• by John Gaffney , June 27, 2003

Last Thursday the US Supreme refused to rule on a case involving Nike and the First Amendment rights of its corporate communications and advertising. While the lack of a decision leaves the case back in the hands of the California court system, there is reason to believe the high court didn't rule on the case for technical measures, and may actually be leaning toward Nike's side.

According to Adonis Hoffman, senior VP and counsel to the American Association of Advertising Agencies, one particular paragraph in the majority opinion handed down from Justice David Souter indicates that Nike's argument that it's corporate ads and statements are protected by free speech may have found a hearing.

The paragraph reads: "Theoretically, Nike is correct that we could hold that all of Nike 's allegedly false statements are absolutely privileged even if made with the sort of "malice " defined in New York Times Co. v. Sullivan, 376 U.S.254 (1964), thereby precluding any further proceedings or amendments that might overcome Nike 's First Amendment defense. However, given the interlocutory posture of the case before us today, the Court could also take a number of other paths that would neither preclude further proceedings in the state courts, nor finally resolve the First Amendment questions in this case."

In other words, the Court needed more rulings from lower courts in order to make a decision. The action came as the result of a lawsuit filed in 1998 by Mark Kasky, which claims that Nike's public defense against allegations of unfair labor practices were false, misleading and constituted unprotected commercial speech. Nike claims its ads, press releases and letters to the editor on the matter are protected free speech. The case has become a legal referendum on that right of protection for corporations.

Hoffman said it would have been "easier and neater" if the high court dismissed the case out of hand. But he also sees no reason for the corporate communications or advertising business to be pessimistic about the outcome.

"The court recognized that there were a litany of options here," Hoffman said. "They recognized that California has not issued a final ruling yet. They said that there was no legal standing because of that. And they said that this is so important that they don't want to rule on its merits just yet."

Regardless of how the case plays out in the California courts, the level of awareness surrounding corporate communications and issue oriented advertising has been raised, said Hoffman. He advised anybody in an advertising or communications capacity not to change, but to be careful.

His view was echoed by Corporate Communications consultant Cary Brazeman, principal of The Corporate Storyteller. "How should U.S. companies behave as a result of (Thursday's) announcement? They should be careful," he said. "They should continue to feel free to speak out on issues, but they should take great care to ensure the truthfulness of their statements that are matters of fact."