Lying About Products is not a Free Speech Issue

Sneaker manufacturer Nike is in trouble with the state of California. According to an Associated Press story for January 10, 2003, Nike has been accused of using Asian sweatshops to manufacture shoes and athletic wear. In a publicity campaign defending itself against the accusation, Nike allegedly lied about wages and working conditions in the factories.

A labor activist sued the company under California's consumer protection law. Nike tried to have the suit thrown out using the reasoning that their publicity campaign is not "commercial speech" and therefore protected by the First Amendment according to Supreme Court precedents.

The California Supreme Court ruled against the company, holding that the publicity campaign is commercial speech and that company executives could be sued for lying. The US Supreme Court has agreed to consider Nike's appeal of the California decision.

Nike lawyer Lawrence Tribe warned that "There is a Draconian scheme in which one side is virtually unfettered in what it can say that is critical of the business, and the other side is shackled. The ultimate loser is the public." Another expert on Constitutional law, Floyd Abrams, complained that if the Supreme Court upholds the ruling against Nike, "corporations will speak less because they will be warned by lawyers and business people to shut up, lest they be sued."

I agree with the California Supreme Court that Nike's publicity campaign is commercial speech, and that lies aimed at selling products are not protected by the First Amendment. Almost any publicity campaign by a corporation can be presumed to be "commercial." Why would Nike want to defend their manufacturing practices in public? To make their products more attractive to purchase, of course.

The "shackles" of which Tribe complains limit only the company's "right" to lie about its products or the conditions under which they are produced. The two sides are not unequally shackled by allowing lies to be challenged in court. While Nike can be sued for lying in its own defense, their opponents are liable for slander or libel if they say or write lies about the company.

If, as Abrams warns, the decision will prompt corporations to "speak less" in defense of their practices, it should be only the untrue portion of their speech that they fear presenting to the public. If a company's practices are defensible, they can be defended using true statements alone.

It seems to me that the First Amendment protects two kinds of speech: true statements and opinions. Harmful lies are fair game for lawsuits. Lies about a person or corporation can be harmful if they undermine the victim's reputation; in that case the liar is guilty of libel. Lies in support of product sales are harmful to those who consequently make misinformed buying decisions.

The First Amendment would not be harmed if the Supreme Court were to hold Nike responsible for telling the truth in its publicity campaigns.