Academic journal article The Review of Litigation

Testing the Outer Limits of Commercial Speech: Its First Amendment Implications

Academic journal article The Review of Litigation

Testing the Outer Limits of Commercial Speech: Its First Amendment Implications

Article excerpt


The increasing tension between what the courts have deemed to be the necessary restrictions on "commercial speech" in order to protect consumers, on the one hand, and the important constitutional protections typically afforded free speech under the First Amendment, on the other, is no better illustrated than in the recent case of Nike, Inc. v. Kasky.1 In Nike, a "private attorney general" action brought by an individual named Marc Kasky asserted that the Nike corporation had violated California consumer protection statutes by public statements that the company made while defending itself against accusations of various critics that its factories in Southeast Asia were being operated as "sweatshops."2

The case presented a serious dilemma for a company that was, at the time, not making the usual representations in advertisements about the performance of its products (which are typically the source of deceptive trade practice acts), but rather, that, to defend its reputation, was offering defensive statements in letters and editorials about a subject of political and social concern-the treatment of overseas workers. And yet, it cannot be denied that some consumers base their purchasing decisions upon such broadbrushed, intangible corporate information about so-called "ethical" issues. A brief prepared for the court by Nike poignantly presented the legal question at issue:

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

The Supreme Court has previously acknowledged that "ambiguities may exist at the margins of the category of commercial speech,"4 and Justice Stevens in particular has remarked that "the borders of the commercial speech category are not nearly as clear as the Court has assumed,"5 suggesting that the distinction cannot rest solely on the form or content of the statement or on the motive of the speaker, but instead must be determined by the relationship between the speech at issue and the justification for distinguishing commercial from noncommercial speech.6 In his words, "any description of commercial speech that is intended to identify the category of speech entitled to less First Amendment protection should relate to the reasons for permitting broader regulation: namely, commercial speech's potential to mislead."7

The Supreme Court has never faced a situation quite like that presented by the Nike case. The Court's previous decisions in this area typically have dealt with statutes banning advertising of a specific nature. But the Nike case involves not only a more general consumer-protection statute but also corporate speech that is clearly directed toward an issue of public concern. The irony presented by the case is self-evident. Nike involves a plaintiff heralding a statute whose ultimate effect, no doubt, will be to silence the corporation about a political issue in which the public effectively "votes" with its dollars by deciding whether to purchase the products of a company accused of inhumane treatment. If the lawsuit is successful, the public will be deprived of hearing the other side of this important social debate,8 and, at a time when consumers tend to base more purchasing decisions upon such "ethical" information, the danger of applying the commercial-speech doctrine too restrictively appears obvious.


The Supreme Court has defined traditional commercial speech as that which "does no more than propose a commercial transaction,"9 and has stated that such speech is to be "distinguished by its content. …

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