Most of the athletic shoes sold by Nike, Inc. are manufactured by female workers under the age of twenty-our employed by subcontractors in China, Vietnam, and Indonesia. Beginning in March 1993, Nike assumed responsibility for its subcontractors’ compliance with applicable local laws and regulations regarding minimum wages, overtime, safety, health, and environmental protection. In 1996, the television program 48 Hours reported that Nike products were made in factories where workers were paid less than the applicable minimum wage; were required to work overtime and encouraged to work more than the legal overtime limits; were subjected to physical, verbal, and sexual abuse; and were exposed to toxic chemicals, noise, heat, and dirt, in violation of applicable occupational health and safety laws. These allegations were repeated in articles published in a variety of media.
In response, Nike issued press releases, letters to newspapers, letters to university presidents and athletic directors, and other documents (including full-page advertisements in leading newspapers) stating that the allegations were false and misleading, that its workers were paid in accordance with applicable local laws, and received free meals and medical care, and that their working conditions complied with safety and health rules. Marc Kasky sued Nike on behalf of the general public under California Business and Professions Code Sections 17204 and 17535, claiming that Nike’s statements were false and misleading and was made with knowledge or reckless disregard of California laws prohibiting false and misleading statements. Nike moved to dismiss the complaint on the grounds, among others, that its statements were protected by the First Amendment to the U.S. Constitution. Can a corporation participating in a public debate be subjected to liability for factual inaccuracies? [Kasky v. Nike, Inc., 45 P.3d 243 (Cal. 2002), cert. granted, 537 U.S. 1099 (2003), cert. dismissed as improvidently granted, 539 U.S. 654 (2003).]