. Snyder, Steven L.,
Note: Movies and Product Placement: Is Hollywood Turning
Films into Commercial Speech? 1992 U. Ill. L. Rev. 301
(1992). For example, in 1990, Disney reportedly charged
advertisers $20,000 to show the product without comment,
$40,000 to show the product and have an actor mention the
product’s name, and $60,000 for an actor to be shown using the
product. /d. at 305 (citing Ad Follies, Advertising Age,
Dec. 24, 1990, at 24).

1]

Product placement began in feature films and television,
but other media have followed suit. For example, author Beth
Ann Herman featured a Maserati in her novel Power City. The
protagonist drives a Maserati whose ““V-6 engine had two
turbochargers, 185 horsepower and got up to 60 in under 7
seconds.” Jd. at 308 (citing Rothenberg, Randall, Now, Novels
Are Turning Promotional, N.Y. Times, Jan. 13, 1989, at D5).
In exchange, a Beverly Hills Maserati dealership threw a
$15,000 party for Herman that attracted nationwide television
coverage. /d. Even record albums are not exempt. Barbara
Mandrell’s album, No Nonsense, was made with the financial
support of the No Nonsense panty hese manufacturer. /d. at
308 n.67 (citing Epstein, Robert, Publi -/nterest Group Tilts at
Commercial Windmills, L.A. Times, June 6, 1991, at F7).

Testimonials became part of main-stream marketing in
the 1920s, when Pond’s cold cream paid “Great Ladies”
(including Mrs. Reginald Vanderbilt and Queen Mane of
Rumania) to sing the praises of the moisturizer in exchange for
contributions to charity. Madow, Michael, Private Ownership
of Public Image: Popular Culture and Publicity Rights, 81 Cal.
L. Rev. 125, 164-65 (1993). Lately, however, it may not be
apparent that those giving testimony are paid to tout the
product. For example, actress Kathleen Turner appeared on
CNN in August, 2002, to discuss her struggles with rheumatoid
arthritis. She failed to mention that the makers of Enbrel, a
drug that battles the condition, paid her to appear. Stafford,
Leon/Cox News Service, Use of ‘stealth’ marketing raises
questions of ethics (Aug. 29, 2002) (http://www.coxnews.
com/newsservice-/stories/2002/0829-STEALTH-ADS-COX.
html) (visited Sept. 24, 2002). Similarly, Lauren Bacall
appeared on “NBC Today,” telling the story of a friend who had
gone blind due to macular degeneration and then discussed a
new drug that could prevent blindness from that cause.
Novartis, the maker of the drug, paid for Ms. Bacall’s
appearance on the show, a fact revealed to the audience by
neither Ms. Bacall nor NBC. Peterson, Melody, Heartfelt

12
Advice, Hefty Fees: Side Effects of Celebrity Drug Pitches
Debated, New York Times, Aug. 11, 2002, § 3, at 1.

Music videos also blur the line between commercial and
noncommercial speech. See Kozinski & Banner, supra, at 641.
Music itself, of course, is entitled to full First Amendment
protection. Ward v. Rock Against Racism, 491 U.S. 781, 790
(1989). A primary function of a music video is to promote the
artist and the song, in hopes of persuading consumers to buy the
album on which the song appears. Yet whether the video is
treated as lesser-protected commercial speech is not obvious
under the Court’s current jumsprudence. The only court thus far
to consider this issue held in Montgomery v. Montgomery, 60
S.W.3d 524, 529 (Ky. 2001), that:

While music videos are not produced pnmarily for
the sale of the video but, rather, the underlying song,
this does not stnp them of their First Amendment
protection. Music videos are in essence mini-movies
that often require the same level of artistic and
creative input from the performers, actors, and
directors as is required in the making of motion
pictures. Moreover, music videos are aired on
television not as advertisements but as the main
attraction, the airing of which, consequently, is
supported by commercial advertisements. Simply
put, the commercial nature of music videos does not
deprive them of constitutional protection.

(Footnote omitted.) This holding provoked a dissent that seems
equally plausible:

A music video stands to an album the same way that
a movie “trailer” or “teaser” stands in relation to a
movie; it represents an attempt to entice a customer
to purchase the right to hear or see the larger work.
Indeed, music videos are “doubly” commercial
speech. MTV, VH1, the Nashville Network, and
other music-video cable channels select and show
the videos that they believe will generate the highest

13

advertising revenue. The video channels’
unwillingness to broadcast controversial matenals—
materials likely to spook boycott-wary advertisers—
provide additional evidence of the essentially
commercial nature of the undertaking.

Id. at 533 (Keller, J., dissenting). The disagreement between
the majority and dissent in Montgomery is significant only
because the categorization of the video impacts the level of
protection to which it is entitled under the First Amendment.

“Virtual advertising” is a form of digital technology that
allows advertisers to insert computer-generated brand names,
logos, or animated images into previously recorded television
programs or movies. Deutsch, Askan, Sports Broadcasting and
Virtual Advertising: Defining the Limits of Copyright Law and
the Law of Unfair Competition, 11 Marq. Sports L. Rev. 41, 42
(2000). It uses computers to place still or video images into
live video broadcasts in real time so that they look as if they are
part of the original scene. For example, several Major League
Baseball teams have made use of virtual advertisements
along the wall behind home plate. /d. (citing Elliott, Stuart,
Real or Virtual? You Call It, New York Times, Oct. 1, 1999,
at Cl). Virtual advertising blurs the line between television
programming aid commercials. /d. at 44.

“Stealth” or “guerilla” marketing is anew way of using
undercover actors to promote a product without the public
being aware that the actors are paid by the product’s
manufacturer. For example, the United States arm of Sony
Ericsson Mobile Communications Ltd. hired men and women
to pose as tourists at tourist attractions in New York City, then
ask passers by to take their picture with Sony’s new
phone/digital camera. Sony also hired attractive women to sit
at opposite ends of a bar in a nightclub and play a computer
game on their phones while engaging other patrons in
conversation about their cool new toy. Under no circumstances
are the actors supposed to tell the passers by or club patrons that
they are employed by Sony. Vranica, Suzanne, Advertising

14

That Guy Showing off His Hot New Phone May Be a Shill, Wall
St. J., July 31, 2002, at B1. Moreover, the actors do not make
any type of sales pitch, they simply demonstrate the product and
make flattering comments about it. /d. Similarly, the public
relations firm representing a new flavored-water brand
dispatched young women fitting the target demographic to
trendy Manhattan bars and clubs to be seen drinking the
specific brand and making favorable comments about it to
unsuspecting bar patrons. Harrelson, Michael, The Fat Man
Sings: Meet the 300-Pound Guerrilla of Undercover Marketing,
Nightclub & Bar Magazine (Feb. 2002) (http://www.
nightclub.com/magazine-/February02/cover.html) (visited
Sept. 24, 2002) (profiling Jonathan Ressler, CEO of Big Fat,
Inc., a public relations firm that is at the vanguard of
undercover marketing techniques). See also Goldberg,
Michelle, Confessions of an Undercover Drink Fink,
Salon (Dec. 9, 1997) (http://www.salon.com/media-/1997/
12/09media.html) (visited Sept. 28, 2002) (first-hand account
of methods used to sell cognac martinis without expressly
offering to conduct a commercial transaction).

This type of marketing is not restricted to high-tech
gadgets and liquor. Record companies may plant attractive
young women in record shops, paid to notice the album in a
customer’s hand and helpfully suggest other artists the customer
may like. Nord, Thomas, Stealth marketing—is it the next big
thing or just a big fat flop?, The Courier-Journal (Louisville,
KY) (August 3, 2001) (http://www.courier-journal.com/
features/columns/popculture/fe20010803pop.html) (visited
Sept. 24, 2002). Scooter companies pay college students to
hang outside coffee shops, striking up conversations with
customers and casually mentioning their new nies.
Khermouch, Gerry & Green, Jeff, Buzz Marketing, Business
Week, July 30, 2001, at 54. Children are given copies of hot
new portable video games, urging them to bring it to class and
show all their frends. /d. at 55.

Providing helpful advice (while selling a little something
on the side) is also a time-honored method of marketing that is

a

15

evolving into a particularly powerful tool on the Internet. Using
this method, an entrepreneur seeks out chat groups on the
Internet that discuss issues related to what he has to sell. For
example, someone who wants to sell bookkeeping software will
find (e.g., through Yahoogroups) groups of people who talk
about finances. He will “lurk” long enough to get a feel for the
group’s discussions, and then start contributing. He will spend
the bulk of his time joining in the discussion and some
percentage correctly answering questions related to his product.
Each of his posts will link to his own webpage where he offers
software for sale. After becoming a trusted member of the
group, he will find occasional opportunities to suggest a
“meeting” via private E-mail to discuss how the software can
meet a particular person’s special needs. Tuincher, Rex,
Stealth Marketing in Usenet News Groups
(http://216.239.53.100/search?q=cache:pra0aYbfAtwC:
www .dnaco.net/~tinc/stealth.htm+stealth+marketing~usenet
&hl=en&ie=UTF-8) (visited Oct. 24, 2002).

Another common incarnation of this technique 1s found on
websites geared toward parents, mothers in particular. Baby
food manufacturers have websites chock full of helpful
information as to when baby should achieve developmental
milestones, adv:ce on how to encourage baby to eat new foods,
health advice for the expectant and breastfeeding mother, and
so on. Some even have a doctor on staff to answer E-mail
inquiries. Of course, the websites also provide information for
purchasing products, but one may peruse the sites at length
without ever making a purchase. See, e.g., Website for Gerber
products, http://www.gerber.com/main.asp (visited Oct. 29,
2002) (home page points readers to information about
nutritional development, new products, and “expert advice,
anytime, day or night”); and Website for Evenflo products,
http://www.evenflo.com/yb/index.phtml (visited Oct. 29, 2002)
(pregnancy tips, introducing solids, better bottlefeeding and
factors to consider when purchasing a breast pump).

16

Websites as commercial speech have not yet generated
much case law,’ but, especially as regards lawyer advertising,
they have generated some law review articles concerned about
whether law firms’ websites are subject to state rules regarding
solicitation. See, e.g., Kershen, Drew L., Professional Legal
Organizations on the Internet: Websites and Ethics, 4 Drake J.
Agnic. L. 141, 145 (1999). (Even if a website is primarily
informational, if the content suggests a solicitation for a
commercial relationship, the website is commercial speech
subject to state regulation.”).

B. Speech Intended to Bolster a
Corporate Image Should Be Fully
Protected Under the First Amendment

Corporate image advertising “describes the corporation
itself, its activities or its views, but does not explicitly describe
any products or services sold by the corporation.” Subcomm.
on Administrative Practice and Procedure of the Senate Comm.
on the Judiciary, Sourcebook on Corporate Image and
Corporate Advocacy Advertising, 95th Cong., 2d Sess. 1149,
1156 (1978), quoted in Lin, C.C. Laura, Note: Corporate
Image Advertising and the First Amendment, 61 S. Cal. L. Rev.
459, 461 (1988). There are, generally, two types of image
advertising. The first is advertising that treats the company
itself as a product to be sold. For example, lumber giant

* See e.g., Ford Motor Co. v. Texas Dept. of Transp., 264 F.3d 493, 505
(Sth Cir. 2001) (court rejected Ford’s challenge to a Texas law
prohibiting the sale of used vehicles via a website as violating its First
Amendment nght to speech); Planned Parenthood Fed'n of America,
Inc. v. Bucci, 1997 U.S. Dist. LEXIS 3338, *6-*12 (S.D.N.Y. Mar. 24,
1997), aff'd, 1998 U.S. App. LEXIS 22179 (2d Cir. Feb. 9, 1998), cert.
denied, 525 U.S. 834 (1998) (defendant, doing business as Catholic
Radio, registered a website at “plannedparenthood.com.” dedicated to
the pro-life position; court held that this use of plaintiff's mark was
commercial speech because it impacted the plaintiff's ability to offer its
own services over the Internet and because the very use of the Internet
is “in commerce” because it requires long-distance, interstate phone lines
to connect).

te sea

17

Weverhaueser has been reviled by environmentalists for clear-
cutting certain forest areas. See, e.g., Binole, Gina, After
Buying MacBlo, Weverhaeuser Won't Commit on
Clear-Cutting, Portland Bus. J. (June 28, 1999) (http:/ forests.
org archive canada-/weywonts.htm) (visited Oct. 24, 2002).
Promoting its image as a responsible steward of the earth,
Weyerhauser publicized its partnership with CARE, a well-
known international relief and development organization.
Together, they will teach “sustainable forestry practices and
environmental stewardship to improve living conditions of
people in developing countnes for current and future
generations.” See http: www.weyerhaeuser.com citizenship-
philanthropy partnershipwithcare.asp (visited Oct. 24, 2002).

This type of image advertising also includes companies
that project an ethos of social responsibility and a political
philosophy that consumers presumably can share and support
through the purchase of the companies’ products. For example,
The Body Shop sells cosmetics and one might reasonably
presume that its communications with the public are intended
to sell soap and moisturizers. The company’s owner contends
that the central mission of business is to improve the world by
not only caring for its work force and customers, but also for its
communities aud the environment. She believes that business
should be a force for social good first, and consider bottom line
profits second. Hartman, Cathy L. & Beck-Dudley, Caryn L.,
Marketing Strategies and the Search for Virtue: A Case
Analysis of The Body Shop, International, 20 J. of Bus. Ethics
249-63 (1999). Thus, The Body Shop’s mission statement

specifies that social, environmental, and political
values are the fundamental bases of exchange with
its constituents. Specifically, the company’s first
commitment is to “social and environmental
change,” and, second, to the “financial and human
needs” of its stakeholders. Further, its product
pledge involves “the protection of the environment,
human and civil mghts” within the cosmetics
industry.

18

ld. Whether it is Weyerhaeuser’s forest management or the
Body Shop’s focus on “natural” skin care reflecting broader
environmental concerns, these businesses are speaking on
relevant issues that do not come close to asking consumers to
buy their products.

The second type of image advertising takes positions on
public issues. As such, it is even further removed from actual
commercial transactions than advertising to promote the
company itself as a product. For example, when inexpensive
Japanese compact cars began to flood the market, American
automakers responded by urging consumers to “buy American.”
When the president of an American automobile company takes
out an advertisement in a newspaper or buys air time on a
network to urge people to “buy American,” he may argue that
by purchasing foreign automobiles Americans are putting other
Americans out of work and that buying his company’s cars is a
patriotic act. The speech is profit motivated; it even proposes
a commercial transaction and directly concerns the economic
interests of the speaker. However, it also touches on matters of
pressing political concern—consumer choice, protectionism,
and free trade. Emord, Jonathan W., Contrived Distinctions:
The Doctrine of Commercial Speech in First Amendment
Jurisprudence, Cato Policy Analysis No. 161 (1991).
“Information about the quality and pnce of some products may
relate to important political issues. For example, a belief that
American cars are over priced influences views on foreign car
import restrictions, on inflationary price increases for domestic
cars, and on the effects of oligopoly ... .” /d. (quoting Farber,
Daniel, Commercial Speech and First Amendment Theory, 74
Nw. U. L. Rev. 372, 382 (1979)).

In Quinn v. Aetna Life & Casualty Co., 96 Misc. 2d 545,
409 N.Y.S.2d 473 (1978), a state court tral judge ruled that an
insurance company’s advertisements blaming high insurance
premiums on large tort damage awards were commercial speech
and, thus, could be enjoined if found to be false or misleading.
Plaintiffs involved in on-going personal injury actions sought
to enjoin Aetna from continuing publication of statements in

ee le te ene. ees + oe

— oo ae

19

certain magazines that criticized the tort system and what Aetna
perceived to be excessive damages awarded in many personal
injury cases on the grounds that the advertisements contained
misleading statements violating New York law. /d. at 549, 409
N.Y.S.2d at 475. Aetna responded that its publications
advocating tort law reform were political expression and fully
protected by the First Amendment. /d. The state judge ruled
that the statements were commercial speech that could be
enjoined if false or misleading. See id. at 553-54, 409 N.Y.S.2d
at 478. The court made its ruling despite Aetna’s purpose to
influence potential jurors to give lower damage awards, rather
than targeting its statement at consumers who might purchase
insurance products. /d. at 554,409 N.Y.S.2d at 478. When the
case was removed to federal district court, Quinn v. Aetna Life
& Casualty Co., 482 F. Supp. 22, 29 (E.D.N.Y. 1979), aff'd,
616 F.2d 38 (2d Cir. 1980) (per curiam), the district court judge
concluded that the advertisements were not commercial speech,
id., and the Second Circuit affirmed. Quinn, 616 F.2d at 40.
The federal district judge concluded that the state court judge
had “engaged in a fundamental misconception by calling the
advertisements here in question ‘commercial speech.’” Quinn,
482 F. Supp. at 29; see also Rutledge v. Liability Ins. Indus.,
487 F. Supp. 5, 8-9 (W.D. La. 1979).

The pharmaceutical industry has also sponsored political
advertisements—“issue ads”—that praise certain candidates’
stands on prescription drug legislation. The advertisements are
prepared and placed by a nonpartisan group called United
Seniors Association, but that group is funded largely by
unrestricted educational grants from the Pharmaceutical
Research and Manufacturers of America (PhRMA). Edsall,
Thomas B., Drug Industry Financing Fuels Pro-GOP TV
Spots, Washington Post, Oct. 23, 2002, at All. The drug
companies that are members of PhRMA undoubtedly would
benefit economically if the positions they are advertising are
enacted into law. Under the California Supreme Court's
analysis, this core political speech could be transformed into
commercial speech entitled to lesser protection.

20

This Court’s current commercial speech jurisprudence
simply is not up to the task of analyzing corporations’
innovative ways of informing the public of their positions on
issues ranging from the companies themselves to raging public
debates. The California Supreme Court’s decision
demonstrates how far afield a court can go while relying on this
Court’s precedents.

+

CONCLUSION

“One of the most delicate tasks a court faces is the
application of the legislative mandate of a prior generation to
novel circumstances created by a culture grown more complex.”
Vidal Sassoon, Inc. v. Bristol-Myers Co., 661 F.2d 272, 273 (2d
Cir. 1981). The current doctrinal framework is ill suited to
handle the wide range of commercial and mixed
commercial noncommercial speech present in the market today.
The decision below represents a distillation of this Court’s
commercial jurisprudence reductio ad absurdem: in its efforts
to prevent consumers from “hearing misleading corporate
speech, the California Supreme Court has essentially outlawed
all corporate speech. The petition for a writ of certiorari to the
California Supreme Court should be granted.

DATED: November, 2002.
Respectfully submitted,

DEBORAH J. La FETRA
Counsel of Record
Pacific Legal Foundation
10360 Old Placerville Road,

Suite 100

Sacramento, Califorma 95827
Telephone: (916) 362-2833
Facsimile: (916) 362-2932

Counsel for Amici Curiae
Pacific Legal Foundation, et al

a ee ce ae ee

OO ee

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0611%3A05. Public record. Not legal advice.