Amicus Curiae Brief — Nike, Inc. v. Kasky
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No. 02-575 | FEB 28 2005
In The
Supreme Court of the Anited States
SJ
NIKE, INC., et ai.,
Petitioners,
MARC KASKY,
Respondent.
On Writ Of Certiorari
To The Supreme Court Of California
¢
BRIEF OF AMICUS CURIAE PRODUCT
LIABILITY ADVISORY COUNCIL, INC.
IN SUPPORT OF PETITIONERS
Of Counsel: STEVEN G. Bropy*
HUGH F. YOUNG, JR. JEANETTE M. VIGGIANO
PRODUCT LIABILITY ADVISORY KING & SPALDING LLP
COUNCIL, INC. 1185 Avenue of the
1850 Centennial Park Drive Americas
Suite 510 New York, NY 10036
Reston, VA 20191 (212) 556-2100
(103) 304-S500 *Counsel of Record
COCKLE LAW BRIEF PRINTING CO. (800) 225-6964
OR CALL COLLECT (402) 342-2831
TABLE OF CONTENTS
Page
STATEMENT OF INTEREST...................ccessecssseeeeees 1
SUMMARY OF ARGUMENT....................ccceeeeeseeeeeeee 2
SP IIITTET cthensecincnsuidainieiusindanniiiienieseiandieseseseneesente 5
I. THIS COURT SHOULD REITERATE AND
II.
REINFORCE ITS DEFINITION OF COM-
MERCIAL SPEECH AS “SPEECH THAT
DOES NO MORE THAN PROPOSE A COM-
MERCIAL TRANSACTION?” ...........cccccceseeeeeees
A. Precedent Supports Continued Use of the
“No More Than” Definition, and Provides
No Justification for the California Court’s
ERE re ae eo ne
B. The “No More Than” Definition Serves the
Underlying Purpose of the Commercial
I isis nciaci ttn aiaiiaiitansionesines
C. The “No More Than” Definition Properly
Excludes Speech that Is Part of a Public
Discussion or Debate ..................:scceeeeeeeeee
D. Reaffirmation of the “No More Than”
Definition Will Not Unduly Restrict Gov-
ernment’s Regulation of Health and Safety
iis eceeetnnielindenaaadiasineniinos
THE CALIFORNIA COURT'S DECISION, IF
UPHELD, WILL PROVIDE AN UNACCEPT-
ABLE BOON TO THE PLAINTIFFS’ BAR ......
A. The Decision Below Creates a New Cate-
gory of Lucrative Lawsuits that Primarily
Will Benefit Plaintiffs’ Lawyers.................
12
14
ii
TABLE OF CONTENTS - Continued
Page
B. The Decision Below Encourages the Plain-
tiffs’ Bar to Increase Its Use of the Media
to Influence the Outcome of Litigation ...... 17
1. Examples of Prior Use of the Media by
the Plaintiffs’ Bar to Influence Litiga-
CBSED ...ccoccccescossccecescosesennsussnennneeeenanl 18
a. “Sudden Unintended Acceleration”
bay Ami Cag 8 ...cccoscccoccescscecscsnossosste 18
b. Silicone Breast Implants.............. 20
C. NMeapbawnd...cocccccosccscccsssccscsscosnesssenee 23
CONCLAJBIOIN 0..cccccscoccsesssccscsccssccssccnsscncnnnsensnnennn 25
iii
TABLE OF AUTHORITIES
Page
CASES:
44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484
SITTTIaTINT asc rcrcrrrdectnenennnennncnenenennennnnenccoesoess 8
In re Bridgestone/Firestone, Inc., 288 F.3d 1012
(7th Cir. 2002), cert. denied sub nom. Gustafson
v. Bridgestone/Firestone, Inc., 123 S.Ct. 870
ce ncecntnersnensnsnannnnnsonansensees 15
CPC Int'l, Inc. v. Skippy, Inc., 214 F.3d 456 (4th Cir.
aia ccenennensnnnnsssgnnnsnosensannneeect 6
City of Cincinnati v. Discovery Network, Inc., 507
a ces caeernnmmnonnsnneqeuess 5
Cohen v. California, 403 U.S. 15 (1971) ..............cccccccccceeees 9
Consol. Edison Co. of N.Y, Inc. v. Pub. Serv.
Comm’n of N.Y., 447 U.S. 530 (1980).................c000000 9,11
First Nat'l Bank of Boston v. Bellotti, 435 U.S. 765
Teer rccrcecncceniineennsnentnccnneneseecsoceets 11
Goldberg v. Cablevision Sys. Corp., 261 F.3d 318
CC EE 6
Kasky v. Nike, Inc., 27 Cal. 4th 939 (Cal. 2002)............... 6,7
Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894 (9th
relic cnntecennnennnenensueusnscsssensesseees 5
NAACP v. Button, 371 U.S. 415 (1963) ..........0.c. 10, 11
New York Times Co. v. Sullivan, 376 U.S. 254 (1964)........ 10
In re Norplant Contraceptive Prods. Liab. Litig.,
215 F. Supp. 2d 795 (E.D. Tex. 2002).................ccccceceeeee 24
Pac. Gas & Elec. Co. v. Pub. Utils. Comm’n of Cal.,
nrc ser rs enerensrennsncanens 10
iv
TABLE OF AUTHORITIES — Continued
Page
RAV. v. City of St. Paul, Minn., 505 U.S. 377
Ic cnchreheedaiaednertiaaectnatitea tala atari 8
S.0.C., Inc. v. County of Clark, 152 F.3d 1136,
amended by 160 F.3d 541 (9th Cir. 1998) ....................... 6
Thompson v. W. States Med Ctr., 535 U.S. 357, 122
I Nettie anette eee camara taal 5, 12
Thornhill v. Alabama, 310 U.S. 88 (1940)................ccccc000 10
U.S. West, Inc. v. FCC, 182 F.3d 1224 (10th Cir.
Ia icresesemsciencastesiteetetnarieetciteniticienebatletatlahatiaiialaendidiniammaaaediniaaidanial 6
United States v. United Foods, Inc., 533 U.S. 405
TIT cnrrsoeneisneeictenenssiaininilinininniiiedaiuatdemeabiainibiesinoeaiteedieianiaadl 5,12
Virginia State Bd. of Pharmacy v. Virginia Citizens
Consumer Council, Inc., 425 U.S. 748 (1976)........ 5, 8,14
Wood v. Wyeth-Ayerst Labs., 82 S.W.3d 849 (Ky.
cinched need iil ah ac ial al 15
Wooley v. Maynard, 430 U.S. 705 (1977) ..............ccccceeeeeees 13
STATUTES:
Cal. Bus. & Prof. Code § 17204 (West 2003) ..................... 16
Cal. Code of Civ. Proc. § 1021.5 (West 2003)..................... 17
MISCELLANEOUS:
A “Sleazy” Attack, Wall St. J. Eur., Feb. 19, 1997, at
10, available at 1997 WL-WSJE 3806723 ..................... 21
Ann Davis, Plaintiffs: We'll Junk “Junk Science”
Tag, Nat'l L.J., Dec. 2, 1996, at A6, available at
LEXIS, News Library, Papers File ............................00+. 21
TABLE OF AUTHORITIES — Continued
Bonner R. Cohen, Scaring Up Money with False
Attacks on Science, Knight Ridder/Trib. Bus.
News, Sept. 20, 2000, available at LEXIS, News
eee
Charles Ornstein, Norplant Company Agrees to
Settle Suits, Dallas Morning News, Aug. 26,
1999, available at LEXIS, News Library, Papers
David K. Martin, Truth Prevails Over “Junk Sci-
ence”, Chi. Trib., Sept. 2, 1998, at 25, available at
Gina Kolata, Panel Confirms No Major Illness Tied
to Implants, N.Y. Times, June 21, 1999, at Al,
available at 1999 WL 30483238 ..............ccccscseeeeeeees
Gina Kolata, Will the Lawyers Kill Off Norplant?,
N.Y. Times, May 28, 1995, § 3, at 1, available at
LEXIS, News Library, Northeast File .....................
James R. Healey & David Kiley, PR Company
Comes Up with 2 Campaigns Taking SUVs to
Task, USA Today, Jan. 24, 2003, at 3B, available
at LEXIS, News Library, Major Papers File ...........
Leslie Laurence, Your Perfect Birth Control ...
Blocked?, Glamour, Sept. 1999 ..............cccccccceeeeeeeees
Michael Fumento, A Confederacy of Boobs: How
Special Interests, Assorted Ideologues, and a Sen-
sationalist Press Torpedoed Breast Implants and
Now Threaten Other Medical Devices, Reason
Page
vi
TABLE OF AUTHORITIES — Continued
Michael Fumento, Dwindling Implant Returns,
Wash. Times, Dec. 28, 1998, at Al7, available at
gg eee 21
Michael Fumento, The FDA’s Panel Did Not Rec-
ommend the Ban of Silicone Breast Implants,
Wash. Times, Jan. 21, 1999, at A18, available at
gE 21
Peter W. Huber, Galileo’s Revenge: Junk Science in
the Courtroom (Basic Books 1991) ...............c.cccceeeeeeeeees 19
Peter W. Huber, Junk Science in the Courtroom,
Forbes, July 8, 1991, at 68, available at 1991 WL
Peter W. Huber, Manufacturing the Audi Scare,
Wall St. J., Dec. 18, 1989, available at 1989 WL-
i aicrincccintiiatiacetenaaiiaticaaiaticeicaaeeainlaieiataainieteetanls 19
Walter Olson, Jt Didn't Start with Dateline NBC,
Nat'l Review, June 21, 1993, available at http://
www. walterolson.com/articles/crashtests. htm] ............. 19
1
STATEMENT OF INTEREST"
The Product Liability Advisory Council, Inc. (“PLAC”)
is a non-profit association with 129 corporate members
representing a broad cross-section of American and
international product manufacturers. These companies
seek to contribute to the improvement and reform of law
in the United States and elsewhere, with emphasis on the
law governing the liability of manufacturers of products.
PLAC’s perspective is derived from the experiences of a
corporate membership that spans a diverse group of
industries in various facets of the manufacturing sector. In
addition, several hundred of the leading product liability
defense attorneys in the country are sustaining (non-
voting) members of PLAC. Since 1983, PLAC has filed
over 600 briefs as amicus curiae in both state and federal
courts, including this Court, to present the broad perspec-
tive of product manufacturers seeking fairness and bal-
ance in the application and development of the law,
particularly as it affects product liability A list of PLAC’s
corporate members is appended to this brief.
This case does not concern product liability law per se,
but nonetheless is of particular importance to PLAC’s
members. Like all large institutions, PLAC’s members
have critics (and supporters) both in the public and in the
press corps. The business of PLAC’s members frequently
becomes the focus of media attention. PLAC’s members
* No counsel for any party authored this brief in whole or in part,
and no person or entity, other than the amicus curiae, its members, or
its counsel, made a monetary contribution to the preparation or
submission of the brief. The written consent of the parties to the filing
of this brief has been filed with the Clerk of Court.
2
also from time to time are defendants in high-profile
lawsuits.
PLAC’s members must be able to respond to the
attacks made on them in the press and elsewhere. If those
responses could routinely give rise to lawsuits, much like
the lawsuit here, PLAC’s members would be deterred from
responding to public attacks, even when those attacks are
frivolous. Such chilling of corporate speech not only would
deprive PLAC’s members of their constitutional right to
speak in their own defense, but also would impoverish the
public debate on important issues.
¢
SUMMARY OF ARGUMENT
PLAC submits this brief for two purposes. First,
PLAC explains why the Court should adhere to its estab-
lished definition of commercial speech as “speech that does
no more than propose a commercial transaction.” (That
definition will be referred to herein as the “no more than”
definition.) Second, PLAC describes how the California
court’s decision, unless reversed, will be abused by the
plaintiffs’ bar. PLAC is uniquely qualified to present an
analysis relating to plaintiffs’ lawyers, as much of its work
during the past two decades has involved advocacy against
certain strategies and tactics used by the plaintiffs’ bar.
This case provides an opportunity for the Court to
reinforce its adherence to the “no more than” definition.
Plaintiff conceded below that, if Nike’s challenged state-
ments are not commercial speech, then his complaint
should be dismissed. Nike’s statements could not be
characterized as commercial speech under this Court’s “no
more than” definition. The Supreme Court of California,
3
however, disregarded that definition. Instead, it created a
new definition that expands the commercial speech cate-
gory to include virtually any statement that a company
makes about itself, its products or its services, regardless
of the venue in which the statement is made. This case
should be resolved by rejecting the California court’s
unprecedented definition, and by reaffirming the “no more
than” definition.
The “no more than” definition is broad enough so that
it serves the underlying purpose of the commercial speech
exception to general First Amendment principles. Com-
mercial speech receives less than full constitutional
protection because it is inextricably tied to commercial
transactions, an area traditionally subject to the police
power. Thus, it is perfectly logical that the commercial
speech exception should extend only to «peech that does no
more than propose a commercial transaction.
Further, the “no more than” definition is narrow
enough so as to not lead to inadvertent suppression of
speech deserving of full First Amendment protection. In
particular, that definition excludes speech that is part of
the public discourse. The First Amendment forbids gov-
ernment from silencing voices in the public discourse,
regardless of whether the speakers are commercial or
noncommercial entities.
Moreover, reaffirmation of the “no more than” defini-
tion will not compromise government’s legitimate exercise
of its power to regulate health and safety statements on
products. Members of this Court recently have expressed
concern about whether that power will be limited unduly
by commercial speech law. To the contrary, reinforcement
of the “no more than” definition will enhance public
4
knowledge about product health and safety issues, by
ensuring that the public hears from all knowledgeable and
interested parties on those issues.
Turning to the second purpose of this brief, PLAC
describes below how the California court's decision will
provide an unacceptable boon to the plaintiffs’ bar. Unless
that decision is reversed, the plaintiffs’ bar will release a
torrent of abusive claims under California’s Unfair Compe-
tition Law. Those claims will not benefit anyone but the
plaintiffs’ bar, and will cost our nation both socially and
economically.
The decision below also should be reversed because it
otherwise will cause the plaintiffs’ bar to increase its
extrajudicial use of the media to gain an advantage in
litigation. The plaintiffs’ bar has a long-standing practice
of using the media to influence judges, potential jurors,
and regulators on product safety issues. With the knowl-
edge that the California court’s decision will chill the
countervailing speech of corporate speakers, the plaintiffs’
bar will feel free to step up its use of the media.
In short, the decision below contradicts this Court’s
commercial speech law, will impoverish the public dis-
course on important issues, and will benefit nobody except
plaintiffs’ lawyers. The decision should be reversed.
¢
5
ARGUMENT
I. THIS COURT SHOULD REITERATE AND
REINFORCE ITS DEFINITION OF COMMER-
CIAL SPEECH AS “SPEECH THAT DOES NO
MORE THAN PROPOSE A COMMERCIAL
TRANSACTION”
A. Precedent Supports Continued Use of the
“No More Than” Definition, and Provides
No Justification for the California Court’s
Definition
A consistent definition of “commercial speech” has
emerged from this Court and the federal circuit courts.
Commercial speech is “speech that does no more than
propose a commercial transaction.”
The Court adopted the “no more than” definition in its
seminal commercial speech case, Virginia State Board of
Pharmacy v. Virginia Citizens Consumer Council, Inc., 425
U.S. 748, 762 (1976). Although the Court has experi-
mented with other definitions, it returned to and settled
on the “no more than” definition in its two most recent
commercial speech decisions. Thompson v. W. States Med.
Ctr., 535 U.S. 357, 122 S. Ct. 1497, 1503 (2002); United
States v. United Foods, Inc., 533 U.S. 405, 409 (2001)
(stating commercial speech is “usually defined as speech
that does no more than propose a commercial transac-
tion”); see also City of Cincinnati v. Discovery Network,
Inc., 507 U.S. 410, 422-23 (1993).
The federal circuit courts, obligated as they are to
follow this Court, generally have understood the “no more
than” definition to be controlling. See, e.g., Mattel, Inc. v.
MCA Records, Inc., 296 F.3d 894, 906 (9th Cir. 2002) (“If
speech is not ‘purely commercial’ — that is, if it does more
6
than propose a commercial transaction — then it is entitled
to full First Amendment protection.”); Goldberg v. Cablevi-
sion Sys. Corp., 261 F.3d 318, 326 (2d Cir. 2001); CPC Int'l,
Inc. v. Skippy, Inc., 214 F.3d 456, 462 (4th Cir. 2000); U.S.
West, Inc. v. FCC, 182 F.3d 1224, 1232-33 (10th Cir. 1999);
S.0.C., Inc. v. County of Clark, 152 F.3d 1136, 1143-44,
amended by 160 F.3d 541 (9th Cir. 1998).
The California court, however, disregarded this
Court’s definition and instead invented a complicated
three-part test. Under that test, three elements must be
considered: the speaker, the intended audience, and the
content of the message. All three elements are described in
extraordinarily broad terms by the court.
First, the “speaker” element of the test will be met
whenever the speaker is “someone engaged in commerce”
or “someone acting on behalf of a person so engaged.”
Kasky v. Nike, Inc., 27 Cal. 4th 939, 960 (Cal. 2002).
The second element — the “intended audience” for the
speech — is similarly broad. This element is satisfied if the
intended audience is “likely to be actual or potential
buyers or customers of the speaker’s goods or services, or
persons acting for actual or potential buyers or customers,
or persons (such as reporters or reviewers) likely to repeat
the message to or otherwise influence actual or potential
buyers or customers.” Jd.
The third element — the “content” of the speech — is
satisfied if the “speech consists of representations of fact
about the business operations, products, or services of the
speaker (or the individual or company that the speaker
represents), made for the purpose of promoting sales of, or
other commercial transactions in, the speaker’s products
or services.” Jd. at 961. All a plaintiff’s lawyer would have
7
to allege is that every statement made by a corporation is
for the ultimate purpose of promoting sales.
Practically speaking, the California court’s test would
include virtually any statement made by a commercial
enterprise concerning itself, or its products or services,
that likely will be heard by, or repeated to, potential
customers. That definition arguably would cover a wide
range of statements that have nothing to do with the
proposal of a commercial transaction — such as a com-
pany’s statements about the effect of proposed regulations
on its business, its responses to a reporter writing a story
about the environmental or health impact of the com-
pany’s manufacturing processes, and its statements to the
press about a pending lawsuit. As Justice Chin explained
in his dissent below, the majority’s broad definition of
commercial speech impermissibly contradicts this Court’s
“no more than” definition. Jd. at 973-74.
In sum, the overwhelming weight of authority sup-
ports application of the “no more than” definition in this
case, and rejection of the California court’s unprecedented
definition. The next section of this brief explains why the
“no more than” definition is not only controlling, but also
correct.
B. The “No More Than” Definition Serves the
Underlying Purpose of the Commercial
Speech Doctrine
In order to understand why the “no more than”
definition makes sense, it is necessary to consider the
underlying justification for the commercial speech doc-
trine. That doctrine is an exception to the usual rule that
all content-based restrictions on speech are presumed
8
unconstitutional and reviewed under a strict scrutiny
standard. R.A.V. v. City of St. Paul, Minn., 505 U.S. 377,
387-88 (1992). Justice Stevens summarized the reasons for
that exception in the principal opinion in 44 Liquormart,
Inc. v. Rhode Island, 517 U.S. 484, 499 (1996):
[T]he State’s power to regulate commercial
transactions justifies its concomitant power to
regulate commercial speech that is “linked inex-
tricably” to those transactions. [Friedman uv.
Rogers, 440 U.S. 1, 10 n.9 (1979); Ohralik v. Ohio
State Bar Ass’n, 436 U.S. 447, 456 (1978)]
(commercial speech “occurs in an _ area
traditionally subject to government regulation”).
As one commentator has explained: “The entire
commercial speech doctrine, after all, 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.” [Laurence H. Tribe,
American Constitutional Law § 12-15, at 903 (2d
ed. 1988)).
Thus, the sole justification for government’s extraor-
dinary power to regulate commercial speech is the relation
of that speech to commercial transactions. The “no more
than” definition fits perfectly with that justification.
Speech is covered by the “no more than” definition only
when it is part and parcel of a commercial transaction.
The classic example of speech that falls within the “no
more than” definition is set forth in Virginia State Board:
“‘T will sell you the X prescription drug at the Y price.’”
425 U.S. at 761. Such speech is integral to the proposed
commercial transaction. The likely response to the exam-
ple from Virginia State Board is purely economic conduct —
the consumer either will buy or not buy that prescription
9
drug. As discussed below, however, speech that goes
beyond the mere proposal of a commercial transaction is
more likely to be responded to with additional speech, not
just economic conduct, and so must receive full constitu-
tional protection.”
C. The “No More Than” Definition Properly
Excludes Speech that Is Part of a Public
Discussion or Debate
Fundamental First Amendment values are put at risk
by a definition of commercial speech broader than the “no
more than” definition. When a speaker’s message does
more than propose a commercial transaction, that message
may be the first step in a public discussion. Protection of
such discussion is at the heart of the First Amendment.
See Consol. Edison Co. of N.Y., Inc. v. Pub. Serv. Comm’n
of N.Y., 447 U.S. 530 (1980). As this Court has explained,
the First Amendment 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.” Cohen v. California, 403 U.S. 15, 24 (1971).
This case provides a helpful illustration of these
principles. Plaintiff does not dispute that Nike’s state-
ments do more than propose a commercial transaction.
Those statements are part of a public discussion between
* Because PLAC believes Nike’s speech is noncommercial, it does
not express an opinion herein as to whether commercial speech should
receive full constitutional protection.
10
Nike, its critics, and its supporters about labor conditions
in overseas factories where Nike’s products are manufac-
tured and, more generally, about the impact of American
corporations on labor conditions in the developing world.
Such public discussion clearly warrants full First Amend-
ment protection. As this Court has stated, “[f]ree discus-
sion concerning the conditions in industry and the causes
of labor disputes appears to us indispensable to the effec-
tive and intelligent use of the processes of popular gov-
ernment to shape the destiny of modern industrial
society.” Thornhill v. Alabama, 310 U.S. 88, 103 (1940).
The California court, however, has created a new
definition of commercial speech that would allow judges in
California to interfere with public discussion based on
their view of truth and falsity. In this case, plaintiff asks
the California judiciary to restrain Nike’s speech based on
plaintiff’s allegations that Nike has introduced false
statements into the public debate about overseas labor
conditions. But this Court has declared that, “erroneous
statement is inevitable in free debate, and ... must be
protected if the freedoms of expression are to have the
‘breathing space’ that they ‘need . . . to survive.’” New York
Times Co. v. Sullivan, 376 U.S. 254, 271-72 (1964) (quoting
NAACP v. Button, 371 U.S. 415, 433 (1963)).
Moreover, the constitutional presumption against
governmental interference with public debate does not
vary based on the commercial motivation of a participant
in that debate. No doubt, Nike has a commercial motiva-
tion in defending its labor practices. But “(corporations
and other associations, like individuals, contribute to the
‘discussion, debate, and the dissemination of information
and ideas’ that the First Amendment seeks to foster.” Pac.
Gas & Elec. Co. v. Pub. Utils. Comm’n of Cal., 475 U.S. 1,
~~ ee oe
11
8 (1986) (quoting First Nat’l Bank of Boston v. Bellotti, 435
U.S. 765, 783 (1978)). If statements from a commercial
speaker are deserving of less weight, that is for the audi-
ence to decide, not the government. “(T]he people in our
democracy are entrusted with the responsibility for judg-
ing and evaluating the relative merits of conflicting
arguments. They may consider, in making their judgment,
the source and credibility of the advocate.” Bellotti, 435
U.S. at 791-92; see also Consol. Edison, 447 U.S. at 534.
The threat posed by plaintiff’s argument is not
limited to direct interference with ongoing public debate,
but also includes the danger that commercial entities will
be deterred from even entering the debate. See Button, 371
U.S. at 433 (“The threat of sanctions may deter . . . almost
as potently as the actual application of sanctions”). The
speech of corporations, just like that of individuals, is
chilled by the risk of court-imposed liability for that
speech. Bellotti, 435 U.S. at 786 n.21. Management often
would choose not to take such a risk and “[m]uch valuable
information which a corporation might be able to provide
would remain unpublished.” Jd. “(T]he free dissemination
of ideas [might] be the loser.” Jd. (brackets in original;
citations omitted).’
In sum, the “no more than” definition of commercial
speech appropriately excludes speech that is critical to
public dis.ussion and debate. If this Court -vere to abandon
that definition, it would become far easier for government —
* Importantly, PLAC does not argue that commercial entities
should be immune from liability for their false advertising. Companies
ne ene eee SER, Oe Lashom Ant or Gn
12
and plaintiffs’ lawyers acting in the name of government —
to silence the voices of commercial entities, voices that are
particularly important in our free market economy. For
this reason alone, the California court’s unprecedented
and overbroad definition of commercial speech should be
rejected.
D. Reaffirmation of the “No More Than” Defi-
nition Will Not Unduly Restrict Govern-
ment’s Regulation of Health and Safety
Statements
One aspect of the definitional issue, although not
implicated directly by this case, merits special attention.
Members of this Court have expressed concern recently
about the interaction between the commercial speech
doctrine and the government's ability to regulate health
and safety statements on products. See W. States Med.
Ctr., 122 S. Ct. at 1509-10 (Breyer, J., dissenting); United
Foods, 533 U.S. at 428 (Breyer, J., dissenting). Reaffirma-
tion of the “no more than” definition, however, will en-
hance, not reduce, public knowledge about the health and
safety of products.
A question that could be raised about the “no more
than” definition is whether corporate statements about
health and safety will be deemed to fall outside that
definition, and instead be categorized as fully protected
speech. The answer is that most corporate statements
about health and safety, when made in the context of a
commercial transaction, should qualify as commercial
speech under the “no more than” definition. Put another
way, and as discussed more fully below, commercial speech
law generally should apply to both regulations that restrict
what companies can say and regulations that require
me
at
. Vw
oe.
13
disclosures by companies about health and safety issues.
These two types of regulations will be considered in turn.
The “no more than” definition, by its terms, includes
statements that a company makes to consumers to per-
suade them to buy a particular product. Such statements
are part of the proposal of a commercial transaction. Thus,
when a company tells consumers something about the
health or safety of its product in connection with its
proposal that they buy the product, those statements
qualify as commercial speech. It follows that government
could regulate such statements, to make sure that they
are not actually or potentially misleading, subject to the
lesser First Amendment scrutiny accorded commercial
speech under the Central Hudson test.
The same result should apply to governmental regula-
tions designed to prevent misleading omissions of health
or safety information. The analysis would be that, absent
the mandated disclosure, the proposal of the commercial
transaction will be misleading. Again, such mandated
disclosures should be reviewed by the courts under Central
Hudson.*
Strict scrutiny, and not Central Hudson, should apply,
however, when government attempts to restrict what a
corporation says about health and safety issues outside of
* This analysis assumes that the mandated disclosure is not a
matter of common knowledge. If the disclosure were common knowl-
edge, then it would not serve to protect the public from being misled.
Any attempt by government to require a company to make a disclosure
that either is common knowledge, or that is otherwise not designed to
protect the public from being misled, should be reviewed under strict
scrutiny. See Wooley v. Maynard, 430 U.S. 705 (1977).
14
the context of the proposal of a commercial transaction.
For example, government should have to satisfy strict
scrutiny review if it wishes to prohibit companies from
answering press inquiries about product safety issues.
By excluding such speech from the category of com-
mercial speech, the “no more than” definition serves to
enhance public knowledge about health and safety issues.
An uninhibited debate about those issues that includes all
interested and knowledgeable participants will lead, our
constitutional system assumes, to the discovery of truth.
See Virginia State Bd., 425 U.S. at 770. For example, in
the instant case, the public’s search for truth will be aided
by hearing the views of both Nike and its opponents with
respect to the safety of labor conditions in overseas facto-
ries.
Thus, this Court’s continued reliance on the “no more
than” definition will not limit unduly the government's
ability to regulate health and safety information and, in
fact, will enrich the public discourse on those issues. The
next section discusses an additional reason why the Court
should adhere to the “no more than” definition — the
inevitability that any broader definition would lead to
abusive conduct and litigation by the plaintiffs’ bar.
Il. THE CALIFORNIA COURT’S DECISION, IF
UPHELD, WILL PROVIDE AN UNACCEPT-
ABLE BOON TO THE PLAINTIFFS’ BAR
The California Court’s decision bolsters plaintiffs’
lawyers in two unacceptable ways. First, the decision
expands the ability of plaintiffs’ lawyers to commence
frivolous, yet potentially lucrative, lawsuits under Califor-
nia’s Unfair Competition Law (“UCL”). Second, and no less
15
importantly, the decision below enables the plaintiffs’ bar
to step up its practice of trying its lawsuits in the media.
A. The Decision Below Creates a New Cate-
gory of Lucrative Lawsuits that Primarily
Will Benefit Plaintiffs’ Lawyers
Too many lawsuits in America are brought by lawyers
seeking to line their own pockets, rather than serve the
interests of the named plaintiffs. See, e.g., In re Bridge-
stone / Firestone, Inc., 288 F.3d 1012 (7th Cir. 2002), cert.
denied sub nom. Gustafson v. Bridgestone / Firestone, Inc.,
123 S. Ct. 870 (2003) (decertifying class of purchasers of
allegedly defective tires who had not suffered any physical
injuries and who already had received free replacement
tires); Wood v. Wyeth-Ayerst Labs., 82 S.W.3d 849 (Ky.
2002) (rejecting class action claim seeking “medical moni-
toring” of users of Phen-Fen who had no present physical
injury). The decision below, if upheld, will enable plaintiffs’
lawyers to churn out, with relative ease, numerous new
lawsuits alleging false commercial speech in violation of
the UCL.
Opportunistic plaintiffs’ lawyers should have no
problem finding Kasky-like claims to file. Corporations
routinely speak in the press about controversial issues
(although their speech likely will be chilled by the decision
below). A creative plaintiffs’ lawyer should be able to read
a few newspapers in the morning and come up with at
least one possible UCL claim to file by lunchtime.
The plaintiffs’ bar will rely on Kasky not only to file
stand-alone UCL claims, but also as an adjunct to their
product liability lawsuits. The chain of events is easily
foreseeable. First, a plaintiffs’ firm will attract media
16
attention to its product liability lawsuits, in order to
influence the potential jury pool and find additional
plaintiffs whom it can represent. Next, the targeted
corporation, like any person who is attacked in the press,
will seek to defend itself (unless its speech has been
chilled) by making its own truthful statements to the
media. Corporations feel compelled to defend themselves
because, if they do not, a portion of the public will presume
that they are guilty, and shareholders could suffer a
decline in the value of their investment.
After the corporation defends itself, the California
court’s decision will come into play. Empowered by that
decision, the plaintiffs’ firm will add a UCL claim to its
complaint against the corporation, alleging that the
corporation’s statements to the media were false. It will
add that claim with two unacceptable goals in mind — to
deter the corporation from communicating with the public
and as an additional pressure point to extract a settlement
from the corporation. Unfortunately, both of those goals
likely will be accomplished under current California law
as articulated by the court below.
As a separate matter, the nature of the UCL will make
it easy for plaintiffs’ lawyers, emboldened by the Kasky
decision, to file copycat actions. Unlike the “little FTC
Acts” in most states, California’s UCL allows citizens to
act as private attorneys general. Cal. Bus. & Prof. Code
§ 17204 (West 2003). In other words, the UCL allows
plaintiffs’ lawyers to commence lawsuits even when they
cannot locate a claimant who actually has been deceived or
harmed by the allegedly false advertising. Plaintiff Kasky,
for example, explicitly alleges in his complaint that he has
suffered no damage whatsoever as a result of Nike’s
statements.
17
Moreover, a plaintiff who successfully prosecutes a
UCL action in a representative capacity could seek an
award of attorney's fees. Under section 1021.5 of the
California Code of Civil Procedure, the courts are empow-
ered to award attorneys fees to “a successful party ... in
any action which has resulted in the enforcement of an
important right affecting the public interest.” The possibil-
ity of a fee award will, no doubt, provide an additional
incentive to the plaintiffs’ bar to identify and file UCL
claims that rely on the California Supreme Court’s broad
definition of commercial speech. It comes as no surprise
that this lawsuit was brought by some of the most promi-
nent plaintiffs’ class action lawyers in the nation.
This Court, by reversing the California court’s deci-
sion, will prevent the plaintiffs’ bar from releasing a
torrent of abusive UCL claims — claims that rarely would
benefit anyone outside the plaintiffs’ bar, and that would
cost our nation both economically and socially. As ex-
plained below, a reversal also is necessary because the
California court’s decision enhances the ability of plain-
tiffs’ lawyers to manipulate the media.
B. The Decision Below Encourages the Plain-
tiffs’ Bar to Increase Its Use of the Media to
Influence the Outcome of Litigation
Plaintiffs’ lawyers have become increasingly adept at
using the media to advance their lawsuits. To be fair, they
sometimes publicize legitimate issues concerning product
safety. But many times, allegations concerning product
safety that are made by the plaintiffs’ bar turn out to be
false or misleading.
18
The history of use of the media by plaintiffs’ lawyers
provides a basis for predicting how they will take advan-
tage of the decision below. In case after case, the plaintiffs’
bar has turned to the media to influence potential jurors,
the judiciary and regulators. While there certainly are
lawyers of integrity in the plaintiffs’ bar, there also are
some who are more concerned about a payday than learn-
ing the truth about product safety issues. If the California
court’s decision is allowed to stand, these lawyers will not
only continue to use the media to influence the outcomes
of their lawsuits, but will be emboldened to step up their
media campaigns, knowing that the threat of a UCL claim
will chill the countervailing voices of manufacturers.
Numerous examples exist of product safety claims
that were pushed forward in the media by the plaintiffs’
bar and that ultimately were proven meritless — from
“sudden unintended acceleration” in Audi cars, to the
alleged dangers of silicone breast implants, Norplant, Alar,
Bendectin, and power lines. The first three of these exam-
ples will be explored in more detail below so as to show the
history of extrajudicial use of the media by plaintiffs’
lawyers, and to foreshadow the sort of conduct that will
occur if the California court’s decision is not overturned.
1. Examples of Prior Use of the Media by
the Plaintiffs’ Bar to Influence Litigation
a. “Sudden Unintended Acceleration”
by Audi Cars
During the summer of 1986, a few lawsuits were filed
alleging that the Audi 5000 had a design defect that
caused the cars to accelerate suddenly when the transmis-
sion was shifted out of park, even when the driver was
19
pressing on the brake. Those claims entered the national
consciousness later that fall when a now notorious seg-
ment of “60 Minutes” was aired. The segment featured an
Ohio mother who accidentally and tragically had run over
her six-year-old son with her Audi 5000, and who claimed
that she had her foot on the brake the whole time.’
Unbeknownst to the viewers, plaintiffs’ lawyers were
lurking behind the scenes of the “60 Minutes” segment.
The broadcast relied heavily on an “expert” on automobile
safety named William Rosenbluth. But Rosenbluth did not
disclose in the segment that he already had been retained
by lawyers who were representing the Ohio family in its
lawsuit against Audi. Moreover, Rosenbluth misled view-
ers when he performed a demonstration on “60 Minutes” of
an accelerator pedal moving down apparently by itself.
Rosenbluth, the expert hired by a plaintiffs’ firm, had
drilled a hole in the car’s transmission and pumped in air
or fluid so that the accelerator pedal would be depressed
without the assistance of a human foot.*
The “60 Minutes” program created tremendous
publicity and sympathy for the “sudden unintended
acceleration” theory. By 1989, Audi was facing more than
one hundred lawsuits seeking combined damages totaling
* See Peter W. Huber, Manufacturing the Audi Scare, Wall St. J.
Dec. 18, 1989, available at 1989 WL-WSJ 457495; Peter W. Huber,
— Revenge: Junk Science in the Courtroom 559-62 (Basic Books
7 See id.; Walter Olson, It Didn't Start with Dateline NBC, Nat’!
Review, June 21, 1993, available at http//www.walterolson.com/articles/
crashtests.html.
20
$5 billion.’ Demand for Audi vehicles plummeted and some
dealers went out of business.
Eventually, the real facts came out. Comprehensive
reviews by the National Highway Traffic Safety Admini-
stration and its counterparts in Canada and Japan con-
cluded that the cause of sudden acceleration in the Audi
5000 was not a design defect, but drivers who accidentally
placed their feet on the wrong pedal.”
Because the “sudden unintended acceleration” claims
were made in the pre-Kasky era, Audi did not hesitate to
refute the claims in the press. If the California court’s
decision were on the books at that time, however, Audi
might have been chilled from expressing its views for fear
that its comments could give rise to a UCL claim. Like-
wise, unless the decision below is reversed, unscrupulous
plaintiffs’ lawyers will be encouraged by that decision to
continue their misleading submissions to the media,
believing that the party best suited to rebut misleading
claims about a product’s safety — the manufacturer — will
choose silence rather than risk a UCL claim.
b. Silicone Breast Implants
Silicone breast implants were the subject of a health
scare throughout the 1990s. The scare started in 1990
when Connie Chung ran a segment on her show alleging
” Peter W. Huber, Junk Science in the Courtroom, Forbes, July 8,
1991, at 68, available at 1991 WL 2802206.
* Id.; James R. Healey & David Kiley, PR Company Comes Up with
2 Campaigns Taking SUVs to Task, USA Today, Jan. 24, 2003, at 3B,
available at LEXIS, News Library, at Major Papers File.
Be nee nn
iS
21
that the implants cause autoimmune, neurological and
other diseases. Within the following four years, an ava-
lanche of lawsuits was filed against the various manufac-
turers of the implants. For example, Dow Corning was
named as a defendant in approximately 20,000 lawsuits.°
But by the mid-1990s, the plaintiffs’ lawyers had a
problem. The public was becoming increasingly convinced
that the breast implant litigation rested on “junk sci-
ence.””” To save their lawsuits, the plaintiffs’ bar launched
a nationwide media campaign designed to combat the
“junk science” accusation.” They retained under a multi-
million dollar contract a public relations firm named
Fenton Communications.” Fenton had the right qualifica-
tions for the job, as it previously had been successful in
attracting media attention and fomenting fear with
respect to the Alar scare.”
* Michael Fumento, A Confederacy of Boobs: How Special Interests,
Assorted Ideologues, and a Sensationalist Press Torpedoed Breast
Implants and Now Threaten Other Medical Devices, Reason Magazine,
Oct. 1995, available at LEXIS, News Library, Magazine File.
* Ann Davis, Plaintiffs: We'll Junk “Junk Science” Tag, Nat’ L.J.,
Dec. 2, 1996, at A6, available at LEXIS, News Library, Papers File.
" Id.
* Id.; David K. Martin, Truth Prevails Over “Junk Science,” Chi.
Trib., Sept. 2, 1998, at 25, available at 1998 WL 2891543; Michael
Fumento, The FDA’s Panel Did Not Recommend the Ban of Silicone
Breast Implants, Wash. Times, Jan. 21, 1999, at Al8, available at 1999
WL 3076271; Michael Fumento, Dwindling Implant Returns, Wash.
Times, Dec. 28, 1998, at A17, available at 1998 WL 3467312; A “Sleazy”
Attack, Wall St. J. Eur., Feb. 19, 1997, at 10, available at 197 WL-WSJE
3806723.
* A “Sleazy” Attack, supra note 12, at 10; Bonner R. Cohen,
Scaring Up Money with False Attacks On Science, Knight Ridder/Trib.
(Continued on following page)
22
The substantial financial investment made by the
breast implant lawyers in their media campaign paid
dividends. After hiring Fenton, the plaintiffs’ lawyers
dramatically improved their success rate in defending
Daubert motions, and filled their pockets with million of
additional dollars from settlements and judgments.
While the media campaign launched by the plaintiffs’
bar served them well, it could not ultimately prevent the
truth from being established. In 1999, Congress received a
report from the Institute of Medicine, which it had asked
to study the breast implant issue. The independent panel
of 13 scientists reported that there is no reason to believe
that the implants are toxic, cause harmful effects on the
immune system, or give rise to a unique disease syn-
drome.*
The history of the breast implant litigation illustrates
why the California court erred in depriving companies of
the same level of First Amendment as is received by their
attackers. No matter how much the plaintiffs’ bar tries to
characterize its tort lawsuits against large corporations as
“David versus Goliath” stories, the truth is that the
plaintiffs’ bar is a gigantic industry unto itself. The plain-
tiffs’ bar does not blink at spending millions of dollars on
media efforts to support its lawsuits. Basic principles of
fairness, as well as the public’s interest in learning the
truth, require that manufacturers receive the same level of
Bus. News, Sept. 20, 2000, available at LEXIS, News Library, Papers
File (characterizing Fenton Communications as an expert at “fomenting
fear among consumers” and noting its involvement in the Alar scare).
“ Gina Kolata, Panel Confirms No Major Illness Tied To Implants,
N.Y. Times, June 21, 1999, at Al, available at 1999 WL 30483238.
23
constitutional protection for their responses as do the
plaintiffs’ lawyers who sponsor those attacks.
c. Norplant
After the plaintiffs’ lawyers put Dow Corning out of
business, they targeted another product — Norplant. When
it was launched in the early 1990s, Norplant — six tiny
hormone-releasing rods that are implanted under the skin
— was heralded as a breakthrough in contraception due to
its 99 percent effectiveness in preventing pregnancy. But
the tort lawyers soon swarmed around Norplant, bringing
along with them many of the same medical experts and
laboratories that had made money in the breast implant
litigation.”
The plaintiffs’ lawyers had honed their media strategy
by the time they zeroed in on Norplant. They used bill-
boards, television advertisements and media scare cam-
paigns to recruit 50,0000 women to sue the manufacturer.”
The expense associated with this media campaign was not
a problem for the plaintiffs’ lawyers, as they had accumu-
lated a sizable war chest from their previous lawsuits.
The media hype, however, could not be justified by the
“scientific” evidence collected by the plaintiffs’ lawyers.
The results in the litigation attest to the shoddy quality of
that evidence. As of 1999, the manufacturer of Norplant
* Gina Kolata, Will the Lawyers Kill Off Norplant?, N.Y. Times,
May 28, 1995, § 3, at 1, available at LEXIS, News Library, Northeast
File.
* Leslie Laurence, Your Perfect Birth Control ... Blocked?,
Glamour, Sept. 1999.
24
had won three jury verdicts, 20 pretrial judgments, and
the dismissal of 14,000 claims.” Last year, a United States
District Judge sitting in Texas dismissed the claims of
most remaining class members, finding that, “Plaintiffs
have not produced a shred of evidence or expert testimony
that supports an association between Norplant” and the
diseases in question.”
The ongoing Norplant litigation shows that the
plaintiffs’ bar has not stopped using the media as part of
its case strategy, and remains willing to commence mas-
sive tort litigation without solid scientific support for its
claims. In this environment, it is especially important that
the public hear the voices of those persons best suited to
answer the allegations of the plaintiffs’ bar. This is not the
time for silencing the companies that have the incentive
and knowledge to rebut junk science.
As demonstrated by the three examples discussed
above, plaintiffs’ attorneys consider extrajudicial use of the
media to be one of the tools of their trade. Unless the
California court’s decision is vacated, plaintiffs’ attorneys
can be expected to ramp up their use of the media, know-
ing that their public statements are less likely to be
challenged by the companies whom they sue. For the sake
of promoting robust debates that ultimately reveal the
" Charles Ornstein, Norplant Company Agrees to Settle Suits,
Dallas Morning News, Aug. 26, 1999, available at LEXIS, News
Library, Papers File.
‘* In re Norplant Contraceptive Prods. Liab. Litig., 215 F. Supp. 2d
795, 833 (E.D. Tex. 2002).
25
truth about the health and safety of products, the decision
below should be reversed.
¢
CONCLUSION
For the foregoing reasons, amicus curiae Product
Liability Advisory Council, Inc. respectfully asks this
Court to reject the Supreme Court of California’s unduly
broad definition of commercial speech, reverse the decision
below, and, in so doing, reiterate and reinforce its defini-
tion of commercial speech as “speech that does no more
than propose a commercial transaction.”
Respectfully submitted,
STEVEN G. Bropy*
JEANETTE M. VIGGIANO
KING & SPALDING LLP
1185 Avenue of the Americas
New York, NY 10036
(212) 556-2100
Attorneys for Amicus Curiae
Product Liability Advisory
Council, Inc.
*Counsel of Record
Of Counsel:
HUGH F. Youn, JR.
PRODUCT LIABILITY ADVISORY COUNCIL, INC.
1850 Centennial Park Drive, Suite 510
Reston, VA 20191
(703) 264-5300
App. 1
CORPORATE MEMBERS/PRODUCT LIABILITY
ADVISORY COUNCIL, INC.
23-Jan-03
3M BP Amoco Corporation
Allegiance Healthcare Bridgestone/Firestone,
Corporation Inc.
Altec Industries Briggs & Stratton
American Suzuki Motor Corporation
Corporation Bristol-Myers Squibb
Andersen Corporation Company
Anheuser-Busch — and Williamson
Companies —
Ansell Healthcare, Inc. 2Y0W2-Forman
Corporation
Appisten Papers, ine. Brunswick Corporation
— Pharmaceuticals, Caterpillar Inc.
FASF Corporation Centerpulse USA Inc.
Baxter International, Inc. ©®¢¥Fo™ Corporation
Bayer Corporation Compaq
Continental Tire North
Beretta U.S.A. Corp. Amnavien, tno.
Bel Conpevation Cooper Tire and Rubber
Biro Manufacturing Company
Company, Inc. Coors Brewing
Black & Decker (U.S.) Inc. Company
BMW of North America, Crown Equipment
LLC Corporation
Bombardier Recreational DaimlerChrysler
Products Corporation
App. 2
Dana Corporation Guidant Corporation
Deere & Company Harley-Davidson
Delphi Corporation Motor ranwaatond
Dorel Juvenile Group, get ry ele
Inc. Group
E & J Gallo Winery Honda North America,
E. I. DuPont de Nemours Inc.
and Company Hyundai Motor
Eaton Corporation America
Eli Lilly and Company ICON Health & Fitness,
Emerson Electric Co. Inc.
Engineered Controls — Truck
International, Inc. and Engi _
Corporation
Estee Lauder Companies Senan SOetene Amnesten.
ExxonMobil Corporation Inc.
FMC Corporation Johnson & Johnson
Ford Motor Company Johnson Controls, Inc.
General Electric Company Joy Global Inc.
General Motors Kawasaki Motors Corp.,
Corporation U.S.A.
Georgia-Pacific Kia Motors America,
Corporation Inc.
GlaxoSmithKline Kolcraft Enterprises,
GLOCK, Inc. Inc.
Great Dane Limited Kraft Sag North
Partnership America, Inc.
App.
Mazda (North America),
Inc.
McNeilus Truck and
Manufacturing, Inc.
Medtronic, Inc.
Mercedes-Benz of North
America, Inc.
Michelin North America,
Inc.
Miiler Brewing Company
Mitsubishi Motor Sales
of America, Inc.
Niro Inc.
Nissan North America, Inc.
Novartis Pharmaceuticals
Corporation
PACCAR Inc.
Panasonic
Pentair, Inc.
Pfizer Inc.
Pharmacia Corporation
Philip Morris Companies
Inc.
Polaris Industries, Inc.
Porsche Cars North
America, Inc.
3
Purdue Pharma L.P.
Raytheon Aircraft
Company
Remington Arms
Company, Inc.
Rheem Manufacturing
RJ Reynolds Tobacco
Company
Schindler Elevator
Corporation
SCM Group USA Inc.
Sears, Roebuck and Co.
Shell Oil Company
Siemens Corporation
Smith & Nephew, Inc.
Snap-on Incorporated
Sofamor Danek,
Medtronic Inc.
Solutia Inc.
Sturm, Ruger &
Company, Inc.
Subaru of America, Inc.
Sunbeam Corporation
Synthes (U.S.A.)
Textron, Inc.
The Boeing Company
App.
The Dow Chemical
Company
The Goodyear Tire &
Rubber Company
The Heil Company
The Lincoln Electric
Company
The Procter & Gamble
Company
The Raymond Corporation
The Sherwin-Williams
Company
The Toro Company
Thomas Built Buses, Inc.
Toshiba America
Incorporated
Toyota Motor Sales, USA,
Inc.
TRW Inc.
UST (U.S. Tobacco)
Volkswagen of America,
Inc.
Volvo Cars of North
America, Inc.
Vulcan Materials Company
4
Water Bonnet
Manufacturing, Inc.
Whirlpool Corporation
Wilbur-Ellis Company
Wyeth
Yamaha Motor
Corporation, U.S.A.
Zimmer, Inc.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.