Editorial: High court was right to dismiss Nike claim

Monday, June 30, 2003 | 8:57 a.m.

The U.S. Supreme Court last week dismissed a claim by athletic-wear manufacturer Nike, which had argued that an individual citizen could not take the corporation to court over its publicly released fact sheets, letters and press releases. Nike had asked the court to overturn a decision by the California Supreme Court, which had ruled that a citizen's complaint against the corporation must go to trial. The citizen had filed complaints of consumer fraud and unfair trade practices against the corporation, arguing that its missives were false and misleading. Nike had sent out the information to defend itself against persistent charges that labor conditions at its overseas plants are deplorable.

The high court had originally agreed to hear the case but then decided to dismiss it, meaning the trial in California will proceed. The case could come back to the court, however, to make a landmark ruling about whether Nike's statements constituted commercial speech, and whether commercial speech enjoys the same protections as political speech. As pointed out in an analysis by The New York Times, false commercial speech is subject to liability on its face, whereas political speech is protected unless there is proof of "deliberate or reckless falsehood."

But in allowing the trial to proceed at the state level, the high court has affirmed state laws that permit individual citizens to file suit over a corporation's public pronouncements. This is normally the function of a state attorney general and Nike had argued that individuals should not have this power. We agree with the court's decision to dismiss that claim. An individual who believes a corporation's statements are contrary to the facts should have the right to sue.