Shoes, Lies, and Litigation
25 April 2003, 12:10 PM
The Supreme Court heard arguments the other day in Kasky v. Nike, a case about, among other things, free speech, lying, harm to others, corporate responsibility, fraud, and , of course, legal technicalities. As far as Your Humble Blogger understands it, here are the issues:
Nike was accused, in the popular press and the unpopular press, in conversations, in flyers, and on 48 Hours, of running sweatshops and other immoral business practices. For a while, it looked almost as if they might actually sell fewer shoes (and hats, and socks, etc., etc.) because the Swoosh stood, not for victory, but for exploitation. They retaliated, again in the popular press and other aspects of the Big Cultural Tohu Bohu, with various arguments which indicated that they were not, in fact, Bad Guys. Some of these arguments appeared as paid advertisements in newspapers, and others were in letters to influential people, letters to the editor, etc. It's just barely possible, just within the realm of credibility, that in all this discussion, there were statements made with intent to deceive.
I'm not saying there were, and I'm not saying there weren't. OK, I'm saying there were. The point is, it doesn't matter for the next bit. Just keep in mind that there are allegations of intent to deceive, and you'll be OK.
Anyway, a fellow out in California by the name of Marc Kasky (who, and may I add that foreshadowing is a legitimate literary technique, wouldn't buy a pair of Nike shoes if his, er, grandmother's feet were cold, or something) sued Nike under California unfair competition law, which bans (among other things) "unfair, deceptive, untrue or misleading advertising." Kasky's contention is that the letters and ads defending Nike's business practices were, in effect, ads for Nike products, and that therefore falsehoods and misleading statements in those letters and ads, were falsehoods and misleading statements in ads for Nike products, and therefore actionable. Nike's contention is that those letters and ads, in response to allegations about their company, were not ads for Nike products, and therefore do not fall under the jurisdiction of the law.
OK, that's all background, and so is this New York Times article, this editorial and this article from the Washington Post, this SF Chronicle article, the Nike website, and the California Supreme Court decision supporting Kasky. Whew.
As for who is right and who is wrong, I am totally uncertain. I think that lying in general is protected speech, at least until actual harm is shown. That is, if I say, in this blog, that I'm 6'4" tall, it's morally wrong (imao), but it isn't and should not be legally actionable. If, on the other hand, I say, in this blog, that I'm a tax-deductible charity organization, it is both morally wrong and legally actionable. If I sell you a car, and it turns out not to have an internal combustion engine, that's fraud and legally actionable. If I sell you a car that I say was hand-made by a team of Moravian midgets, and it turns out that one of the fifty workers was 5'1", and only moved to Moravia when she was five, that's not so much fraud. On the other hand, if I tell you that my grandmother is extremely cold, and I need to sell my Moravian-midget-built car to buy her some slippers, and the car turns out to in fact be everything I said it was, but my grandmother has been dead for years, is that fraud? Is it actionable fraud? If a McDonald's worker smiles at me but isn't actually happy, is that fraud?
Is Nike selling shoes or swooshes? Are they selling the idea of Nike, in which case everything they do is an ad for Nike-ness, or are they selling actual products, in which case the only fraud possible is misrepresentation of those products?
Also, and this is a side point which the Supreme Court has been asked to decide, how was Kasky hurt by the fraud, if fraud there was? If there was a fraud, surely in order to show there was a fraud you have to find some person who was at least potentially defrauded – and that person is not Marc Kasky. Kasky wasn't duped by Nike into buying anything, since he didn't believe anything Nike said for a minute, he wasn't even duped into having an erroneous perception of the universe. The California law specifically states that Kasky, or anybody, is allowed to sue on behalf of the public, but Bush's Solicitor General has filed a brief saying that that part of the law is unconstitutional, and should be struck down. The Bush Boys are doing it to, in general, make it harder for individuals to sue corporations (they have a pattern of that, and I'm agin it), but that doesn't make their argument wrong.
Here's my problem: Not only is Klasky a Good Guy, and Nike a Bad Corporation, but I do think that Nike has deliberately chosen to misrepresent their corporate identity, and that they have done that in order to sell shoes. I just don't know if that constitutes fraud.
OK, I'll stop there, and post, and see if y'all can sort me out.