- The Washington Times - Thursday, April 24, 2003

Several Supreme Court justices yesterday seemed to accept arguments that critics targeted Nike as "the poster child for the evils of globalization," and appeared unconcerned about whether the company's denials aimed to sell shoes or change policy.
"I think [Nike is] both trying to sell their products and make a statement to the public," said Justice Stephen G. Breyer, who declared his position more outspokenly than other justices who indicated agreement. "It's a statement that plays a role in the public debate about the kind of society we want to live in."
The California Supreme Court ruled that Nike's denials that it used Southeast Asian sweatshops to produce shoes and sports gear were "false advertising" under state commercial regulations. Nike contended in letters to editors, press releases and fact sheets that the products were made by subcontractors in accordance with local laws by workers who received double the minimum wage.
"It doesn't have 'Air Jordan' on it. … If it were a shoe, and it were on the other foot, it would go away in an instant," said Nike's attorney, Harvard law professor Laurence H. Tribe.
Mr. Tribe said the First Amendment would protect consumer boycotts from reprisals so a company's denial of accusations was protected as well.
Although many companies and news interests await the court's decision, due by June, the justices may not reach the free-speech issue. The court is weighing a threshold question about California's law allowing any citizen to stand in for the state as a "private attorney general" even if that person is not directly injured as the U.S. Constitution requires of a plaintiff who sues.
Private attorneys general are "unaccountable private enforcers" acting under a provision "open to anyone with a whim or a grievance, and the filing fee," said U.S. Solicitor General Theodore Olson, joining Mr. Tribe in arguing the company's appeal.
"The potential for abuse is difficult to overstate," Mr. Olson said in urging the court to reverse a California Supreme Court order that would force trial of the lawsuit filed five years ago by San Francisco activist Marc Kasky, who was seeking to silence the firm and make it turn over all profits earned in California.
Mr. Olson said the absence of injury was a key constitutional issue, since Mr. Kasky did not claim the company defrauded him into buying its products, or list other harm.
"Mr. Kasky never bought any Nike shoes. He never has, he never will," countered his Supreme Court counsel, Paul R. Hoeber of San Francisco.
Justice Anthony M. Kennedy said, "He doesn't say anyone in California is hurt by [Nikes statements]."
"Everybody in California is hurt by it," Mr. Hoeber replied.
"If companies comment directly on a public issue, [they] certainly are protected," Mr. Hoeber said, but he argued Nike's rebuttal of worldwide criticism involved misleading statements meant to induce people to buy its products, and were the equivalent of commercial advertising.
Justice Antonin Scalia said "so long as it's false and so long as it misleads someone," there seems no distinction between commercial speech and political speech, which has less protection.
In the second case argued yesterday, an appeal of another unusual California law, the Justice Department and the American Insurance Association likened California's attempt to locate unpaid Holocaust-era insurance policies to an unconstitutional state move to establish foreign policy.
The 1999 law required companies with California affiliates to disclose details on all policies sold in Europe from 1920 to 1945, identifying insureds and beneficiaries and disclosing whether the policy was paid. The law interferes with U.S. international agreements, Deputy Solicitor General Edwin S. Kneedler said.
The law aims at "a despicable practice by insurance companies" toward Holocaust survivors and heirs of Holocaust victims, said Frank Kaplan, the Santa Monica lawyer representing Insurance Commissioner John Garamendi.
An agreement signed last fall set aside $275 million for claims and humanitarian programs benefiting Holocaust survivors. The International Commission on Holocaust Era Insurance Claims has access to names of some 8 million German insurance policyholders and hundreds of thousands with other European policies.

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