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

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0611%3A25

## Record

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

## Text

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FEB 28 205

No. 02-575

Iu the Supreme Court of the V
OCTOBER TERM, 2002

NIKE, INC., et al.,

Petitioners,

Vv.
MARC KASKY,

Respondent.

On Writ Of Certiorari
To The Supreme Court Of California

BRIEF AMICUS CURIAE
OF THE CHAMBER OF COMMERCE
OF THE UNITED STATES OF AMERICA

IN SUPPORT OF PETITIONERS
ROBIN S. CONRAD KENNETH W. STARR
NATIONAL CHAMBER Counsel of Record
LITIGATION CENTER, INC. RICHARD A. CORDRAY
1615 H Street, N.W. KANNON K. SHANMUGAM
Washington, DC 20062 KIRKLAND & ELLIS
(202) 463-5337 655 Fifteenth Street, N.W.

Washington, DC 20005
(202) 879-5000

February 28, 2003
_———
WILSON-EPES PRINTING Co., INC. — (202) 789-0096 - WASHINGTON, D. C. 20001

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Base I. AFFIRMANCE OF THE RULING BELOW
oe WOULD RESULT IN THE IMMEDIATE AND
Sere NATIONWIDE SUPPRESSION OF SPEECH ON

= IMPORTANT PUBLIC POLICY ISSUES. .............:-0- 4

A. The Court’s Precedents Have Generated
Substantial Uncertainty And Confusion
Regarding The Definition Of “Commercial

ak baat Se eo | : 2 | : | B. The Test For Commercial Speech Devised By
Pe eee re SS 2 The California Supreme Court Is Extreme,

: Bae < Sf | C. The Test For Commercial Speech Applied Below

8 Dips Mer ages ( Would Suppress A Broad Range Of Accepted
Pea ere eee SG | And Beneficial Speech By Companies And
Ru ecatie : Re aN

THE COURT SHOULD HOLD THAT THE
“COMMERCIAL SPEECH” DOCTRINE ONLY
ADDRESSES ADVERTISING OF PRODUCTS OR
SERVICES OFFERED FOR SALE. ............:.:c:c00ee0000 12

A. The History Of The “Commercial Speech”

" Doctrine Demonstrates That It Addresses Only
Speech By Corporations More Generally. ..............12

B. Nike’s Discussion Of Its Business Operations

| And Labor Practices Should Not Be Treated As

C. If Nike’s Editorializing Is Found To Constitute
“Commercial Speech,” It Should Still Be Entitled

To The Highest Constitutional Protection

CONCLUSION

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TABLE OF AUTHORITIES
Page

Cases
44 Liquormart, Inc. v. Rhode Island,

Ee 14,17, 18
Bartnicki v. Vopper,

ae 8
Bates v. State Bar of Arizona,
I TD cctccctenssrsnennesevcssmseccsssceccscssveesseoooees 14
Board of County Comm'rs v. Umbehr,

EE 9
Board of Trustees v. Fox,

Eee 4
Bolger v. Youngs Drug Prods. Corp.,

ES 4,6,14
Central Hudson Gas & Elec. Corp. v. Pub.

Serv. Comm'n,

a 4,17
City of Cincinnati v. Discovery Network, Inc.,

Ee passim

Commodity Trend Serv., Inc. v. Commodity
Futures Trading Comm'n,
arr 5

Eastern R.R. Presidents Conference v. Noerr Motor
Freight, Ine.,

ee 10
First National Bank of Boston v. Bellotti,
cri crsarsacceneenennennsscemesecnccsusceces 8, 15, 16

Florida Bar v. Went For It, Inc.,
ccc crererrenemnsnncenenses 14

iV

Good News Club v. Milford Cent. Sch.,

a I neecicticatiensieciintaaianinlaiiecliiiieciictindaiadiite 16
Grayned v. City of Rockford,

I ait ilitiiaaacindalninelelsiticientiarie ta 20
Greater New Orleans Broad. Ass'n, Inc. v.

United States,

a Ss I ne nicatihinrrinatiaialtniaiisnineaiahis 18
Hustler Magazine, Inc. v. Falwell,

a ial eiaciaetceniieaeaitinaiaaiattieaaaaiiieataiial 9
Lorillard Tobacco Co. v. Reilly,

ee SE nicisnsiidsiieincnciapnsesictnnsntniuniitin 4,17, 18, 19
Metromedia, Inc. v. City of San Diego,

| _______—_—RE TTR T CT ae E 14
New York Times Co. v. Sullivan,

I itctniinttaninibinticssintenianipiiteenaniationes 9,17
NLRB vy. Gissel Packing Co.,

In aiid einierrielcaiititinealertintaaall 8
NLRB v. Virginia Elec. & Power Co.,

ee iciiseiiienhniciernitserianininersataiesintastaatiaaniatiaamiie 8
Pacific Gas & Elec. Co. v. Pub. Utils.

Comm'n of Cal,

I SP cnlinniicticirinctintanaiicnidaaiainieamnaiia 9, 14, 15, 16
Philadelphia Newspapers v. Hepps,

gk, RTE OER Es 8,9
Police Dep't of Chicago v. Mosley,

a SE eaciaiihacintincrsaiineibiimiiadaiihiaaiiniaiasiliabaas 16
R.A.V. v. City of St. Paul,

I 9, 16
Rosenberger v. Rector & Visitors of Univ. of Va.,

I eicititasiicastiersenetiatidodanieniiaineiatitiiassae 16
Rubin v. Coors Brewing Co.,

I isisiniatntaincnistiirhetintinnasiimastaasieitea nisin 19

Vv

Schenck v. Pro-Choice Network,

SID UB. 337 (ADIT) .nncceceesccescceccesncssscrccccsccccoscosenssessnesenes 9
Thomas v. Collins,

BZD UD. SEG (IDES) -nccccccccvsccccesccsccseccessscsseccssscsssesenssesoes 8
Thompson v. Western States Medical Center,

Ne EE 18, 19
Thornhill v. Alabama,

BIO UB. BB CIDOD) .....ccceceresccecccsecccsccccccccsscccssessenees 3,8,9
Turner Broad. Sys. v. FCC,

$12 U.S. G22 (1994) ..2..ccccececccceccsercccccsecccsesessosrssncsssnseses 16

Union of Needletrades Indus. & Textile Employees,
AFL-CIO v. The Gap, Inc.,

Cal. Sup. Ct. No. 300474...........ccccceeceeeeeeeneenenereneenennens 20
United States v. United Foods, Inc.,

le |. | _____ 4,5, 17,18
Valentine v. Chrestensen,

LS. 12, 13

Virginia Bd. of Pharmacy v. Virginia Citizens Consumer
Council, Inc.,

TELSTRA eS 4, 13
Zauderer v. Office of Disciplinary Counsel,

471 U.S. 626 (1985) ...........ccce-cscerereceeserecesseeseecsssneensssnes 6
Other Authorities

Jean Wegman Burns, Confused Jurisprudence: False
Advertising Under the Lanham Act,

79 B.U. L. Rev. 807 (1999)..........ccccccsesseessecsernensennerenees 5
Alexander Meiklejohn, Political Freedom: The

Constitutional Powers of The People (1948) .............-+. 16
Robert Post, The Constitutional Status of Commercial

Speech,

48 UCLA L. Rev. 1 (2000).................cccrcscrrerseerrcersenssees 5

vi

Laurence H. Tribe, American Constitutional Law (2d ed.
SEIT ciessieniaiciiitaniilnntaiatata a ial 14

Bill Ford’s Speech to Greenpeace, at www.ford.com/
en/ourCompany/environmentallnitiatives/environ-
mental Actions/billFordsSpeechToGreenpeace.htm
na nN a rtecieehicdicchininciai a ileal ete 11

Remarks by Raymond V. Gilmartin, Chief Executives Club
of Boston, at www.merck.com/newsroom/executive _
speeches/011900.html (Jan. 19, 2000). ........ccccceceeceees 11

Statement on GE Hudson River Efforts, at www.ge.com/
commitment/ehs/leadership/ehs_ hudson river.htm
EO ll

Statement on Global Climate Change, at www.chevron-
texaco.com/social_responsibility/environment/
global_climate.asp (last visited Feb. 27, 2003)............. 10

Terrorism Insurance Still On Front Burner For Insurers,
Lawmakers, Ins. J., at www.insurancejournal.com/
magazines/southcentral/ 2002/05/13/features/19079.
| EET ee anor ee ee ae 11

Update on Investigation, at www.unitedspace-
alliance.com/columbia/030207-1300.htm (last visited
SrTah SIGs TOTTI ishacrinisceieusiaiteieseeticenbinileadeldeadeaiai acai 11

ee ee ET re

INTEREST OF AMICUS CURIAE

The Chamber of Commerce of the United States of
America is the world’s largest federation of business
organizations and individuals. The Chamber represents an
underlying membership of more than three million
businesses of every size, in every sector, and from every
geographic region of the country. One of the Chamber's
primary missions is to represent the interests of its members
by filing amicus briefs in cases involving issues of national
concern to American business.'

The Chamber and its members have a strong interest in
this case because the California Supreme Court significantly
curtailed the freedom of speech by holding that most speech
by businesses is “commercial speech” subject to reduced
First Amendment protection. Just as petitioner Nike, Inc.,
discussed its overseas labor practices in the statements at
issue in this case, so too do other businesses frequently
discuss various aspects of their own operations in the course
of ongoing public policy debates. Indeed, those topics about
which individual businesses are best informed and have the
most to contribute to the public debate are often precisely the
subjects for discussion that would be curtailed by the ruling
below.

Under the California Supreme Court’s decision, all such
speech on topics of public concern could be subjected to the
reduced First Amendment protection accorded “commercial
speech,” and corporations could be held strictly liable for any
factual misstatements mistakenly made in the course of
public policy debates. The effect of the ruling below is thus

! Pursuant to Supreme Court Rule 37.6, the amicus states that no counsel
for any party authored this brief in whole or in part, and that no person or
entity, other than the amicus, its members, and its counsel, contributed
monetarily to the preparation or submission of this brief. The parties
have consented to the filing of this brief; pursuant to Supreme Court Rule
37.3, letters evidencing this consent have been filed with the Clerk.

2

to suppress corporations’ speech and discriminate against
them by holding that speech by corporations on important
public policy matters is subject to the reduced protection
accorded “commercial speech,” but speech by their
opponents is not. And this disparate and unfair treatment is
not limited to speech in California. Because corporations’
speech is increasingly disseminated on a nationwide and even
worldwide basis, the decision below would threaten not only
speech in California, but also speech elsewhere across the
globe. Therefore, the Chamber urges reversal of the Califor-
nia Supreme Court’s decision.

SUMMARY OF ARGUMENT

For many years, the Court has sent conflicting signals on
the definition of “commercial speech” and has allowed the
lower courts to take divergent approaches on this issue. In
this case, the California Supreme Court used that latitude to
create yet another test for determining whether speech is
“commercial,” one that is both breathtakingly broad and
deeply menacing to our system of free expression.
According to that court, “commercial speech” includes all
statements of fact: (i) by persons engaged in commerce
(including all businesses); (ii) to an audience including actual
or potential purchasers of their products (which, in the case
of a company like Nike, include almost all Americans); (iii)
on commercial matters (which include nearly all matters on

which corporations have any reason to speak). See Pet. 17a-
20a.

Whatever the correct test may be, this surely is not it.
From its inception, the “commercial speech” doctrine was
designed to broaden the First Amendment’s reach by
granting limited protection to product advertisements that
were previously held to be entirely unprotected. In sharp
contrast, the California Supreme Court has now employed
the “commercial speech” doctrine to restrict the First
Amendment’s protections by subjecting speech at the core of
the First Amendment — including speech on important pub-

3

lic policy matters such as globalization, environmentalism,
escalating health care costs, and so on — to the reduced level
of protection accorded “commercial” speech. This makes no
sense. As this Court explained long ago, speech about
business operations and labor conditions is “indispensable to
the effective and intelligent use of the processes of popular
government to shape the destiny of modern industrial
society.” Thornhill v. Alabama, 310 U.S. 88, 103 (1940).

The California court’s analysis points powerfully to the
need to clarify the definition of “commercial speech.” In
particular, the Court has often stated that this doctrine
properly addresses only the advertising of products and
services for sale, rather than all speech by corporations. The
Court should clearly reaffirm this approach. Otherwise,
speech that lies at the core of the First Amendment would be
relegated to its periphery. If general discussion about a
company’s business operations and labor conditions were
subjected to the same kind of restrictions that apply to speech
proposing a commercial transaction, the predictable result
would be to impede and impoverish public debate on
important policy issues.

This Court’s authoritative guidance on the definition of
“commercial speech” is much needed by the entire business
community. As matters stand, this longstanding uncertainty
regarding the definition and treatment of commercial speech,
exacerbated by the California Supreme Court’s decision,
threatens to chill speech on important public policy matters.
That should not be. Moreover, the increasingly nationwide
and even worldwide scope of corporate speech means that
corporations are effectively bound by the law that applies in
the least protective jurisdiction. As a result, this Court can
no longer afford to defer this issue yet again and should take
this opportunity to clarify that restrictions on commercial
speech are inapplicable to corporate speech on matters of
public concern.

4

ARGUMENT

I. AFFIRMANCE OF THE RULING BELOW
WOULD RESULT IN THE IMMEDIATE AND
NATIONWIDE SUPPRESSION OF SPEECH ON
IMPORTANT PUBLIC POLICY ISSUES.

A. The Court’s Precedents Have Generated
Substantial Uncertainty And Confusion Regarding
The Definition Of “Commercial Speech.”

In its prior commercial speech cases, the Court has set out
at least three different tests for determining whether speech is
in fact “commercial.” The Court has “usually defined”
commercial speech as “speech that does no more than
propose a commercial transaction.” United States v. United
Foods, Inc., 533 U.S. 405, 409 (2001); accord Board of
Trustees v. Fox, 492 U.S. 469, 473-74 (1989); Virginia Bd. of
Pharmacy v. Virginia Citizens Consumer Council, Inc., 425
U.S. 748, 762 (1976). At times, however, the Court has
applied a more expansive test, under which “expression
related solely to the economic interests of the speaker and its
audience” is treated as “commercial.” Central Hudson Gas
& Elec. Corp. v. Pub. Serv. Comm'n, 447 U.S. 557, 561
(1980). And the Court has articulated yet another test, which
considers three factors: whether the communication was an
advertisement, whether it referred to a specific product or
service, and whether the speaker had an economic motivation
for the speech. See Bolger v. Youngs Drug Prods. Corp., 463
U.S. 60, 66-67 (1983). Puzzlingly, under this last test,
speech is not necessarily commercial even if all three factors
are met, and speech can be commercial even if all three
factors are not met. Sec id. at 67 & n.14.

The Court itself has acknowledged the inconsistency and
indeterminacy of these and other precedents in this area. See,
e.g., Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 554-55
(2001); City of Cincinnati v. Discovery Network, Inc., 507
U.S. 410, 422-23 (1993). The Court, however, has thus far

5

chosen not to resolve this inconsistency or to give clearer
guidance on these points. See, e.g., United Foods, 533 U.S.
at 410; Discovery Network, 507 U.S. at 416.

As commentators have noted, this Court’s “attempts to
define ‘commercial’ speech” are “more ad hoc than the
source of any real guidance.” Jean Wegman Burns,
Confused Jurisprudence: False Advertising Under the
Lanham Act, 79 B.U. L. Rev. 807, 831-32 (1999); sec also
Robert Post, The Constitutional Status of Commercial
Speech, 48 UCLA L. Rev. 1, 5 (2000) (noting that the
“boundaries” of the commercial speech doctrine are “quite
blurred”). In light of this continuing uncertainty, lower
courts have either adopted one of the various tests set out by
this Court, or simply formulated one of their own.

In this case, the California Supreme Court took the latter
approach and held that “commercial speech” includes all
statements of fact: (i) by persons engaged in commerce; (11)
to an audience including actual or potential purchasers of
their products; (iii) on commercial matters. See Pet. 17a-
20a.2 Although the California Supreme Court represented
that this test was consistent with this Court’s “commercial

speech” jurisprudence, the test bears only the most

superficial relationship to the Central Hudson definition of
commercial speech as “expression related solely to the
economic interests of the speaker and its audience.” 447
U.S. at 561. It thus well illustrates the Seventh Circuit's
concern about “the incredible breadth of the Central Hudson
test if taken to its literal extremes.” Commodity Trend Serv.,
Inc. v. Commodity Futures Trading Comm'n, 149 F.3d 679,
684 (7th Cir. 1998). The test adopted below also seems to

2 Remarkably, the California Supreme Court suggested that its novel test
applies only for some purposes, and that some other unspecified test
might apply in other cases. See Pet. 17a. It thus not only added a new
“commercial speech” test to the jurisprudential mix, but signaled the
future proliferation of even more tests.

6

draw on the broad discussion in Bolger of situations in which
the speaker has an “economic motivation” for engaging in
speech that relates in some more general way to its products
and services. See 463 U.S. at 66-68. Indeed, the court below
justified its broad formulation of the test for commercial
speech by concluding that all discussion and debate about the
business operations of a particular corporation. constitute

“product references” for purposes of the Bolger test. See Pet.
13a-15a, 18a-19a.

The California Supreme Court clearly recognized that the
confusing and contradictory nature of this Court’s case law
provided it with the opportunity to venture out on its own and
craft an entirely new definition of “commercial speech.” It
expressly quoted this Court’s prior statements about “the
difficulty of drawing bright lines” in dealing with
commercial speech, Pet. 15a (quoting Discovery Network,
507 U.S. at 419), and that “the precise bounds of the category
of” commercial speech are “subject to doubt,” id. (quoting
Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626,
637 (1985)). As this case amply illustrates, the current
muddled state of the law is emboldening lower courts to
strike out on their own and fashion improperly broad
definitions of what constitutes “commercial speech.”

B. The Test For Commercial Speech Devised By The
California’ Supreme Court Is Extreme,
Unworkable, And Unprecedented.

Not only is the California Supreme Court’s definition of
“commercial speech” inconsistent with this Court’s prior
definitions, it also is inconsistent with this Court’s First
Amendment jurisprudence more generally. In particular, the
ruling below denies full constitutional protection to virtually
all Speech by corporations on matters involving their
business operations or labor conditions. Even where such
speech touches on matters of acknowledged public concer,
and even where it is tinged with direct political or legislative
overtones, it will be entitled only to lesser protection.

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7

If the California Supreme Court’s decision is allowed to
stand, the consequent vacuum that will occur in public
discourse is undeniable. Matters relating to corporations’
business operations and labor conditions constitute nearly all
matters on which corporations have reason to speak. They
also include the very matters on which corporate speakers are
the best informed and thus best able to contribute to a
meaningful discussion on issues of public concern. In this
instance, Nike spoke generally about its business operations
overseas, in the context of an ongoing public policy debate,
without ever mentioning any of its products or services,
much less offering any prices or terms of sale. See Pet. 3a-
4a. Denuding the public square of corporations’ involvement
in robust debate would disserve the public by preventing a
fair and complete treatment of most business issues.

Moreover, the California Supreme Court’s test for
commercial speech is seemingly not limited to speech by
corporations. Indeed, any individual engaged in commerce
who attempts to speak on commercial matters to an audience
that includes actual or potential customers would be swept
within its broad ambit. See id. at 17a-20a. Thus, lawyers
who engage in an informative debate before a local business
group on the topic of tort reform would be covered if their
audience included any actual or potential clients. Doctors
who speak to a local civic association on their concerns about
rising malpractice rates and what could be done about them
would be covered if the audience included any actual or
potential patients. Any or all of the participants in such a
public forum could be held strictly liable for any factual
misstatements in the course of their discussion.

This breathtakingly broad test is clearly out of step with
long-established First Amendment principles. Decades ago,
the Court squarely held that self-interested speech
“concerning the conditions in industry and the causes of
labor disputes,” much like the speech at issue here, is not
only protected by the First Amendment, but is “indispensable

8

to the effective and intelligent use of the processes of popular
government to shape the destiny of modern industrial
society.” Thornhill v. Alabama, 310 U.S. 88, 103 (1940).
Other cases agree that speech relating to a corporation’s
business operations — especially speech relating to its labor
conditions, like Nike’s speech here — is fully protected. See
NLRB vy. Gissel Packing Co., 395 U.S. 575, 616-17 (1969);
Thomas v. Collins, 323 U.S. 516, 531-32 (1945); NLRB vy.
Virginia Elec. & Power Co., 314 U.S. 469, 477-78 (1941).

In a number of other contexts, moreover, the Court has
broadly emphasized the need to protect the publication of
information on issues of “public concern,” without excluding
issues involving business operations and labor conditions. In
Bartnicki v. Vopper, 532 U.S. 514 (2001), for example, the
Court permitted the publication of information, even though
it had been illegally obtained, because it concerned important
collective-bargaining negotiations that were pending at the
time, and “negotiations over the proper level of
compensation for teachers . . . were unquestionably a matter
of public concern,” id. at 535. Similarly, in Philadelphia
Newspapers v. Hepps, 475 U.S. 767 (1986), the Court noted
that allegations of illegality in the manner in which a
franchising company’s principal stockholder conducted his
business likewise involved matters of public concern, and
comments made about them were thus subject to heightened
protection under the First Amendment, see id. at 775-78.
Finally, in First National Bank of Boston v. Bellotti, 435 U.S.
765 (1978), the Court reasoned that speech by a corporation
on an upcoming referendum on taxes was “at the heart of the
First Amendment’s protection,” id. at 776, and therefore
applied strict scrutiny to, and ultimately struck down, a state
law restricting corporate expenditures for such issue
advocacy in election campaigns, see id. at 795. Like the
speech in all of those cases, the speech at issue here informs
the public about matters of public concern, and therefore
should be fully protected.

9

Other cases supporting the proposition that speech about
matters of public concern is fully protected are legion. See,
e.g., Schenck v. Pro-Choice Network, 519 U.S. 357, 377
(1997) (“commenting on matters of public concern” is one of
the “classic forms of speech that lie at the heart of the First
Amendment”); Board of County Comm'rs v. Umbehr, 518
U.S. 668, 685 (1996) (First Amendment protects against
termination of government contract for solid waste disposal
based on “speech on a matter of public concern,” including
county landfill rates); R.A.V. v. City of St. Paul, 505 U.S.
377, 421 (1992) (Stevens, J., concurring) (“[s]peech about
public officials or matters of public concern receives greater
protection than speech about other topics”); Pacific Gas &
Elec. Co. v. Pub. Utils. Comm'n of Cal., 475 U.S. 1, 8-9
(1986) (plurality opinion) (utility company’s discussion with
its customers of topics like energy conservation implicates
“*matters of public concern’ that the First Amendment both
fully protects and implicitly encourages”). And the Court has
repeatedly held that incorrect statements on matters of public
concern, no less than correct ones, are protected, on the
ground that errors are inevitable in such debates. See, e.g.,
Hustler Magazine, Inc. v. Falwell, 485 U.S. 46, 51-52
(1988); Hepps, 475 U.S. at 772-73; New York Times Co. v.
Sullivan, 376 U.S. 254, 271-72 (1964).

As the Court has aptly observed, “[f]reedom of discussion,
if it would fulfill its historic function in this nation, must
embrace all issues about which information is needed or
appropriate to enable the members « * society to cope with the
exigencies of their period.” Thornhill, 310 U.S. at 102. The
ruling below is entirely out of harmony with this fundamental
First Amendment principle. For this reason alone, the
California Supreme Court’s decision should be reversed.

10

C. The Test For Commercial Speech Applied Below
Would Suppress A Broad Range Of Accepted And
Beneficial Speech By Companies And Individuals.

Because the California Supreme Court significantly
curtailed the freedom of speech by holding that most speech
by businesses is “commercial speech” subject to reduced
First Amendment protection, its holding should not be
allowed to stand. Under the ruling below, speech on public
policy matters such as labor, environmental, and economic
issues involving a company’s operations can readily be
classified as mere “commercial speech.” A_ substantial
amount of protected speech is therefore jeopardized. Just as
Nike discussed its overseas labor operations in the statements
at issue in this case, other businesses frequently participate in
the public debate by making statements about aspects of their
corporate operations and corporate affairs. Indeed, this
participation is often intimately connected with broader
efforts to influence public policy through legislative or
regulatory action. See, eg., Eastern R.R. Presidents
Conference v. Noerr Motor Freight, Inc., 365 U.S. 127
(1961) (publicity campaign conducted by railroads against
truckers, which helped persuade governor to veto legislation,
held not to violate antitrust laws, based in part on free speech
concerns). For example:

e Energy companies, such as ChevronTexaco, express
their views on whether or to what extent their
operations cause or contribute to global climate
change, and the role of their operations in any
changes. See, e.g., Statement on Global Climate
Change, at www.chevrontexaco.com/social_respon-
sibility/environment/global_climate.asp (last visited
Feb. 27, 2003).

e Corporations involved in the United Space Alliance,
which manufactured the Columbia for NASA’s
Shuttle program, publish updates on the investigation

- le 7

« A &

ll

currently underway into the recent tragedy. See, e.g.,
Update on Investigation, at www.unitedspace-
alliance.com/columbia/030207-1300.htm (last visited
Feb. 27, 2003).

Health care providers and drug manufacturers, such
as Merck, discuss the causes of their rising health care
and drug prices, and the form of regulation or
deregulation that will best control those prices. See,
e.g., Remarks by Raymond V. Gilmartin, Chief
Executives Club of Boston, af www.merck.com/
newsroom/executive_ speeches/011900.html (Jan. 19,
2000).

Insurance companies, such as AIG and General Re,
state their positions on the feasibility of providing
terrorism insurance and the economic need for
legislative action. See, e.g., Terrorism Insurance Still
On Front Burner For Insurers, Lawmakers, Ins. J., at
www.insurancejournal.com/magazines/southcentral/
2002/05/13/features/19079.htm (May 13, 2002).

Automobile manufacturers, such as the Ford Motor
Company, join the public debate over whether and to
what extent automobile emissions cause pollution and
health effects, and the costs and feasibility of
requiring further reductions in automobile emissions.
See, e.g., Bill Ford’s Speech to Greenpeace, at www.
ford.com/en/ourCompany/environmentallnitiatives/
environmental Actions/billFordsSpeechToGreenpeace
-htm (Oct. 5, 2000).

Manufacturers, such as General Electric, discuss the
topic of environmental discharges and the effects that
any discharges have had on rivers and other natural
resources. See, e.g., Statement on GE Hudson River
Efforts, at www.ge.com/commitment/ehs/leadership/
ehs_hudson_river.htm (last visited Feb. 27, 2003).

12

Under the California Supreme Court’s decision, all of this
speech could be subjected to the reduced First Amendment
protection accorded “commercial speech,” and corporations
and their employees could be held strictly liable for any and
all factual misstatements made in the course of heated and
fast-moving debates. Such treatment marks a serious intru-
sion on the freedom of speech.

il. THE COURT SHOULD HOLD THAT THE
“COMMERCIAL SPEECH” DOCTRINE ONLY
ADDRESSES ADVERTISING OF PRODUCTS OR
SERVICES OFFERED FOR SALE.

A. The History Of The “Commercial Speech”
Doctrine Demonstrates That It Addresses Only
The Advertising Of Products And Services, Not
Speech By Corporations More Generally.

This case presents an especially useful vehicle for clearing
up the widespread confusion about the definition of
“commercial speech.” While line-drawing in this area may
be difficult in some respects, this case turns on an obvious
line: only speech that in some way advertises the attributes
of products or services for sale should be considered
“commercial speech,” and speech that merely relates to
business operations or other matters of public concern should
be accorded full First Amendment protection.

The history of the “commercial speech” doctrine strongly
supports this distinction. The now-familiar doctrine was
crafted to grant limited protection to product advertising, not
to limit the protection already applied to other types of
speech by corporations. Specifically, this Court developed
the modern “commercial speech” doctrine in the 1970s in re-
sponse to its earlier holding that “the Constitution imposes no

. . restraint on government as respects purely commercial
advertising.” Valentine v. Chrestensen, 316 U.S. 52, 54
(1942) (emphasis added).

13

In Virginia Board of Pharmacy, the Court gave birth to the
“commercial speech” doctrine by overruling Valentine and
holding that “commercial speech, like other varieties, is
protected.” 425 U.S. at 770. In doing so, the Court could not
have been clearer that by “commercial speech,” it was
referring only to the same kind of product advertisement at
issue in Valentine:

[T]he question whether there is a First
Amendment exception for “commercial
speech” is squarely before us. Our pharmacist
does not wish to editorialize on any subject,
cultural, philosophical, or political. He does
not wish to report any particularly
newsworthy fact, or to make generalized
observations even about commercial matters.
The “idea” he wishes to communicate is
simply this: “1 will sell you the X prescription
drug at the Y price.” Our question, then, is
whether this communication is wholly outside
the protection of the First Amendment.

Id. at 760-61 (emphasis added).’ From its genesis, therefore,
the “commercial speech” doctrine was designed to address
speech that does not “editorialize on any subject,” “report
any particularly newsworthy fact,” or “make generalized
observations . . . about commercial matters.” /d. Instead, it
was designed only to provide some protection, albeit limited,
to speech that does “no more than propose a commercial
transaction.” /d. at 762 (internal quotation omitted).

3 In Valentine, an individual circulated a handbill that advertised his
commercial exhibition of a submarine. After he was told he could not
distribute such material under city law, he then reprinted the handbill,
adding a protest of the city’s wharfage policies on the back. The Court
rejected the argument that the discussion on the back of the handbill
constituted protected speech, but only because it found this discussion to
be an intentional “sham” included solely for the purpose of evading the
ordinance. See Valentine, 316 U.S. at 53-55.

14

The Court has never departed from this understanding. To
the contrary, the Court has repeatedly recognized that the
advertisement of products or services, as opposed to general
discussion of business operations or other matters of public
concer, is the sine qua non of “commercial speech.” Thus,
in the early years after Virginia Board of Pharmacy, the
Court made clear that “commercial speech” is speech that
“serves to inform the public of the availability, nature, and
prices of products and services.” Bates v. State Bar of
Arizona, 433 U.S. 350, 364 (1977); see also Metromedia,
Inc. v. City of San Diego, 453 U.S. 490, 507 (1981) (referring
to “commercial speech” as “commercial price and product
advertising”). More recently, too, this Court has confirmed
that “‘[t}he entire commercial speech doctrine . . . represents
an accommodation between the right to speak and hear
expression about goods and services and the right of
government to regulate the sales of such goods and
services.” 44 Liquormart, Inc. v. Rhode Island, 517 US.
484, 499 (1996) (plurality opinion) (quoting Laurence H.
Tribe, American Constitutional Law § 12-15, at 903 (2d ed.
1988)) (emphasis added and omitted).

In keeping with this established understanding of the
commercial speech doctrine, this Court, in sharp contrast
with the approach taken by the California Supreme Court,
has “always been careful to distinguish commercial speech
from speech at the First Amendment’s core.” Florida Bar v.
Went For It, Inc., 515 U.S. 618, 623 (1995). For example,
while a manufacturer’s speech about the attributes of a
specific product is “commercial” regardless whether it is
linked to a public debate, see Bolger, 463 U.S. at 67-68, an
energy company’s speech to its customers about energy
conservation more generally is not, see Pacific Gas, 475 U.S.
at 8-9 (plurality opinion). The latter speech “extends well
beyond speech that proposes a business transaction . . . and
includes the kind of discussion of ‘matters of public concern’

—

15

that the First Amendment both fully protects and implicitly
encourages.” /d. (internal citations omitted).

B. Nike’s Discussion Of Its Business Operations And
Labor Practices Should Not Be Treated As
“Commercial Speech.”

Nike’s speech in this case evidently addresses matters of
public concern, and thus merits full First Amendment
protection. Far from advertising the attributes of its shoes or
other products, Nike was merely responding to public
criticism relating to globalization — an issue that has re-
cently been the subject of major protests worldwide, includ-
ing here in the Nation’s capital. Nike was not engaging in
brand-name advertising containing representations about the
quality or cost of its products, and indeed made no references
to specific products or services at all. Accordingly, this
speech is far removed from the advertising at issue in cases
such as Virginia Board of Pharmacy.

To be sure, the California Supreme Court suggested that
Nike’s speech would not have qualified as “commerciai
speech” if Nike had discussed international labor issues
generically without referring to specific facts about its own
operations. See Pet. 26a. But that is no more plausible than
requiring a lawyer to draft a brief without mentioning any of
the facts in the case. Opinions naturally flow from facts, and
are certainly more persuasive when they are grounded in
facts. The public would in no wise benefit from a constitu-
tional rule that encouraged Nike to assert conclusions without
disclosing underlying facts. Under such a bizarre regime, the
public would receive less information from Nike and would
have less basis for undertaking an intelligent assessment of
Nike’s statements. As this Court has noted, “public debate
must not only be unfettered; it must also be informed.”
Bellotti, 435 U.S. at 783 n.18 (internal quotation omitted).

The net effect of the California Supreme Court’s rule
would be to subject speech by businesses on important public

16

policy matters — but not competing speech by their oppo-
nents — to the reduced protection accorded “commercial
speech.” In this case, anti-globalization campaigners would
be allowed to speak on an unqualified basis, but Nike’s
speech on the same issues would be restricted. In effect, this
rule merely discriminates on the basis of the identity of the
speaker, in violation of the well-established principle that the
government may not “license one side of a debate to fight
freestyle, while requiring the other to follow Marquis of
Queensberry rules.” R.A.V., 505 U.S. at 392; see also
Bellotti, 435 U.S. at 777 (“The inherent worth of the speech
in terms of its capacity for informing the public does not
depend upon the identity of its source, whether corporation,
association, union, or individual.”); Pacific Gas, 475 U.S. at
8 (noting that “(t]he identity of the speaker is not decisive in
determining whether speech is protected” and adding that
“{cJorporations and other associations, like individuals,
contribute to the discussion, debate, and the dissemination of
information and ideas that the First Amendment seeks to
foster”) (internal quotation omitted).

The principle that the government must remain neutral
among speakers is but a corollary of the broader neutrality
principle in First Amendment jurisprudence, which
recognizes that there is “an ‘equality of status in the field of
ideas,’ and government must afford all points of view an
equal opportunity to be heard.” Police Dep't of Chicago v.
Mosley, 408 U.S. 92, 96 (1972) (quoting Alexander
Meiklejohn, Political Freedom: The Constitutional Powers
of The People 27 (1948)). Thus, for example, the Court has
long held that government regulations that discriminate on
the basis of viewpoint are presumptively unconstitutional.
See, e.g., Good News Club v. Milford Cent. Sch., 533 U.S.
98, 106-12 (2001); Rosenberger v. Rector & Visitors of Univ.
of Va., 515 U.S. 819, 828-30 (1995); Turner Broad. Sys. v.
FCC, 512 U.S. 622, 641-43 (1994); R.A.V., 505 U.S. at 392.

17

Suppressing speech on a matter of public concern merely
because the speaker is a corporation would run contrary to
our “profound national commitment to the principle that
debate on public issues should be uninhibited, robust and
wide-open.” Sullivan, 376 U.S. at 270. Because Nike’s
speech had no connection with the sale of specific goods or

. Services, and did not even promote the attributes of its goods

or services, it should not be treated as “commercial speech.”

C. If Nike’s Editorializing Is Found To Constitute
“Commercial Speech,” It Should Still Be Entitled
To The Highest Constitutional Protection.

Even if this Court concludes that Nike’s speech is “com-
mercial,” that should not be the end of the matter. In the
past, this Court has “followed an uncertain course” not only
as to the definition of “commercial speech,” but also as to the
level of protection to which “commercial speech” is entitled.
See Lorillard, 533 U.S. at 574 (Thomas, J., concurring in part
and concurring in judgment). In some cases, this Court has
held that the “mere fact” that speech is commercial “does not
in and of itself dictate the constitutional analysis that should
apply to decisions to suppress [it].” 44 Liguormart, 517 U.S.
at 501; see also Discovery Network, 507 U.S. at 424 (stress-
ing that courts should not “place too much importance on the
distinction between commercial and noncommercial
speech”). But in other, mostly older cases, the Court has held
the “commercial speech” label to be dispositive of the level
of protection accorded the speech. See, e.g., Central Hudson,
447 U.S. at 561-66.

In three of its most recent “commercial speech” cases, the
Court has only added to the uncertainty. In United Foods,
the Court noted that precedents which “accord less protection
to commercial speech than to other expression” have “been
subject to some criticism.” 533 U.S. at 409-10 (citing
opinions of Stevens and Thomas, JJ.). But the Court
concluded that it “need not enter into the controversy”

18

because the restriction at issue in that case could not be
upheld under any standard. /d. at 410.

In Lorillard, the Court recognized that a majority of the
Justices have criticized Central Hudson, but again concluded
that the restriction at issue failed even the Central Hudson
standard:

Admittedly, several Members of the Court
have expressed doubts about the Central Hud-
son analysis and whether it should apply in
particular cases. See, e.g., [Greater New Or-
leans Broad. Ass'n, Inc. v. United States, 527
U.S. 173, 197 (1999)] (Thomas, J., concurring
in judgment); [44 Liquormart, 517 U.S. at
501, 510-14] (joint opinion of Stevens, Ken-
nedy, and Ginsburg, JJ.); id. at 517 (Scalia, J.,
concurring in part and concurring in judg-
ment); id. at 518 (Thomas, J., concurring in
part and concurring in judgment). But here, as
in Greater New Orleans, we see “no need to
break new ground. Central Hudson, as ap-
plied in our more recent commercial speech
cases, provides an adequate basis for deci-
sion.”

533 U.S. at 554-55; see also id. at 571 (Kennedy, J.,
concurring in part and concurring in judgment) (emphasizing
that in view of the “obvious overbreadth” of the restriction at
issue, the Court was not required to “consider whether
Central Hudson should be retained in the face of the
substantial objections that can be made to it”); id. at 575
(Thomas, J., concurring in part and concurring in judgment)
(noting that “there is no philosophical or historical basis for
asserting that commercial speech is of lower value than
noncommercial speech”) (internal quotation omitted).

Most recently, in Thompson v. Western States Medical
Center, 122 S. Ct. 1497 (2002), the Court expressly noted

19

that “several Members of the Court have expressed doubts
about the Central Hudson analysis,” id. at 1504. Again,
however, the Court declined “to break new ground,” in part
because “[nJeither party . . . challenged the appropriateness
of applying the Central Hudson framework.” Jd.

The simplest way to resolve this case would be to hold that
Nike’s speech did not qualify as “commercial speech.” If
this Court were to conclude to the contrary, however, it
should also take this opportunity to confirm that “commercial
speech” is not invariably given a lower level of protection.
At least where speech by corporations implicates important
public policy matters, and does not even refer to the
attributes of goods or services offer d for sale, it should be
afforded heightened protection. Such an approach would
also be more consistent with the Court’s assertion that the
determination whether speech is “commercial” is “a matter of
degree.” Discovery Network, 507 U.S. at 423. Members of
this Court have frequently suggested that it would be
inappropriate to take an excessively rigid approach as to
whether speech is “commercial” or not. See Lorillard, 533
U.S. at 575 (Thomas, J., concurring in part and concurring in
judgment) (expressing “doubt whether it is even possible to
draw a coherent distinction between commercial and
noncommercial speech”); Rubin v. Coors Brewing Co., 514
U.S. 476, 494 (1995) (Stevens, J., concurring) (commenting
on the “artificiality of a mgid commercial/noncommercial
distinction”).

This case amply demonstrates the danger of automatically
subjecting all “commercial” speech to lower protection.
Under the California Supreme Court’s approach, Nike’s
speech will be entitled to no protection at all if it is later
determined to be inaccurate in any respect, and will be
entitled only to very limited protection even if it were stated
with complete accuracy. See Pet. 10a. Nor, as we have seen,
are the implications of this case limited to Nike. As matters
stand in California, most corporate speech may now be

20

treated as “commercial” speech. Companies in California are
therefore faced with the undesirable choice of remaining
quiet on important public policy debates, including those
involving their own operations, or facing strict liability for
any misstatements they may make in the context of heated
and fast-moving debate. The latter risk is far from trivial: at
least one other similar lawsuit has already been filed in
California against eighteen national and _ international
clothing suppliers and retailers. See Union of Needletrades
Indus. & Textile Employees, AFL-CIO v. The Gap, Inc., Cal.
Super. Ct. No. 300474.

And the implications of the California Supreme Court’s
decision are not limited to the State of California alone. The
increasingly widespread dissemination of corporate speech
means that the law applied in the least protective jurisdiction
effectively governs the national, and indeed worldwide,
statements of thousands of corporations. If California
aggressively punishes this kind of speech, then corporate
speakers that do business in California will effectively be
chilled from engaging in that speech at all.

The need to put an immediate halt to the Californ.a
Supreme Court’s effort to broaden the “commercial speech”
doctrine is plain enough. And the need for the Court to offer
more comprehensive guidance to the lower courts is equally
plain. The currently prevalent uncertainty as to when speech
will be treated as “commercial,” and what level of protection
“commercial” speech will receive, can only “inhibit the
exercise of [First Amendment] freedoms” by “lead[ing]
citizens to steer far wider of the unlawful zone . .. than if the
boundaries of the forbidden areas were clearly marked.”
Grayned v. City of Rockford, 408 U.S. 104, 109 (1972)
(internal quotation omitted). The Court should take this
opportunity to reconcile its confusing and contradictory
precedents, and thereby bring much-needed clarification to
this important corner of First Amendment law.

EY A AT AR OO OR ERC

21

CONCLUSION

For the foregoing reasons, this Court should reverse the
decision below and remand for the case to be dismissed.

Respectfully submitted,

ROBIN S. CONRAD KENNETH W. STARR

NATIONAL CHAMBER Counsel of Record
LITIGATION CENTER, INC. RICHARD A. CORDRAY
1615 H Street, N.W. KANNON K. SHANMUGAM

Washington, D.C. 20062
(202) 463-5337

KIRKLAND & ELLIS

655 Fifteenth Street, N.W.
Washington, DC 20005
(202) 879-5000

February 28, 2003

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0611%3A25. Public record. Not legal advice.