Kasky v. Nike Inc

In Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, Nike and its officers and directors, in response to public criticism and to maintain and increase Nike's profits, issued allegedly false statements in press releases and in other public relations materials. Nike and its officers and directors stated that "workers who make Nike products are protected from physical and sexual abuse, that they are paid in accordance with applicable local laws and regulations governing wages and hours, that they are paid on average double the applicable local minimum wage, that they receive a 'living wage,' that they receive free meals and health care, and that their working conditions are in compliance with applicable local laws and regulations governing occupational health and safety." (Id. at pp. 947-948.) The Supreme Court, in a four-to-three vote, concluded that neither the First Amendment nor the California Constitution protected Nike's speech from regulation under California's false advertising laws because it constituted "commercial speech that may be regulated to prevent consumer deception." (27 Cal.4th at p. 969.) The majority observed that, under United States Supreme Court precedent, "commercial speech that is false or misleading is not entitled to First Amendment protection and 'may be prohibited entirely.'" (Kasky, supra, 27 Cal.4th at p. 953.) The majority then enumerated the reasons for the distinction between commercial and noncommercial speech: "First, 'the truth of commercial speech ... may be more easily verifiable by its disseminator than ... news reporting or political commentary, in that ordinarily the advertiser seeks to disseminate information about a specific product or service that he himself provides and presumably knows more about than anyone else.' Second, commercial speech is hardier than noncommercial speech in the sense that commercial speakers, because they act from a profit motive, are less likely to experience a chilling effect from speech regulation. Third, governmental authority to regulate commercial transactions to prevent commercial harms justifies a power to regulate speech that is ' "linked inextricably" to those transactions.'" (Id. at pp. 954-955.)