Nike vs Kasky, Research Paper Example

In 1996, the allegations that Nike was mistreating its workers and deceiving the public about the quality of working conditions in its company started to arise. This started when California resident, Marc Kasky, sued Nike for deceptive and unfair practices under the California’s Unfair Competition Law. Kasky made the claim that the company misrepresented itself. The issues that arise in this case entail, deceptive practice under California Unfair Competition Law; poor working conditions at Nike’s overseas supplier factories, and the mistreatment and underpayment of workers in the overseas factories. The following will take a deeper look into the details of this case and what they meant for Nike’s operations going forward.

The cases initially started in 1996 when a large number of allegations arose against Nike regarding their mistreatment and underpayment of their workers in overseas facilities. Nike attempted to respond to these allegations in a variety of ways. One way in particular was through the issuance of press releases where they defended the integrity of their brand through ad promotions and denial statements. Then, in 1998, Marc Kasky made filed a lawsuit against the company based n California law. As a California resident, Kasky was able to file suit against the company based on the Unfair Competition Law. Through this law he alleged that Nike Nike made “material omissions of fact, and provided the public with false statements.

Nike argued that to convict Nike of this charge would be in violation of free speech of a corporation.  In a subtle way this argues that a corporation has the right to lie. They point out how the media had already established a dialogue , starting in the 90’s when debates over the benefits and disadvantages of globalization flooded the air waves. They point out that during this time corporations like Nike were vilified for being one of the main culprits in exploiting overseas cheap labor. In their main argument, they note that, “in the mid-1990s there was, of course, an intense debate on the pros and cons of globalization, and of the impact of companies like Nike on workers in the Third World, where Nike contracted out much of its production to some 900 factories in 51 countries with over 600,000 employees” (NIKE, INC. v. KASKY, 1). The argument goes on to state that as Nike became the prime example of evil, they in turn made response posts to argue in their defense that the statements were not true.  In response, Nike disagreed through similar media venues criticizing the integrity of documents that claimed their products were produced in regions of the world that exploit cheap labor. Then the defense argument touches on the context within which Kasky filed his lawsuit, noting that, surprising story took an odd turn within the system of government in that it challenged Nike’s right to freedom of speech based on an opinion by an individual citizen. The defense notes that Marc Kasky’s position was unparalleled in that it took a public debate to the courts and then asked the California courts to endorse his view. Collins and Skover further affirm this idea of precedence, noting that, “actually, there are several lessons–about law and how it is practiced, about how procedure can trump substance, about the character and future of the First Amendment, and about how all of this plays out in the lives of foreign workers. American consumers, and those for whom the majesty of the law is never quite majestic enough” (Collins and Skover, 965). The authors base this argument, that the law is not majestic enough, on the fact that Kasky was able to take Nike to court without providing any real evidence and then at the same time Nike didn’t have to answer for its actions in the media primarily due to the act that the legal structure and process enabled it to undermine reasonable logic, ethics, and integrity. This is the reason why the authors argue Nike V. Kasky is controversial case.

The plaintiff argued that Kasky was within his right to sue a corporation or another person, due to the fact that through invoking the California’s unfair competition law and the false advertising law that it included, anyone has standing according. The plaintiff is empowered by the Business and Professions Code 17204 which enables him to sue Nike on the behalf of the general public. The most important aspect of their empowerment to file suit stems from the California decisional law which enables the plaintiff  file suit without having to actually prove falsity.  The case  notes, “it could be an omission that made something misleading… he didn’t have to allege or prove reliance by or injury to anyone, or any particular level of fault. . Mr. Kasky qualified, to sue another person or corporation, here Nike and its officers, for making any statement in a newspaper or other publication such” (NIKE, INC. v. KASKY, 1). The case goes on to point out that these terms apply to any form of advertising, or public statements made by the company on the internet, or any statement made about a product where the speaker may eventually intend to sell the product, which puts the California Supreme Court in a position where it must be the final deciders as to where or not the material in question is misleading or not.

In sum, the Writ of Certiorari played a primary role in the Supreme Court’s decision. It entails a list of all parties involved in a particular case, as well as a statement of the facts of the case.  The legal questions presented for review, as well as all arguments needed to be approved, or granted with a writ of certiorari by the Supreme Court. The material that was assessed of Nike’s public statements fell into this category as to why the Court should grant the writ. The Writ of Certiorari also comes into play when the Supreme Court must decide on judging an appeal from a lower court ruling. When the trial court ruled in Nike’s favor, Kasky appealed and the case was taken to the Supreme Court who ruled in Nike’s favor as well. The issue at hand opens up a major debate. In Erwin Chemerinsky and Catherine Fisk’s artice “What is Commercial Speech? The Issue Not Decided in Nike V. Kasky, the authors ask “may a company selling tuna fish tel consumeers—in advertisements, letters to environmental groups, and elsewhere—that it tuna is caught in a dolphin-safe manner, when company officials know that the company’s nets regularly capture and kill dolphins?” (Chemerinsky and Fisk, 1143). It could be argued that the tuna company could be ethically in the wrong for doing this and they have a social responsibility to be transparent about their practices, but based on the findings of the Nike V. Kansky case, they are under no legal obligation to disclose this information. Similar to the Nike case, if tuna companies were to engage in these practices there would be no inherent negative health impact on the consumer, but what if there were? If Nike were to produce a show product that somehow resulted in causing injury over time, or physically reduced a consumer’s ability to perform the intended function of the product (ie, compete athletically in certain sports), would the public be in the position to sue the company for false advertisement if they stated the opposite. Likewise, one very grey area of the case can be seen in the way Kansky sued Nike for public statements made by company officials a well as statements made in advertisements. While it would be naïve to assume that a company official is not marketing a product when he engages with the media, is it grasping at straws to condemn the CFO of a company who comments on the efficacy of his company’s product(s), but is invited on news broadcast initially to comments on financial matters? The legality of the and the open-ended nature with which it was handled by the Supreme Court leaves much to be answered. Chemerinsky and Fisk do support the Supreme Court’s decision to dismiss the writ, stating that Kasky failed to provided adequate enough evidence to satisfy Article III’s standing requirement (Chemerinsky and Fisk, 1145). One can only wonder, however, what would have been the outcome, if Kansky was able to provided adequate enough proof, or if the all of the evidence provided by Kasky had been admissible in court.

Work Cited

Chemerinsky, Erwin, and Catherine Fisk. “What Is Commercial Speech-The Issue Not Decided in Nike v. Kasky.” Case W. Res. L. Rev. 54 (2003): 1143.

Collins, Ronald KL, and David M. Skover. “Landmark Free-Speech Case That Wasn’t: The Nike Kasky Story, The.” Case W. Res. L. Rev. 54 (2003): 965.

NIKE, INC. v. KASKY. The Oyez Project at IIT Chicago-Kent College of Law. 08 March 2015 <http://www.oyez.org/cases/2000-2009/2002/2002_02_575>.