Posted: March 21st, 2023

CASE Kasky v. Nike Inc.27 Cal.4th 939 Case

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1. Facts

2. Procedural History

3. Issues

4. Reasoning/Analysis

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Decisions/Holding

Case Brief: Kasky v. Nike Inc. 27 Cal.4th 939

Facts:

Nike Inc. was accused of operating sweatshops in foreign countries, which led to a negative impact on their public image. As a response, Nike released a series of press releases and letters to various organizations to defend its practices. However, Marc Kasky, a California resident, alleged that Nike’s statements were misleading and false, and filed a lawsuit against the company under California’s Unfair Competition Law (UCL) and False Advertising Law (FAL).

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Procedural History:

The case was initially filed in California Superior Court, but was later moved to the California Supreme Court. The court granted Nike’s motion to dismiss the case on the grounds that the statements made by Nike were protected under the First Amendment, as they were part of a public debate on a matter of public interest.

Issues:

The main issue in the case was whether Nike’s statements were commercial speech, which is not protected under the First Amendment, or non-commercial speech, which is protected. Additionally, the court needed to determine whether the UCL and FAL applied to Nike’s statements, as they were not directly related to the company’s products or services.

Reasoning/Analysis:

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The court held that Nike’s statements were commercial speech, as they were made in response to the negative impact on the company’s sales and reputation. Therefore, they were subject to regulation under the UCL and FAL. The court also found that the UCL and FAL were not limited to statements made in connection with the sale of goods or services, but could also apply to statements made in connection with a company’s business practices.

The court further held that Nike’s statements were not protected under the First Amendment, as they were potentially misleading and had a direct impact on consumers. The court noted that Nike had a duty to disclose any facts that would be material to consumers, and that Nike’s statements did not fully disclose the company’s labor practices.

Decisions/Holding:

The California Supreme Court held that Nike’s statements were commercial speech, subject to regulation under the UCL and FAL. The court further held that Nike’s statements were not protected under the First Amendment, as they were potentially misleading and had a direct impact on consumers. Therefore, the court allowed the case to proceed and reversed the lower court’s dismissal.

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