Amicus Curiae Brief — Nike, Inc. v. Kasky

No. 02-575

_——_—_—_—-— OS 'O’'vO’'OrT’'''’''"|

IN THE _—- acer

Supreme Court of the Anited State

| FEB 28 2n3

NIKE, INC. et ai.,

Petitioners,

Vv.

MARC KASKY,

Respondent.

On Wnt of Certioran

to the Supreme Court of California

BRIEF OF EXXONMOBIL, MICROSOFT,

MORGAN STANLEY, AND GLAXOSMITHKLINE AS

AMICI CURIAE IN SUPPORT OF PETITIONERS

David H. Remes

Counsel of Record

Covington & Burling

1201 Pennsylvania Avenue, N.W.

Washington, D.C. 20004-2401

(202) 662-5212

Attorney for Amici Curiae

February 28, 2003

QUESTION PRESENTED

Whether a corporation’s speech on matters of public

concer 1s entitled to the same level of First Amendment

protection as speech on such matters by other speakers

Ht

TABLE OF CONTENTS

QUES 1 PUN PPPRIaeE ES BaP occcesescsccsesssscsstiauiammmaniiaaamaaan i

TABLE OF Aly TERIA 5 Bw ccccecccsnssscsssnhibicammmuummaiaaii 1

iSpy ts ye FF | ar SEN l

SUMMARY OF ARGUBEENT ucccccssssccssssccersosensssspesusneones ol

ARGUMENT....... se eseonccessesetaponndeialisnumeiadinmaaaaennn 4

I. A CORPORATION’S SPEECH ON MATTERS

OF PUBLIC CONCERN MERITS THE

HIGHEST LEVEL OF FIRST AMENDMENT

PROT IG 5 BIS. cccccscsssnnttnisasmmmmenmasiaaan 4

A. Nike’s Speech Plainly Addressed Matters of

PUES COICEER. .<:ccccssscssccesseneteninmanaeee 5

B. A Corporation’s Speech on Matters of Public

Concern Requires the Same “Breathing

Space”’ as Speech by Other Speakers. ..................... 8

C. The Governmental Interest that Justifies

Commercial Speech Regulation Does Not

Justify Such Regulation of Corporate Speech

on Matters of Public Concerm. ...............::ccc0ecee0 l

Il. UNDER ASARCO, A PARTY IN NIKE’S

POSITION HAS STANDING TO INVOKE

as

THE AUTHORITY OF THIS COURT.............0.00...... 21

A. Nike Satisfies the Article II] Requirements

SOP SARGERR, ....:ccsscseniensesnseamaaidi 21

B. ASARCO Confirms the Standing of a Party in

a nee 24

CONC LUI ..:0:cccisnssssiisidimmmniaiansaeaneliaaaeeaiae 27

ll

TABLE OF AUTHORITIES

CASES

44 Liquormarrt, Inc. v. Rhode Island, 517 U.S. 484

a ae: | TT

Abrams v. United States, 250 U.S. 616 (1919)................... 20

ASARCO Inc. v. Kadish, 490 U.S. 605

A a > F FS

Associated Press v. United States, 326 U.S. 1 (1945)........ 13

Bates v. State Bar, 433 U.S. 350 (1977)..........cccccccccccee. 16

Bd. of Trustees v. Fox, 492 U.S. 469 (1989) ..... ee. 16

Bolger v. Youngs Drug Prods. Corp., 463 U.S. 60

Bose Corp. v. Consumers Union of United States, Inc.,

466 U.S. 485 (1984) ............. a ee a

Carey v. Brown, 447 U.S. 455 (1980) .................. | a as

Cent. Hudson Gas & Elec. Comp. v. Pub. Serv

Comm 'n, 447 U.S. 557 (1980)...........c.cccccccccceeeeseeeeeeee . 16

City of Cincinnati v. Discovery Network, Inc., 507 U.S.

ESE 16, 17, 18

Cohen v. California, 403 U.S. 15 (1971) ......cceee, 14

Connick v. Myers, 461 U.S. 138 (1983) ...............cccccccceeeeeee. 5

Consol. Edison Co. v. Pub. Serv. Comm'n, 447 U.S.

diester cininesienetnadeneepnstnnnnentenaeseses passim

Denver Area Telecom. Consortium, Inc. v. FCC, 518

Ee 14

Dombrowski v. Pfister, 380 U.S. 479 (1965) ..........cccees 23

Edenfield v. Fane, 507 U.S. 761 (1993)...........ccccce 15,17

First Nat'l Bank v. Bellotti, 435 U.S. 765

i ANI ce 5, 9, 12, 22

7 eeeeeOOO—aoresSssEEOEO_

1vV

Fla. Bar v. Went For It, Inc., 515 U.S. 618

OID ....ncssiacciossictitnitsintinatnilenaesniiinimnmiaiainnmimnmdann 16, 17,19

Garrison v. Louisiana, 379 U.S. 64 (1964)............cccceeeeeteees 5

Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974)............ 5, 8

Gitlow v. New York, 268 U.S. 652 (1925).......----.-ceeeeeeeeeees 20

Gooding v. Wilson, 405 U.S. 518 (1972) .......ccccceceeeeeeereees 23

Greater New Orleans Broad. Ass'n v. United States,

RE RG, yyy — 13

Hustler Magazine v. Falwell, 485 U.S. 46 (1988) ............. 12

Lamb's Chapel v. Ctr. Moriches Union Free Sch. Dist.,

CO ————y—y—E= 14

Leathers v. Medlock, 499 U.S. 439 (1991)..............:ccccceee 14

Lorillard Tobacco Co. v. Reilly, 533 U.S. 525

I asiinempeadeesieaeaedeneiananenaa 15, 17, 18, 20

Members of the City Council of Los Angeles v.

if axpayers for Vincent, 466 U.S. 789 (1984)................ 13

Miami Herald Publ'g Co. v. Tornillo, 418 U.S. 241

| 24

NAACP v. Button, 371 U.S. 415 (1963) .................000000 5, 22

NAACP v. Claiborne Hardware Co., 458 U.S. 886

OE. ._..... cccniicstenepeaatamaantestnnninmmencmemnninssasan aen> Cagmaniinasiiaia 4

Nashville, C. & St. L. Railway v. Wallace, 288 U.S.

a 22

Nebraska Press Ass'n v. Stuart, 423 U.S. 1319 (1975)...... 24

Nebraska Press Ass'n v. Stuart, 423 U.S. 1327 (1975)...... 24

New York Times Co. v. Sullivan, 376 U.S. 254

OI occnceerenncecnnsssresnsssnsnsinemessenmmmmmmnnenianee passim

Ohralik v Ohio State Bar Ass'n, 436 U.S. 447

———————————————— 18, 20

Pacific Gas & Elec. v. Pub. Util. Comm'n, 475 U.S. 1

OS ———————————— 12, 14, 22

y

Philadelphia Newspapers, Inc. v. Hepps, 475 U.S. 767

Pickering v. Bd. of Educ., 391 U.S. 563 (1968) .....0.00000000.... 5

Police Dep't of Chicago v. Mosley, 408 U.S. 92 (1972)... 13

Posadas de Puerto Rico Assocs. v. Tourism Co.. 478

AE ec MTN eT 19

Quinn v. Millsap, 491 U.S. 95 (1989) oo... coceeeees 22

R.A.V. v. City of St. Paul, 505 U.S. 377 (1992).000000. oc... 14

Renton v. Playtime Theaters, Inc., 475 U.S. 41 (1986)........ y

Riley v. Nat'l Fed'n for the Blind, Inc., 487 U.S. 781

Spa hecenericennoeeiesneicmenrninensasneminnaaniaieneeiaaanamcenainanesasiiiaaiatani 20

Rosenberger v. Rector & Visitors of the Univ. of Va.,

i re 13

Rosenbloom v. Metromedia, Inc., 403 U.S. 29

EIT ei insteeenicesissisistarinnicnssstetiteneatnnpairtingssnentnenintunstsitaniasest 12, 23

Rubin v. Coors Brewing Co., 514 U.S. 476 (1995)............ 18

Sec 'y of State of Md. v. Joseph H. Munson Co., 467

ptees EH UT cccnnintitannindiintisarennmumenteinaainsamanaeti 21

Shapero v. Ky. Bar Ass'n, 486 U.S. 466 (1988)....0.00000...... 19

Simon & Schuster, Inc. v. Members of the N_Y. State

Crime Victims Bd., 502 U.S. 105 (1991)... 13

Smith v. California, 361 U.S. 147 (1959) ..0.0ccccccccceceeeeee 23

Speiser v. Randall, 357 U.S. 513 (1958)............. 9, 11, 12, 23

Steffel v. Thompson, 415 U.S. 452 (1974) .o....ccocccccceceeeeee 26

Thomas v. Collins, 323 U.S. 516 (1945) .o...ccccccccccceeeceeeees 22

Thompson v. W. States Med. Ctr., 122 S. Ct. 1497

ST TaTa ivnisnserssnsesoteetvntnsteeniernininerncatnssiastensteasinsnintesasanien 15, 16, 17, 19

Thornhill v. Alabama, 310 U.S. 88 (1940)................... 22, 24

Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622 (1994)...... 14

vi

United States v. United Foods, Inc., 533 U.S. 405

Valley Forge Christian Coll. v. Ams. United for

Separation of Church & State, Inc., 454 U.S. 464

CED .....nnscencnsnecnniastnsansinnsetincseniientineeenereiCnsentneenenete 26

Va. State Bd. of Pharm. v. Va. Citizens Consumer

Council. Inc., 425 U.S. 748 (1976).............0000 15, 16, 19

Vt. Agency of Natural Res. v. United States ex rel.

Gogaeee FID UD. FES (OGD cecocevcevcccccccecccccesccscscscnssese 21

Wainwright v. Stone, 414 U.S. 21 (1973)... 22

Weiman v. Updegraf, 344 U.S. 183 (1952) .......:..::ceeceee 13

Whitney v. California, 274 U.S. 357 (1927)... 20

Winters v. New York, 333 U.S. 507 (1948) ..........ccc0ee00 22

Wooley v. Maynard, 430 U.S. 705 (1977)... 26

Zauderer v. Office of Disciplinary Counsel, 471 U.S.

)), 19

FEDERAL STATUTES

WB UBC. 6 ZION oacccccceceneserecevscrecsesescscsnossvsnsssosesssnsoncsesesse 26

BB UBC. 6 1G qoccececcccerecsvecescecsevscsssersessnsnsoseseososessossssecses 26

STATE STATUTES

Cal. Bus. & Prof. Code § 17200 ef S€q...........-c0ccee0eee 2, 11

Cal. Bus. & Prof. Code § 17500 ef S0q.........---::0cccseeeees 2, 11

OTHER AUTHORITIES

Richard H. Fallon et al., Hart and Wechsler’s The

Federal Courts and the Federal System 155-56 (4th

en 25

Robert L. Stern et al., Supreme Court Practice § 18.1,

Gt B14 (Othe C6. 2O0Z) .22cecnenccncecsecsccsecceccsecsencrsosensenseseess 25

INTEREST OF AMICI

ExxonMobil is the world’s largest private integrated oil

company, engaged in oil and gas exploration, production,

supply, transportation, and marketing in some 200 countries

around the world.

Microsoft is the worldwide leader in software, services,

and Internet technologies for personal and business comput-

ing.

Morgan Stanley is one of the world’s largest diversified

financial services companies, providing investment banking,

underwniting, sales and trading, investment advisory, asset

management, and credit card services to individuals,

corporations, governments, and other entities around the

world.

GlaxoSmithKline ts one of the world’s largest pharma-

ceutical companies. It discovers, develops, and markets

prescnption drugs and consumer products in the United

States and around the world.

Each of these amici has a strong interest in vindicating

the First Amendment nights threatened by the judgment of

the California Supreme Court, and in protecting -the

availability of relief in this Court in the circumstances

presented here.

Each amicus does business in California and, accord-

ingly, is potentially subject to civil and criminal liabilities

The parties have filed with the Clerk of this Court blanket

consents to the filing of amicus briefs. Pursuant to Rule 37.6,

amici state that no counsel for a party in this case authored this

brief in whole or in part and that no person or entity other than

amici or its counsel made a monetary contribution to the

preparation or submission of this brief.

5

imposed under Cal. Bus. & Prof. Code § 17200 et seq. and

§ 17500 et seg. or similar laws that might be enacted in

other states. Like virtually every other large corporate

enterprise in the United States, amici regularly speak out on

issues of public concern and in so doing place before the

public facts about their products, services, or business

operations and practices. Such issues range from human

rights abroad; global climate change; environmental effects

of business operations; healthcare reform, including such

issues as access to prescription drugs, and healthcare crises

such as the AIDS epidemic in Africa; and involvement with

controversial foreign governments; to product safety;

consumer issues, such as privacy and security; intellectual

property rights; equitable treatment of customers; and

diversity in the workplace. In some instances, amici are

responding to criticisms; in others, they are initiating public

discussion. Often, they are seeking to advance legislative or

regulatory goals. In each such instance, their speech is an

effort to engage public opinion on a vital issue of the day.

If a corporation’s every press release, letter to an editor,

customer mailing, op-ed article, and website posting may,

under the California statutes at issue here, be the basis for

civil and criminal actions, corporate speakers will find it

difficult to address issues of public concern implicating their

products, services, or business operations and prac-

tices—even to defend themselves in the court of public

opinion when attacked.

SUMMARY OF ARGUMENT

1. Nike’s speech and speech by corporations on other

matters of public concern merit the highest level of First

Amendment protection. Amid swirling controversy about

globalization and the operations and practices of multina-

tional corporations—an international controversy marked by

burning editorials, consumer boycotts, violent demonstra-

tions, and urgent demands for legislative action—Nike was

3

targeted by activists and portrayed in the news media as

typifying multinational corporate misconduct in the Third

World. Nike responded to these criticisms and portrayals

through editorial advertisements, press releases, letters to the

editor, op-ed articles in newspapers, and other established

channels of public discussion and debate. The context,

form, and content of Nike’s speech demonstrate that the

company was addressing matters of public concern, where

the interests served by the First Amendment are at their

zenith. Such speech by a corporation merits the highest

level of First Amendment protection and is entitled to the

same “breathing space” as speech on matters of public

concer by other speakers.

Nike’s speech cannot legitimately be classified as “com-

mercial speech.” Despite the indefiniteness of Bolger v.

Youngs Drug Products Corp., 463 U.S. 60 (1983), the Court

has made clear that “commercial speech” is not merely

speech that has an economic motivation, but “speech that

proposes a commercial transaction.” That category of

speech is both defined and limited by the governmental

interest that justifies special leeway in its regulation:

protection of consumers from “commercial harms” incident

to a commercial transaction. Such “commercial harms” may

arise from false or misleading claims about a product (or the

terms and conditions on which it is available) made by a

seller in an advertisement for the product, or in the product’s

labeling, or they may arise from particularly oppressive

forms of solicitation. These “commercial harms” are rightly

deemed to be sufficiently severe and unavoidable, and the

countervailing interests so slight, as to justify a degree of

regulation that cannot be tolerated in the realm of political

or social debate. A corporation’s speech on matters of

public concern, including statements about a product’s

qualities or characteristics or the impacts of a company’s

operations or practices, presented in established channels of

public discussion and debate and not as part of a selling

4

message in product advertising or product labeling, does not

threaten such “commercial harms.” The category of

“commercial harms” cannot itself be expanded to reach the

effects of corporate speech on matters of public concern,

presented in such channels of communication, lest speech

that lies at the heart of the First Amendment be curtailed.

2. Under ASARCO Inc. v. Kadish, 490 U.S. 605 (1989), a

party in Nike’s position has standing to invoke the authority

of this Court. The California Supreme Court has construed

California law in a manner that exposes Nike and other

corporate speakers to potential civil and criminal liability for

engaging in core First Amendment speech. As a result,

Nike must now defend its past speech in a lawsuit that the

First Amendment forbids, and its future speech (and that of

other corporate speakers) is gravely chilled. Each of these

effects causes Nike “direct, specific, and concrete injury,”

id. at 623-24, thus entitling Nike to invoke the authority of

this Court under Article III. For a party in Nike’s position,

sued in state court by a plaintiff lacking Article III standing,

under a state statute that the state’s highest court has

sustained against the party’s iederal constitutional challenge,

the only federal remedy is in this Court.

ARGUMENT

I. A CORPORATION’S SPEECH ON MATTERS OF

PUBLIC CONCERN MERITS THE HIGHEST

LEVEL OF FIRST AMENDMENT PROTECTION.

The question presented in this case is whether a corpora-

tion’s speech on matters of public concern is entitled to the

same level of First Amendment protection as speech on such

matters by other speakers. Amici submit that the answer to

this question must be “yes.”

It is axiomatic that speech on public issues occupies the

“highest rung of the hierarchy of First Amendment values”

and is entitled to special protection. NAACP v. Claiborne

ll ii

5

Hardware Co., 458 U.S. 886, 913 (1982) (quoting Carey v.

Brown, 447 U.S. 455, 467 (1980)). Such speech lies “at the

heart of the First Amendment’s protection,” First Nat'l

Bank v. Bellotti, 435 U.S. 765, 776 (1978), because “free

and open debate” on matters of public concern is “vital to

informed decision-making by the electorate,” Pickering v.

Bd. of Educ., 391 U.S. 563, 571-72 (1968), and is “the

essence of self-government,” Garrison v. Louisiana, 379

U.S. 64, 75 (1964). See also New York Times Co. v.

Sullivan, 376 U.S. 254, 270 (1964) (debate on matters of

public concern must be “uninhibited, robust, and wide-

open”’).

To provide “breathing space,” Philadelphia Newspapers,

Inc. v. Hepps, 475 U.S. 767, 778 (1986) (quoting New York

Times, 376 U.S. at 272 (quoting NAACP v. Button, 371 U.S.

415, 433 (1963))), for true speech on matters of public

concer, “the Court has affirmed that ‘[t]he First Amend-

ment requires that we protect some falsehood in order to

protect speech that matters,” Philadelphia Newspapers, 475

U.S. at 778 (quoting Gertz v. Robert Welch, Inc., 418 U.S.

323, 341 (1974)). The First Amendment does not tolerate

strict liability for false speech on matters of public concern

and places heavy burdens on those who would hold a

speaker liable for erroneous statements in addressing such

matters.

As discussed below, Nike’s speech plainly addressed

matters of public concern, and a corporation’s speech on

such matters is entitled to the same “breathing space” as the

speech of others.

A. Nike’s Speech Plainly Addressed Matters of Public

Concern.

“Whether . . . speech addresses a matter of public concern

must be determined by [the expression’s] content, form, and

context....” Connick v. Myers, 461 U.S. 138, 147-48

6

(1983). An examination of each of these factors shows that

Nike’s speech in defense of its labor practices was plainly

speech on a matter of public concern.

Context. The communications to which the company was

responding provide the “context” of Nike’s speech. Those

communications demonstrate that, at least in the eyes of

some, the labor practices of multinational corporations in

developing countries, and Nike’s labor practices in Asia in

particular, have become “one of the major public issues of

our time.” New York Times, 376 U.S. at 271. Indeed, for a

number of activists, Nike’s labor practices in Asia provide a

case study of human-rights abuses by multinational

companies with international diplomatic ramifications.

Thus, for example, the Hong Kong Christian Industrial

Committee stated in a report criticizing the labor practices of

Nike and other shoe companies in China:

As leading international corporations, multinational

sports shoe companies should play a positive role in

improving human rights in China. They should be-

come an example for others to follow.

This is what President Bill Clinton promised when

he de-linked the granting of Most Favoured Nation

status from human rights in China. Mr. Clinton in-

sisted that US capital can have a positive effect on the

development of human rights in China, but we have

yet to see these positive results.

Petitioner's Lodging 96, 117 (First Amended Complaint,

Exh. C, Working Conditions in the Sports Shoe Industry in

China). Another rights group characterized its report

criticizing Nike’s operations in Indonesia as “‘a case study of

the industry as a whole.” Jd. at 242 (Exh. X, Community

Aid Abroad, Briefing Paper, Sweating for Nike: Labour

Conditions in the Sports Shoe Industry). See also id. at 127

(Exh. E, Vietnam Labor Watch report); id. at 232 (Exh. W,

Boycott Nike, Fact Sheet).

LL ea ea ta et —

7

The news media have also treated the issue as one of

public concem. A CBS “48 Hours” broadcast featured

Nike’s operations in Vietnam as exemplifying attempts by

multinational corporations to exploit “cheap labor” overseas.

“The signs are everywhere,” the correspondent intoned, “of

an American invasion in search of cheap labor. Millions of

people who are literate, disciplined and desperate for jobs.”

Id. at 131 (Exh. F). Nike’s labor practices have also been

the subject of a front-page story in The New York Times, see

id. at 144 (Exh. H, Steven Greenhouse, Nike Shoe Plant in

Vietnam Is Called Unsafe for Workers), and the subject of a

columnist’s crusade, see id. at 146 (Bob Herbert, Nike’s

Boot Camps); id. at 147 (Bob Herbert, Brutality in Viet-

nam); id. at 148 (Bob Herbert, Trampled Dreams); id. at 149

(Bob Herbert, Nike's Bad Neighborhood); id. at 150 (Bob

Herbert, Nike’s Pyramid Scheme), and were cited in another

Times story as a case study of exploitation, see id. at 151

a A. Gargan, An Indonesian Asset Is Also a Liabil-

ity).

Content and Form. Nike’s own speech, responding to its

critics and various news media stories, addressed the same

public issue; and the channels through which the company

responded were the established channels of discussion and

debate on matters of public concern. The company

responded to questions from the news media, sent letters to

the editor and other interested parties, and issued press

releases and corporate policy statements. See, e.g., id. at

121 (Exh. D, letter to YWCA official); id. at 138-39

(Exh. F, answers to questions by CBS reporter); id. at 183

(Exh. P, media statement); id. at 187 (Exh. Q, letter to

critic); id. at 190 (Exh. R, letter to athletic directors); id. at

193 (Exh. S, letter to editor); id. at 198 (Exh. U, explanation

of Nike Code of Conduct); id. at 201 (Exh. V, Nike

Production Primer); id. at 265 (Exh. Y, remarks by CEO at

Shareholders’ meeting); id. at 270 (Exh. Z, press release,

Nike Responds to Sweatshop Allegations); id. at 285

8

(Exh. DD, letter to editor responding to critical op-ed article

by paper’s columnist); id. at 307 (Exh. FF, advertisement

announcing Young report’s conclusion); id. at 322 (Exh. Ii,

press release, Nike Addresses Concerns Regarding Women s

Issues and Highlights Leadership in Worker Initiatives). Cf.

New York Times, 376 U.S. at 266 (“The publication here

was not a ‘commercial’ in the sense in which the word was

used in Chrestensen.”).

In short, judged by its context, content, and form, Nike’s

speech addressed matters of public concern.

B. A Corporation’s Speech on Matters of Public Con-

cern Requires the Same “Breathing Space” as

Speech by Other Speakers.

A corporation’s speech on matters of public concern

requires “breathing space” for the same reason that such

speech by other speakers requires “breathing space, and

because any other rule would violate the principles of

speaker equality and viewpoint neutrality.

1. The Court has recognized that “the erroneous statement

of fact is not worthy of constitutional protection” but “Is

nevertheless inevitable in free debate,” and that “punishment

of error runs the risk of inducing a cautious and restrictive

exercise of the constitutionally guaranteed freedoms of

speech and press.” Gertz, 418 U.S. at 340. Thus, to provide

the necessary “breathing space” for speech on matters of

public concern, “the Court has been willing to insulate even

demonstrably false speech from liability, and has imposed

additional requirements of fault upon the plaintiff in a suit

for defamation,” Philadelphia Newspapers, 475 U.S. at 778.

This recognition that the First Amendment requires

“breathing space” in discussion of public issues 1s not a

special rule created for libel and defamation actions. The

safeguards established by the Court in such actions simply

apply the more general principle that “the government

9

cannot limit speech protected by the First Amendment

without bearing the burden of showing that its restriction is

justified.” “Jd. at 777 (citing Consol. Edison Co. v. Pub.

Serv. Comm'n, 447 U.S. 530, 540 (1980); First Nat'l Bank,

435 U.S. at 786; Renton v. Playtime Theaters, Inc., 475 U.S.

41, 47-54 (1986)). As the Court has stated:

[T]he need to encourage debate on public issues that

concemed the Court in the governmental-restriction

cases is of concern in a similar manner in this case

involving a private suit for damages: placement by

state law of the burden of proving truth upon media

defendants who publish speech of public concern

deters such speech because of the fear that liability

will unjustifiably result... . Because such a “chilling”

effect would be antithetical to the First Amendment’s

protection of speech on matters of public concern, we

believe that a private-figure plaintiff must bear the

burden of showing that the speech at issue is false

before recovering damages for defamation from a

media defendant. To do otherwise could “only result

in a deterrence of speech which the Constitution makes

free.”

Philadelphia Newspapers, 475 U.S. at 777 (quoting Speiser

v. Randall, 357 U.S. 513, 526 (1958)).

The “breathing space” afforded speech on matters of

public concern is required for speech by corporate speakers

no less than for other speakers, even when the speech

concems their own practices, operations, and products. Like

any other speaker, a corporation may be expected to make

only those statements of fact that it believes to be true. But

whether a particular statement of fact is “true” is often a

matter of legitimate dispute. Often there are two sides to a

story: a corporation’s critics may credit one account, the

corporation may credit another. Whether a statement of fact

is considered to be “true” may also depend on a host of

10

other factors—for example, the subsidiary facts that one

considers to be relevant; how one defines one’s terms; what

point or frame of reference one uses; whether a statement

can be “true” if it is generally true even though counterex-

amples may exist, or is true as far as it goes even though it

does not include facts that someone considers relevant.

Moreover, whether a statement is really a statement of fact

or instead a statement of opinion, or possibly a figure of

speech, may be an issue. Each of the factual “misrepresen-

tations” that Respondent attributes to Nike fall into one or

more of these categories.’

The point is not that the “truth” of factual statements on

matters of public concern is always unknowable. The point

is that agreement on whether a statement is “true” is not

2 The first and second causes of action asserted by Respondent

attribute seven “misrepresentations” to Nike. (See First Amended

Complaint {] 75, 79.) These specified “misrepresentations” are

not actually statements alleged to have been made by Nike but

Respondent’s characterization of Nike’s positions on various

issues. Four of the seven do not involve statements of fact: two

state legal conclusions—that Nike’s products are made in

accordance with applicable laws and regulations (id. 4] 75(b), (c);

79(b), (c)), and two state opinions—that a particular report

“proves that NIKE is doing a good job and operating morally” (id.

{9 75(f); 79(f)) and that “NIKE guarantees a ‘living wage’ for all

workers who make NIKE products” (id. | 75(g), 79(g)). The

other three are broad statements that raise one or more of the

issues described in text above. Moreover, to decide whether

Respondent’s allegations with respect to Nike’s operations and

practices were true—the predicate for deciding whether Nike’s

responses were themselves false—a court would have to

determine myriad factual issues concerning events that allegedly

occurred half-way around the world. It is difficult to imagine

how any court could manage the issues of proof involved in

placing a company’s worldwide operations and practices on trial.

1]

inevitable and often entails a series of choices made in good

faith by speakers as well as listeners. The First Amendment

itself affords speakers persuasive license in expressing what

they regard to be the truth, see New York Times, 376 US. at

271-73—license that critics of corporate operations and

practices are not characteristically shy about using. Even

assuming that a corporate speaker like Nike could fairly be

presumed to know everything that has ever happened at each

of the 736 facilities located in the 51 countries in which

500,000 workers are used by its subcontractors to manufac-

ture its products (Pet. 2), the notion that the company would

be able to make factual statements that someone could not

assert to be false or misleading in an action under Cal. Bus.

& Prof. Code § 17200 et seg. and § 17500 et seg., based on

the considerations identified above, is fanciful.

It is therefore no answer to say, as the California Su-

preme Court said, that the “profit motive” (Pet. 12a), or

greater “access to the truth” (id.), will prevent corporate

speech on matters of public concern from being “chilled” if

corporations are denied the “breathing space” afforded other

speakers when addressing matters of public concern. As the

Court stated in New York Times, 376 U.S. at 279:

Even courts accepting [the defense of truth] as an

adequate safeguard have recognized the difficulties of

adducing legal proofs that the alleged libel was true in

all its factual particulars. . .. Under such a rule, would-

be cnitics of official conduct may be deterred from

voicing their criticism, even though it is believed to be

true and even though it is in fact true, because of doubt

whether it can be proved in court or fear of the ex-

pense of having to do so. They tend to make only

Statements which “steer far wider of the unlawful

zone.” Speiser, 357 U.S. at 526. The rule thus damp-

ens the vigor and limits the variety of public debate. It

12

is inconsistent with the First and Fourteenth Amend-

ments.

If a corporate speaker must limit its factual statements on

matters of public concern to statements that no one could

possibly challenge, or that the speaker could be certain it

could prove as “true” in a court of law or before a regulatory

body, the result will be “a deterrence of speech which the

Constitution makes free.” Speiser, 357 U.S. at 526. See

also Hustler Magazine v. Falwell, 485 U.S. 46, 52 (1988);

Rosenbloom v. Metromedia, Inc., 403 U.S. 29, 50, 52-53

(1971) (plurality opinion); cf. First National Bank, 435 US.

at 785 n.21 (noting chilling effect of statute prohibiting

corporate speech on ballot measures except on subjects

“materially affecting” a corporation’s business or property).

2. Denying corporate speech on matters of public concern

the same “breathing space” as speech by other speakers

would violate the principles of speaker equality and

viewpoint neutrality.

In First National Bank, 435 U.S. 765, the Court rejected

the proposition that the value of speech can be made to

depend on the identity of the speaker: “The inherent worth

of ... 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.” /d.

at 777; see also id. at 784-85 (“In the realm of protected

speech, the legislature is constitutionally disqualified from

dictating the subjects about which persons may speak and

the speakers who may address a public issue.”); Pacific Gas

& Elec. v. Pub. Util. Comm'n, 475 U.S. 1, 8 (1986)

(“critical considerations” are not the speaker’s identity but

“that the State [seeks] to abridge speech that the First

Amendment protects, and that such prohibitions limit[ } the

range of information to which the public is exposed”).

13

The Court in First National Bank thereby applied in the

context of corporate speech one of the most fundamental

principles of First Amendment jurisprudence, the principle

of speaker neutrality. Simply stated, “government regula-

tion may not favor one speaker over another.” Rosenberger

v. Rector & Visitors of the Univ. of Va., 515 U.S. 819, 828

(1995). See also Greater New Orleans Broad. Ass'n v.

United States, 527 U.S. 173, 193-94 (1999); Simon &

Schuster, Inc. v. Members of the N.Y. State Crime Victims

Bd., 502 U.S. 105, 117 (1991); Consol. Edison, 447 US. at

533-34; Carey, 447 U.S. at 459-63; Police Dep't of Chicago

v. Mosley, 408 U.S. 92, 96 (1972) (“[W]e have frequently

condemned ... discrimination among different users of the

same medium for expression.”); Wieman v. Updegraf, 344

U.S. 183, 193 (1952) (Black, J., concurring) (“We must

have freedom of speech for all or we will in the long run

have it for none but the cringing and craven.”).

A rule denying corporate speech on matters of public

concern “breathing space” would violate this principle of

speaker neutrality, and “[t]he effect would be to shackle the

First Amendment in its attempt to secure ‘the widest

possible dissemination of information from diverse and

antagonistic sources.””” New York Times, 376 U.S. at 266

a Associated Press v. United States, 326 U.S. 1, 20

The Court has also stated that “the First Amendment

forbids the government to regulate speech in ways that favor

some viewpoints or ideas at the expense of others.”

Members of the City Council of Los Angeles v. Taxpayers

for Vincent, 466 U.S. 789, 804 (1984). Indeed, “{tJhe

principle of viewpoint neutrality ... underlies the First

Amendment.” Bose Corp. v. Consumers Union of United

States, Inc., 466 U.S. 485, 505 (1984). “Discrimination

against speech because of its message is presumed to be

unconstitutional.” Rosenberger, 515 U.S. at 828 (citing

14

Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622, 641-43

(1994)).

In the realm of speech and expression, the First

Amendment envisions the citizen shaping the gov-

ernment, not the reverse; it removes “governmental

restraints from the arena of public discussion, putting

the decision as to what views shall be voiced largely

into the hands of each of us, in the hope that use of

such freedom will ultimately produce a more capable

citizenry and more perfect polity.”

Denver Area Telecom. Consortium, Inc. v. FCC, 518 US.

727, 782-83 (1996) (Kennedy and Ginsburg, JJ., concurring

in part, concurring in the judgment in part, and dissenting in

part) (quoting Cohen v. California, 403 U.S. 15, 24 (1971)).

See also Lamb's Chapel v. Ctr. Moriches Union Free Sch.

Dist., 508 U.S. 384, 393-94 (1993); Leathers v. Medlock,

499 U.S. 439 (1991); Pacific Gas, 475 U.S. at 11-12;

Consol. Edison, 447 U.S. at 537.

The ibition against viewpoint discrimination pre-

cludes = under which a corporate speaker's critics, but

not the corporate speaker, is afforded “breathing space’ in

speech addressing matters of public concern. For the rule

“license[s] one side of a debate to fight freestyle, while

requiring the other to follow Marquis of Queensberry rules.

R.A.V. v. City of St. Paul, 505 U.S. 377, 392 (1992). When

the government thus limits the means by which a corpora-

tion may “participate in the public debate on .. - controver-

sial issues of national interest and importance, it favors

speech of the corporation’s critics and thereby “strikes at the

heart of the freedom to speak.” Consol. Edison, 447 U.S. at

535.

15

C. The Governmental Interest that Justifies Commer-

cial Speech Regulation Does Not Justify Such

Regulation of Corporate Speech on Matters of

Public Concern.

A corporation’s speech cannot both address matters of

public concern and yet be regulable as “commercial

speech.” If the speech addresses matters of public concern,

it is entitled to the highest level of First Amendment

protection and must be afforded “breathing space.” But if

the speech is regulable as “commercial speech,” the

government may intervene on an adequate record to ensure

its truthfulness, apply a “strict liability” regime, and impose

other forms of regulation—including prescreening and

affirmative disclosure requirements, see Va. State Bd of

Pharm. v. Va. Citizens Consumer Council, Inc., 425 US.

748, 771-72 n.12 (1976)}—that are not tolerated in the realm

of fully protected speech. Speech on matters of public

concern cannot be made subject to such a regime because

such speech does not threaten the type of “commercial

harms” that justify that regime in the realm of commercial

speech.

Notwithstanding the indefiniteness of Bolger, the Court

has made clear that “commercial speech” is not merely

economically motivated speech, but “speech proposing a

commercial transaction.”° Although “speech proposing a

’ The Court has stated that commercial speech is speech that

informs consumers about “who is producing and selling what

product, for what reason, and at what price,” 44 Liguormart, Inc.

v. Rhode Island, 517 U.S. 484, 496 (1996) (opinion of Stevens, J.,

joined by Kennedy, Souter & Ginsburg, JJ.) (quoting Va. State

Bd. of Pharm., 425 U.S. at 765), “a communication that does no

more than propose a commercial transaction,” Thompson v. W.

States Med. Ctr., 122 S. Ct. 1497, 1503 (2002) (quoting Edenfield

v. Fane, 507 U.S. 761, 767 (1993)); see also Lorillard Tobacco

(continued)

16

commercial transaction” receives “lesser protection than

other constitutionally guaranteed expression,” City of

Cincinnati v. Discovery Network, Inc., 507 U.S. 410, 422

(1993), this is not because such speech is less important or

less valuable than other protected expression. — On the

contrary, 2s the Court has recognized, a consumer's interest

in the free flow of commercial information “may be as keen,

if not keener by far, than his interest in the day’s most

urgent political debate,” Thompson v. W. States Med. Crtr.,

122 S.Ct. 1497, 1503 (2002) (quoting Va. State Bd. of

Pharm., 425 U.S. at 763), and the free flow of commercial

information is “indispensable to the proper allocation of

resources in a free enterprise system [and] ... to the

formation of intelligent opinions as to how that system

ought to be regulated or altered,” Va. State Bd. of Pharm.,

425 U.S. at 765. See also Florida Bar v. Went For It, Inc.,

Co. v. Reilly, 533 U.S. 525, 554 (2001) (Commercial speech is

“speech proposing a commercial transaction.”) (quoting Cent.

Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n, 447 U.S. 557

(1980)); United States v. United Foods, Inc., 533 U.S. 405, 409

(2001) (“[C]ommercial speech [is] usually defined as speech that

does no more than propose a commercial transaction.”); City of

Cincinnati v. Discovery Network, Inc., 507 U.S. 410, 423 (1993)

(“{P]roposal of a commercial transaction [is] ‘the test’ for

identifying commercial speech.”) (quoting Bd. of Trustees v. Fox,

492 U.S. 469, 473-74 (1989)). This is the type of expression— I

will sell you the X prescription drug at the Y price”—for which

the commercial speech doctrine was devised. Va. State Bd. of

Pharm., 425 U.S. at 761; see also Bates v. State Bar, 433 US.

350, 364 (1977) (Commercial speech “inform[s] the public of the

availability, nature, and prices of products and services.”); 44

Liquormart, 517 U.S. at 496 (opinion of Stevens, J, joined by

Kennedy, Souter & Ginsburg, JJ.) (“[A]}dvertising provides

consumers with accurate information about the availability of

goods and services.”’).

——

17

515 U.S. 618, 636 (1995) (Kennedy, J., joined by Stevens,

Souter & Ginsburg, J!., dissenting) (“The complex nature of

expression is one reason why even so-called commercial

speech has become an essential part of the public discourse

the First Amendment secures.”). Even if the Court had not

recognized the importance and value of commercial speech,

the government could not treat such speech as less worthy

than other protected expression, for “the general rule is that

the speaker and the audience, not the government, assess the

value of the information presented.” W. States, 122 S. Ct. at

1503 (quoting Edenfield v. Fane, 501 U.S. 761, 767

(1993)).

What justifies greater regulation of commercial speech

than of other protected expression is not the lesser value of

this speech but the government’s interest in preventing

“commercial harms.” See Discovery Network, 507 U.S. at

426. “It is the State’s interest in protecting consumers from

‘commercial harms’ that provides ‘the typical reason why

commercial speech can be subject to greater governmental

regulation than noncommercial speech.” 44 Liguormart,

4

The Court’s statement that commercial speech occupies a

“subordinate position in the scale of First Amendment values,”

e.g., Went For It, 515 U.S. at 623 (citation omitted), is difficult to

reconcile with the Court’s other statements affirming the

importance and value of such speech and the rule against

governmental determinations regarding the worth of speech, see

Lorillard, 533 U.S. at 575 (Thomas, J. concurring in part and

concurring in judgment) (reiterating view that “there is no

‘philosophical or historical basis for asserting that “commercial”

speech is of “lower value” than “noncommercial” speech’”)

(citation omitted); 44 Liquormart, 517 U.S. at 522 (Thomas, J.,

concurring in part and concurring in judgment) (observing that

Court’s references to the “subordinate position” of commercial

speech have been “without clear rationale”).

18

Inc. v. Rhode Island, 517 U.S. 484, 502 (1996) (opinion of

Stevens, J.) (quoting Discovery Network, 507 U.S. at 426).°

Such “commercial harms” are threatened when a seller

makes false or misleading claims about a product or service,

or the terms on which it is offered for sale, in a communica-

tion proposing a sale. The resulting injury can be severe and

unavoidable: “Investors may lose their savings, and

consumers may purchase products that are more dangerous

than they believe or that do not work as advertised.” Rubin

v. Coors Brewing Co., 514 U.S. 476, 496 (1995) (Stevens,

J., concurring in judgment). In discussing these harms,

Justice Stevens has noted the “immediate harmful impact”

that a false product claim can cause when made at point of

sale, where consumers “may respond to the falsehood before

there is time for more speech and considered reflection to

minimize the risks of being misled.” Jd. See Ohralik v.

Ohio State Bar Ass'n, 436 U.S. 447, 457 n.13 (1978) (“The

immediacy of a particular communication and the immi-

nence of harm are factors that have made certain communi-

cations less protected than others.”). It is the government’s

interest in preventing false or misleading claims threatening

such injuries, in communications proposing a sale, that

justifies special leeway in the regulation of commercial

speech.°

5 See also Lorillard, 533 U.S. at 576 (Thomas, J. concurring in

part and concurring in judgment) (government’s leeway in

regulating commercial speech “is limited to the peculiarly

commercial harms that commercial speech can threaten—i.e., the

risk of deceptive or misleading advertising”); Bolger, 463 U.S. at

81 (Stevens, J., concurring in judgment) (“The interest in

protecting consumers from commercial harm justifies a require-

ment that advertising be truthful . . . .”).

® The Court has also held that particularly oppressive modes of

solicitation can be a source of “commercial harm.” See Ohralik,

(continued)

19

Only when a corporation’s statements are presented as a

part of a corporation’s selling message in a product adver-

tisement or on a product label can the government’s interest

in preventing “commercial harms” arguably justify a degree

of regulation not permitted for speech by other speakers. By

contrast, when presented in established channels of public

discussion and debate, such as those used by Nike here, a

corporate . speaker’s statements on matters of public

concern—including Statements concerning the qualities or

characteristics of a product, or the impacts of the company’s

business operations or practices—should receive the same

level of First Amendment protection as statements concern-

ing such matters by other speakers. Society’s interest in

‘uninhibited, robust, and wide-open” debate on matters of

public concern, New York Times, 376 U.S. at 270, and the

Principles of viewpoint neutrality and speaker equality

require no less. See supra pp. 12-14.’

436 U.S. at 447 (in-person solicitation); Went For It, 515 US

618 (targeted direct-mail solicitation); see also Shapero v. Ky.

Bar Ass'n, 486 U.S. 466, 474-77 (1988); Zauderer v. Office of

Disciplinary Counsel, 471 U.S. 626, 641-42 (1985). In several

Cases, the Court has appeared to accept the legitimacy of

regulating commercial speech for purposes other than preventing

such commercial harms” (i.e., those threatened by false or

misleading advertising or particularly oppressive modes of

solicitation). But in only one case since Virginia Board has the

Court upheld a commercial speech restriction that was not

Justified to prevent such harms. The Court upheld such a

restriction in Posadas de Puerto Rico Associates v. Tourism Co

478 U.S. 328 (1986), on the basis of a paternalistic rationale tha;

it has since repudiated. See W. States, 122 S. Ct. at 1507-08: 44

Liquormart, 517 U.S. at 510 (opinion of Stevens, J.); id. at 518

(Thomas, J., concurring in judgment).

7

| To the extent that a “selling message” is deemed to be implicit

in whatever a corporation may say On matters of public concern,

(continued)

20

As discussed, Nike’s speech was core First Amendment

speech addressing matters of public concem. The only

“harm” that the company’s claims could be said to threaten

if those claims were determined to be “false’ (but see supra

pp. 9-11) would be that some consumers might have been

led to view the company more favorably than they might

otherwise have viewed it and, as a result, might have

decided to purchase the company’s products when they

otherwise might not have done so.” This ‘harm’ will result,

moreover, only if these consumers are not dissuaded by

further speech by the company’s critics. The a

for response available to a corporation s critics when =

corporation speaks through established channels of pub ic

discussion and debate disables the government from placing

special restrictions on the corporation’s speech. In such a

circumstance, the admonition that “the fitting remedy for

evil counsels is good ones” (Whitney v. California, 274 US.

357, 375 (1927) (Brandeis, J., concurring)) applies. See

Ohralik, 436 U.S. at 457. “Only the emergency that makes

it immediately dangerous to leave the correction of evil

counsels to time warrants making any exception to the [First

Amendment].” Abrams v. United States, 250 U.S. 616, 630-

31 (1919) (Holmes, J. dissenting).

even in established channels of policy and political discussion and

debate, that commercial aspect is “inextricably intertwined oer

the corporation’s “fully protected speech” and thus -~ a

the speech must be classified as noncommercial. Riley v. Na

Fed'n of the Blind, Inc., 487 U.S. 781, 796 (1988).

® Cf. Lorillard, 533 U.S. at 580 (Thomas, J., concurring in part

and concurring in judgment) (rejecting argument “that an ee

solicitation is enough to empower the State to regulate speec “y

(citing Gitlow v. New York, 268 U.S. 652, 673 (1925) (Holmes, J.,

dissenting) (“Every idea is an incitement . . . .”)).

21

In sum, any “harm” from a company’s speech on matters

of public concern is not so severe or unavoidable, or the

countervailing First Amendment interest in providing

“breathing space” so slight, as to justify subjecting such

speech to the regime of regulation applicable to commercial

speech. ° Applying the commercial speech regime to a

corporation’s statements on matters of public concern would

drastically curtail valuable speech on vital issues of the day.

“Society as a whole then would be the loser.” Sec y of State

of Md. v. Joseph H. Munson Co., 467 US. 947, 956 (1984).

Il. UNDER ASARCO, A PARTY IN NIKE’S POSITION

HAS STANDING TO INVOKE THE AUTHORITY

OF THIS COURT.

A. Nike Satisfies the Article III Requirements for

Standing.

A party has standing to invoke the authority of a federal

court under Article II] if the party can show injury-in-fact,

causation, and redressability. Vt. Agency of Natural Res. v.

United States ex rel. Stevens, 529 US. 765, 771 (2000). A

party in Nike’s position satisfies these requirements.

This Court has long recognized its Article III jurisdiction

in the circumstances presented here:

When a state supreme court denies the existence of a

federal right and rests its decision on that basis, this

Court unquestionably has jurisdiction to review the

federal issue decided by the state court. To suggest

° That such “harm” is insufficient to justify special regulatory

leeway is confirmed by the fact that the commercial speech

regime is not, and would never be, applied to those whose “false”

Statements of -fact on matters of public concern discourage

consumers from purchasing a company’s products, even though

the “harm” would be the same.

22

otherwise would contradict principles laid down in the

Judiciary Act of 1789 ... and settled since Martin v.

Hunter's Lessee[.|

Quinn v. Millsap, 491 U.S. 95, 104 (1989); see also, e.g.,

Nashville, C. & St. L. Ry. v. Wallace, 288 U.S. 249, 262

(1933) (finding Article III jurisdiction where, as here,

“valuable legal rights asserted by the complainant and

threatened with imminent invasion by appellees, will be

directly affected to a specific and substantial degree by the

[federal court’s] decision of the question of law,” and “[t}he

relief sought is a definitive adjudication of the disputed

constitutional right of the appellant, in the circumstances

alleged, to be free from the [state law]”).

A corporation like Nike has an interest, protected by the

First Amendment, in speaking on matters of public concern.

See, e.g., Consol. Edison, 447 U.S. at 530 (advocacy of

nuclear power); First Nat'l Bank, 435 U.S. at 765 (opposi-

tion to tax initiative); Thomas v. Collins, 323 U.S. 516

(1945) (union solicitation); Thornhill v. Alabama, 310 U.S.

88 (1940) (labor picketing); cf. Pacific Gas, 475 US. 1

(plurality opinion). That First Amendment interest is

threatened by the two California statutes construed by the

California Supreme Court in this case, under which Nike

may now be subject to civil and criminal liability for

engaging in such speech.'°

'° The California Supreme Court’s judgment operates as a

definitive construction of state law, which “fixes the meaning of

the statute,” Winters v. New York, 333 U.S. 507, 514 (1948), and

puts “words in the statute as definitively as if it had been so

amended by the legislature,” Wainwright v. Stone, 414 U.S. 21,

23 (1973) (per curiam) (quoting Winters, 333 U.S. at 514). Its

judgment constitutes “the words of the statute.” Button, 371 U.S.

at 432.

23

The California statutes cause Nike injury-in-fact by

forcing the company to defend its past speech in an ongoing

lawsuit that the First Amendment forbids, and by chilling

the company’s future speech through the threat of more such

forbidden lawsuits. The threat of liability for engaging in

protected speech constitutes both actual and threatened

injury sufficiently distinct and palpable to support federal

court standing. A decision by this Court invalidating the

California statutes as so construed would redress this injury.

This Court has “avoided making vindication of freedom

of expression await the outcome of protracted litigation.”

Dombrowski v. Pfister, 380 U.S. 479, 487 (1965). “The

chilling effect upon the exercise of First Amendment rights

may derive from the fact of the prosecution, unaffected by

the prospects of its success or failure.” Jd. Moreover, the

Court has repeatedly recognized that the threat of litigation

constitutes a cognizable injury in the First Amendment

context:

It is not simply the possibility of a judgment for dam-

ages that results in self-censorship. The very possibil-

ity of having to engage in litigation, an expensive and

protracted process, is threat enough to cause discussion

and debate to “steer far wider of the unlawful zone”

thereby keeping protected discussion from public

cognizance.

Rosenbloom, 403 U.S. at 52-53 (plurality opinion) (quoting

Speiser, 357 U.S. at 526 (1958)); see also, e.g., Gooding v.

Wilson, 405 U.S. 518, 521 (1972) (“{P]ersons whose

expression is constitutionally protected may well refrain

from exercising their rights for fear of criminal sanctions

provided by a statute susceptible of application to protected

expression.”); Smith v. California, 361 U.S. 147, 150-52

(1959) (recognizing chilling effect of strict-liability rules on

speech). The very existence of a statute that “does not aim

specifically at evils within the allowable area of State

24

control but, on the contrary, sweeps within its ambit other

activities that in ordinary circumstances constitute an

exercise of freedom of speech... . results in a continuous

and pervasive restraint on all freedom of discussion that

might reasonably be regarded as within its purview.”

Thornhill, 310 U.S. at 97-98; see also id. at 97 (“It is not

merely the sporadic abuse of power ... but the pervasive

threat inherent in its very existence that constitutes the

danger to freedom of discussion.”).

The chilling effect of the California court’s decision

exists now and “each passing day may constitute a separate

and cognizable infringement of the First Amendment,”

Nebraska Press Assoc. v. Stuart, 423 U.S. 1327, 1329

(1975) (opinion of Blackmun, J.) (in chambers), sufficient to

give rise to an injury in fact. See also Nebraska Press

Assoc. v. Stuart, 423 U.S. 1319, 1325 (1975) (opinion of

Blackmun, J.) (in chambers) (delaying review “would

constitute and aggravate a deprival of ... [First Amend-

ment] rights, if any, that the [petitioners] possess and may

properly assert”). As the Court has recognized:

[where] uncertainty of the constitutional validity of [a

state statute] restricts the present exercise of First

Amendment rights. . . . it would be intolerable to leave

unanswered ... an important question ... under the

First Amendment; an uneasy and unsettled constitu-

tional posture of [the challenged state statute] could

only further harm the operation of a free press.

Miami Herald Publ’g Co. v. Tornillo, 418 U.S. 241, 247 n.6

(1974).

B. ASARCO Confirms the Standing of a Party in

Nike’s Position.

Under ASARCO, 490 U.S. 605, a party in Nike’s position

has standing to invoke the authority of this Court. Like the

petitioners in ASARCO, Nike seeks invalidation of a state

25

supreme court’s decision on a federal question, in a case in

which petitioners were the original defendants, and in which

the state courts took no account of Article III standing rules

as applied to the respondent. Like the judgment of the

Arizona Supreme Court in ASARCO, the judgment of the

California Supreme Court here “causes concrete injury to

the parties who seek now for the first time to invoke the

authority of the federal courts in the case.” Jd. at 612. See

Robert L. Stern et al., Supreme Court Practice § 18.1, at 814

(8th ed. 2002) (“[A] party who seeks entry into the federal

court system for the first time must be able to satisfy the

Article III standing requirements at that point.”) (citing

ASARCO) (emphasis added); Richard H. Fallon et al., Hart

and Wechsler’s The Federal Courts and the Federal System

155-56 (4th ed. 1996) (same).

In ASARCO, plaintiffs (individual taxpayers and an

educational association) obtained a declaration from a state

supreme court that a state law governing mineral leases was

void under federal law. 490 U.S. at 610. The state court

“took no account” of the plaintiffs’ “federal standing.” Jd.

at 617. This Court concluded, however, that the petition-

ers—defendants in the state court action—had standing to

challenge the state supreme court’s judgment in this Court,

because they alleged a “specific injury stemming from the

state-court decree, a decree which rests on principles of

federal law.” Jd. Noting that “it is petitioners, the defen-

dants in the case and the losing parties below, who bring the

case here and thus seek entry to the federal courts for the

first time in the lawsuit,” the Court held that “petitioners

have standing ... and that this dispute now presents a

justiciable case or controversy.” Jd. at 618.

The petitioners in ASARCO contended that (1) “the

[state] Supreme Court’s decision rest{[ed] on an erroneous

interpretation of federal” law, (2) the judgment “secured by

respondents, along with the relief that may flow from that

26

ruling, [was] invalid under federal law,” and (3) if this Court

were to agree with petitioners, “reversal of the decision

below would remove its disabling effects upon them.” /d. at

618-19. The Court in ASARCO cited these circumstances as

sufficient to “meet each prong of the constitutional standing

requirements.” Jd. at 619. The same circumstances are

present here. In light of the direct and immediate injury to

Nike caused by the California court’s judgment, particularly

its chilling effect on core First Amendment speech, the

Court will be deciding the questions presented not “in the

rarified atmosphere of a debating society,” Valley Forge

Christian Coll. v. Ams. United for Separation of Church &

State, Inc., 454 U.S. 464, 472 (1982), but in the crucible of

an Article III case or controversy.

A federal court unquestionably would have had Article

III jurisdiction to entertain a declaratory judgment action

seeking invalidation of the California statutes, if the statutes

had been enacted as the California Supreme Court has

construed them. See 28 U.S.C. § 2201; 42 U.S.C. § 1983;

see, e.g., Steffel v. Thompson, 415 U.S. 452, 458-59, 475

(1974) (threat of enforcement sufficient under Article III to

permit petitioner’s challenge to state law allegedly conflict-

ing with First Amendment); Wooley v. Maynard, 430 U.S.

705, 709-10 (1977) (where threat of enforcement exists,

petitioner may seek federal court declaration that state

statute violates First Amendment rights). But for the

Rooker-Feldman doctrine, a party in Nike’s position could

challenge the California statutes in a federal declaratory

judgment action even now. See ASARCO, 490 U.S. at 622-

23 (doctrine bars direct review in lower federal courts of a

decision reached by the highest state court). The fact that a

federal district court would have jurisdiction to hear such a

challenge confirms that Nike may assert its First Amend-

ment challenge here. But because the Rooker-Feldman

doctrine would bar Nike from bringing such an action, and

27

because the California court’s judgment causes Nike present

injury, Nike’s only federal remedy is in this Court.

CONCLUSION

The judgment of the California Supreme Court should be

reversed.

Respectfully submitted,

David H. Remes

Counsel of Record

Covington & Burling

1201 Pennsylvania Avenue, N.W.

Washington, D.C. 20004-2401

(202) 662-5212

Attorney for Amici Curiae

February 28, 2003