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Nike Vs Kasky Case Study Answers

Marc Kasky filed suit against Nike in California state court in 1998 suing the company for unfair and deceptive practices under California’s Unfair Competition Law and False Advertising Law.  Prior to the lawsuit, various news reports alleged poor working conditions at Nike’s overseas supplier factories.  In response, Nike issued press releases and other public statements rebutting the allegations.  Kasky alleged that Nike’s public statements regarding the working conditions in its overseas suppliers’ factories contained false information and material omissions of fact.  Specifically, Kasky took issue with Nike’s statements regarding the following: that workers who make Nike products are protected from physical and sexual abuse, they are paid in accordance with applicable local laws and regulations governing wages and hours, they are paid on average double the applicable local minimum wage, they receive a “living wage”, they receive free meals and health care, and their working conditions are in accordance with applicable local laws and regulations regarding occupational health and safety.  Nike claimed that the lawsuit was barred by the US Constitution’s First Amendment guarantee of free speech.

The trial court agreed with Nike and dismissed the claim.  Kasky appealed, and the California Court of Appeals affirmed the lower court’s ruling.  Kasky appealed further to the California Supreme Court, which reversed the lower courts’ rulings and held that Nike’s statements were commercial speech which is entitled to less constitutional protection than non-commercial speech.  Following the California Supreme Court’s ruling, Nike appealed (petitioned for certiorari) to the US Supreme Court, which agreed to hear the appeal.  In 2003, the US Supreme Court issued a decision in this case stating that it had granted certiorari improvidently and dismissed the case, which effectively let stand the California Supreme Court’s ruling.  Several months after the US Supreme Court decision, Nike and Kasky agreed to settle the case for $1.5 million.  The settlement involved investments by Nike to strengthen workplace monitoring and factory worker programmes.

- ReclaimDemocracy.org: Kasky v. Nike [background on case and links to legal documents]

18 February 2014

Nike lawsuit (Kasky v Nike, re denial of labour abuses)

Author: Business & Human Rights Resource Centre

Marc Kasky filed suit against Nike in California state court in 1998 suing the company for unfair and deceptive practices under California’s Unfair Competition Law and False Advertising Law.  Prior to the lawsuit, various news reports alleged poor working conditions at Nike’s overseas supplier factories.  In response, Nike issued press releases and other public statements rebutting the allegations.  Kasky alleged that Nike’s public statements regarding the working conditions in its overseas suppliers’ factories contained false information and material omissions of fact.  Specifically, Kasky took issue with Nike’s statements regarding the following: that workers who make Nike products are protected from physical and sexual abuse, they are paid in accordance with applicable local laws and regulations governing wages and hours, they are paid on average double the applicable local minimum wage, they receive a “living wage”, they receive free meals and health care, and their working conditions are in accordance with applicable local laws and regulations regarding occupational health and safety.  Nike claimed that the lawsuit was barred by the US Constitution’s First Amendment guarantee of free speech.  The trial court agreed with Nike and dismissed the claim.  Kasky appealed, and the California Court of Appeals affirmed the lower court’s ruling.  Kasky appealed further to the California Supreme Court, which reversed the lower courts’ rulings and held that Nike’s statements were commercial speech which is entitled to less constitutional protection than non-commercial speech.  Following the California Supreme Court’s ruling, Nike appealed (petitioned for certiorari) to the US Supreme Court, which agreed to hear the appeal.  In 2003, the US Supreme Court issued a decision in this case stating that it had granted certiorari improvidently and dismissed the case, which effectively let stand the California Supreme Court’s ruling.  Several months after the US Supreme Court decision, Nike and Kasky agreed to settle the case for $1.5 million.  The settlement involved investments by Nike to strengthen workplace monitoring and factory worker programmes.

- “Nike's Big Ticking-Off”, Duncan Campbell, Guardian [UK], 17 Nov 2003

- “Nike Settles Speech Case”, William McCall, Associated Press, 13 Sep 2003

- “Supreme Court Won't Rule in Case About Nike and Anti-Globalization”, Anne Gearan, Associated Press, 26 Jun 2003

- Nike: NIKE, Inc. and Kasky Announce Settlement of Kasky v. Nike First Amendment Case, 12 Sep 2003

- ReclaimDemocracy.org: Kasky v. Nike [background on case and links to legal documents]

- US Supreme Court: Nike v. Kasky, 26 Jun 2003

- Supreme Court of California: [PDF] Kasky v. Nike , 2 May 2002

1 December 2010

[PDF] Regulating Transnational Companies - 46 proposals

Author: William Bourdon, Yann Queinnec, SHERPA

This Proposal Paper hopes to provide an explanation of the constraints and a series of proposals for a system of TNC regulation. This requires us to first set out the fundamental obstacles that make the question of regulating the activities of TNCs so problematic. The crisis in the financial system that hit economies worldwide proved the importance of regulating for-profit private and public transnational actors. The difficulties states have in agreeing to a common set of rules reflect the scale of the various factors that have to be reconciled if we are to prevent and repair damage to the environment and violations to basic rights...The interests that may be shaken up by some of the proposals outlined in this paper are powerful. Although they are factors of inertia, they are also waiting for a sign, which could come either in the form of “Business as usual ” or “Let’s work together to invent a new economy.” We cannot accept the status quo. Unequal access to wealth, learning, food security and water are some of the many issues that transnational corporations impact strategically...

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Author: William Bourdon, Yann Queinnec, SHERPA

L’ambition du présent Cahier de propositions est d’expliquer les contraintes et de dessiner des propositions pour une régulation des entreprises transnationales. Elle implique de dresser au préalable un état des lieux des obstacles fondamentaux qui rendent la question de la régulation de l’activité des ETN si problématique. Lacrise du système financier, qui frappe l’ensemble des économies du globe, a montré l’enjeu que représente la régulation d’acteurs transnationaux privés ou publics à but lucratif...Nous ne pouvons nous résoudre au statu quo. Les inégalités de richesse ou d’accès au savoir, la sécurité alimentaire ou l’accès à l’eau, sont autant de défis...sur lesquels les entreprises transnationales ont une influence stratégique.

Read the full post here

1 June 2010

[PDF] Think globally, sue locally: Out-of-court tactics employed by plaintiffs, their lawyers, and their advocates in transnational tort cases

Author: Jonathan Drimmer, Steptoe & Johnson, released by U.S. Chamber of Commerce Institute for Legal Reform

Over the past 15 years, there has been a sharp rise in lawsuits brought against United States companies, as well as foreign companies with a substantial U.S. presence, that are premised on alleged personal or environmental injuries that occur overseas...With increasing frequency, plaintiffs, their attorneys, and their advocates are employing aggressive out-of court tactics that approach, straddle, and sometimes cross ethical lines in seeking to gain litigation advantages....The tactics...have clearly demonstrable patterns. Among them are: Aggressive media tactics...Community organizing tactics...Investment tactics...Political tactics...Fraudulent misconduct...[refers to AirScan, Archer Daniels Midland, Bridgestone, Bridgestone-Firestone (part of Bridgestone), Brylane (part of Pinault Printemps-Redoute), Cargill, Chevron, Chiquita, Coca-Cola, Daimler, Del Monte Foods, Dole, Dow Chemical, Drummond, ExxonMobil, Gap, Gulf Oil, Levi Strauss, Mercedes-Benz (part of Daimler), Mobil Oil (part of ExxonMobil), Nestlé, Occidental Petroleum, Petroecuador, Pfizer, PPR (formerly Pinault-Printemps-Redoute), Rio Tinto, Shell, Target, Texaco (part of Chevron), Union Carbide (part of Dow), Unocal (part of Chevron), Wal-Mart, Yahoo!]

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Author: Association Sherpa

Sommaire…La Responsabilité sociétale des Entreprises Transnationales…Les Entreprises Transnationales et leur Sphère d’Influence…La Déclaration Tripartite de l’OIT à l’Intention des entreprises multinationales…Les Principes Directeurs de L’OCDE à l’attention des entreprises multinationales…L’Autorégulation par les Codes de Conduite…L’Information Sociale et Environnementale des Entreprises Transnationales…L’Alien Tort Claim Act : un juge américain pour les victimes…La Responsabilité Juridique des Entreprises Transnationales. [fait référence à Chevron, Citigroup, Crédit Suisse, Coca-Cola, Del Monte, ExxonMobil, Ford, Nike,Price Waterhouse, Talisman Energy, Texaco (partie de Chevron), Total, Union Carbide (partie de Dow), Unocal (partie de Chevron)]

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1 January 2010

[PDF] Human Rights Due Diligence: Is It Too Risky? [scroll to p. 6]

Author: John F. Sherman, III, Harvard Kennedy School; Amy K. Lehr, Foley Hoag law firm, in CSR Journal, ABA Section of Intl. Law (American Bar Assn.)

Due diligence can and should now be used to assess and reduce a business risk that was only explicitly recognized
as a risk quite recently--corporate involvement in human rights abuse... Under this framework [of UN Special Representative John Ruggie], the business responsibility to respect human rights requires companies to conduct human rights due diligence... Conducting due diligence provides corporate boards with strong protection against mismanagement claims by shareholders, usually in the form of derivative lawsuits. [article addresses concerns that due diligence might increase risks from Alien Tort Statute claims, negligence claims, misrepresentation claims, confidentiality obligations; argument that conducting due diligence should result in immunity. Refers to apartheid reparations lawsuits, Chevron lawsuit re Nigeria, Unocal lawsuit re Burma, ExxonMobil lawsuit re Aceh, Nike v Kasky, UK OECD Guidelines cases involving Afrimex, Vedanta]

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29 October 2008

[PDF] Business & Human Rights Resource Centre launches world’s first online portal profiling human rights lawsuits against companies

Author: Business & Human Rights Resource Centre

Today the non-profit Business & Human Rights Resource Centre launches a free online portal – the first to bring together and demystify lawsuits from across the world alleging human rights abuses by companies. The portal summarises in non-legal language over 35 cases and the positions of each side, with more cases to be added soon. It also presents special commentaries by experts...Companies in profiled lawsuits include: AngloGold Ashanti, Barclays, BHP Billiton, Biwater, Blackwater, BP, Cambior, Cape PLC, Chevron/Texaco, Chiquita, Coca-Cola, Daimler, Deutsche Bank, Dow/Union Carbide, Drummond, DynCorp, ExxonMobil, Firestone, Ford, Freeport-McMoRan, IBM, Mitsubishi, Nike, Occidental, Rio Tinto, Severstal, Shell, Standard Chartered, Talisman, Trafigura, Total, UBS, Wal-Mart, Yahoo!

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539 U.S. 654123 S.Ct.2554156 L.Ed.3d 580> (, 539 U.S. 654123 S.Ct.2554156 L.Ed.3d 580> )

NIKE, INC., ET AL., PETITIONERS v. MARC KASKY.

No. 02-575.

Decided: June 26, 2003

  • per_curiam, per_curiam [HTML]
  • concurrence, STEVENS, GINSBURG, SOUTER [HTML]

ON WRIT OF CERTIORARI TO THE SUPREME COURT OF CALIFORNIA.

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PER CURIAM.

The writ of certiorari is dismissed as improvidently granted.

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JUSTICE STEVENS, with whom JUSTICE GINSBURG joins, and with whom JUSTICE SOUTER joins as to Part III, concurring.

Beginning in 1996, Nike was besieged with a series of allegations that it was mistreating and underpaying workers at foreign facilities. See App. to Pet. for Cert. 3a. Nike responded to these charges in numerous ways, such as by sending out press releases, writing letters to the editors of various newspapers around the country, and mailing letters to university presidents and athletic directors. See id., at 3a-4a. In addition, in 1997, Nike commissioned a report by former Ambassador to the United Nations Andrew Young on the labor conditions at Nike production facilities. See id., at 67a. After visiting 12 factories, "Young issued a report that commented favorably on working conditions in the factories and found no evidence of widespread abuse or mistreatment of workers." Ibid.

In April 1998, respondent Marc Kasky, a California resident, sued Nike for unfair and deceptive practices under California's Unfair Competition Law, Cal. Bus. & Prof. Code Ann. §17200 et seq. (West 1997), and False Advertising Law, §17500 et seq. Respondent asserted that "in order to maintain and/or increase its sales," Nike made a number of "false statements and/or material omissions of fact" concerning the working conditions under which Nikeproducts are manufactured. Lodging of Petitioners 2 (¶1). Respondent alleged "no harm or damages whatsoever regarding himself individually," id., at 4-5 (¶8), but rather brought the suit "on behalf of the General Public of the State of California and on information and belief," id., at 3 (¶3).

Nike filed a demurrer to the complaint, contending that respondent's suit was absolutely barred by the First Amendment. The trial court sustained the demurrer without leave to amend and entered a judgment of dismissal. App. to Pet. for Cert. 80-81a. Respondent appealed, and the California Court of Appeal affirmed, holding that Nike's statements "formed part of a public dialogue on a matter of public concern within the core area of expression protected by the First Amendment." Id., at 79a. The California Court of Appeal also rejected respondent's argument that it was error for the trial court to deny him leave to amend, reasoning that there was "no reasonable possibility" that the complaint could be amended to allege facts that would justify any restrictions on what was—in the court's view—Nike's "noncommercial speech." Ibid.

On appeal, the California Supreme Court reversed and remanded for further proceedings. The court held that "because the messages in question were directed by a commercial speaker to a commercial audience, and because they made representations of fact about the speaker's own business operations for the purpose of promoting sales of its products, . . . the messages are commercial speech." 27 Cal. 4th 939, 946, 45 P. 3d 243, 247 (2002). However, the court emphasized that the suit "is still at a preliminary stage, and that whether any false representations were made is a disputed issue that has yet to be resolved." Ibid.

We granted certiorari to decide two questions: (1) whether a corporation participating in a public debatemay "be subjected to liability for factual inaccuracies on the theory that its statements are `commercial speech' because they might affect consumers' opinions about the business as a good corporate citizen and thereby affect their purchasing decisions"; and (2) even assuming the California Supreme Court properly characterized such statements as commercial speech, whether the "First Amendment, as applied to the states through the Fourteenth Amendment, permits subjecting speakers to the legal regime approved by that court in the decision below." Pet. for Cert. i. Today, however, the Court dismisses the writ of certiorari as improvidently granted.

In my judgment, the Court's decision to dismiss the writ of certiorari is supported by three independently sufficient reasons: (1) the judgment entered by the California Supreme Court was not final within the meaning of 28 U. S. C. 1257; (2) neither party has standing to invoke the jurisdiction of a federal court; and (3) the reasons for avoiding the premature adjudication of novel constitutional questions apply with special force to this case.

* The first jurisdictional problem in this case revolves around the fact that the California Supreme Court never entered a final judgment. Congress has granted this Court appellate jurisdiction with respect to state litigation only after the highest state court in which judgment could be had has rendered a final judgment or decree. See ibid. A literal interpretation of the statute would preclude our review whenever further proceedings remain to be determined in a state court, "no matter how disassociated from the only federal issue" in the case. Radio Station WOW, Inc. v. Johnson, 326 U. S. 120, 124 (1945). We have, however, abjured such a "mechanical" construction of the statute, and accepted jurisdiction in certain exceptional "situations in which the highest court of a State has finallydetermined the federal issue present in a particular case, but in which there are further proceedings in the lower state courts to come." Cox Broadcasting Corp. v. Cohn, 420 U. S. 469, 477 (1975).1

Nike argues that this case fits within the fourth category of such cases identified in Cox, which covers those cases in which "the federal issue has been finally decided in the state courts with further proceedings pending in which the party seeking review" might prevail on nonfederal grounds, "reversal of the state court on the federal issue would be preclusive of any further litigation on the relevant cause of action," and "refusal immediately to review the state-court decision might seriously erode federal policy." Id., at 482-483. In each of the three cases that the Court placed in the fourth category in Cox, the federal issue had not only been finally decided by the state court, but also would have been finally resolved by this Court whether the Court agreed or disagreed with the state court's disposition of the issue. Thus, in Construction Laborers v. Curry, 371 U. S. 542 (1963), the federal issue was whether the National Labor Relations Board had exclusive jurisdiction over the controversy; in Mercantile Nat. Bank at Dallas v. Langdeau, 371 U. S. 555 (1963), the federal issue was whether a special federal venue statute applied to immunize the defendants in a state court action; and in Miami Herald Publishing Co. v. Tornillo, 418 U. S. 241 (1974), the federal issue was whether a Florida statute requiring a newspaper to carry a candidate's reply to an editorial was constitutional. In Cox itself, the federal question was whether the Statecould prohibit the news media from publishing the name of a rape victim. In none of those cases would the resolution of the federal issue have been affected by further proceedings.

In Nike's view, this case fits within the fourth Cox category because if this Court holds that Nike's speech was noncommercial, then "reversal of the state court on the federal issue would be preclusive of any further litigation on the relevant cause of action." 420 U. S., at 482-483; see also Reply Brief for Petitioners 4; Reply to Brief in Opposition 4-5. Notably, Nike's argument assumes that all of the speech at issue in this case is either commercial or noncommercial and that the speech therefore can be neatly classified as either absolutely privileged or not.

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. For example, if we were to affirm, Nike would almost certainly continue to maintain that some, if not all, of its challenged statements were protected by the First Amendment and that the First Amendment constrains the remedy that may be imposed. Or, if we were to reverse, we might hold that the speech at issue in this case is subject to suit only if made with actual malice, thereby inviting respondent to amend his complaint to allege such malice. See Tr. of Oral Arg. 42-43. Or we might conclude that some of Nike's speech is commercial and some is noncommercial, thereby requiring further proceedings in the state courts over the legalstandards that govern the commercial speech, including whether actual malice must be proved.

In short, because an opinion on the merits in this case could take any one of a number of different paths, it is not clear whether reversal of the California Supreme Court would "be preclusive of any further litigation on the relevant cause of action in the state proceedings still to come." Cox, 420 U. S., at 482-483. Nor is it clear that reaching the merits of Nike's claims now would serve the goal of judicial efficiency. For, even if we were to decide the First Amendment issues presented to us today, more First Amendment issues might well remain in this case, making piecemeal review of the Federal First Amendment issues likely. See Flynt v. Ohio, 451 U. S. 619, 621 (1981) (per curiam) (noting that in most, if not all, of the cases falling within the four Cox exceptions, there was "no probability of piecemeal review with respect to federal issues"). Accordingly, in my view, the judgment of the California Supreme Court does not fall within the fourth Cox exception and cannot be regarded as final.

II

The second reason why, in my view, this Court lacks jurisdiction to hear Nike's claims is that neither party has standing to invoke the jurisdiction of the federal courts. See Whitmore v. Arkansas, 495 U. S. 149, 154-155 (1990) ("Article III, of course, gives the federal courts jurisdiction over only `cases and controversies,' and the doctrine of standing serves to identify those disputes which are appropriately resolved through the judicial process"). Without alleging that he has any personal stake in the outcome of this case, respondent is proceeding as a private attorney general seeking to enforce two California statutes on behalf of the general public of the State of California. He has not asserted any federal claim; even if he had attempted to do so, he could not invoke the jurisdiction of a federal courtbecause he failed to allege any injury to himself that is "distinct and palpable." Warth v. Seldin, 422 U. S. 490, 501 (1975). Thus, respondent does not have Article III standing. For that reason, were the federal rules of justiciability to apply in state courts, this suit would have been "dismissed at the outset." ASARCO Inc. v. Kadish, 490 U. S. 605, 617 (1989).2

Even though respondent would not have had standing to commence suit in federal court based on the allegations in the complaint, Nike—relying on ASARCO—contends that it has standing to bring the case to this Court. See Reply Brief for Petitioners 5. In ASARCO, a group of taxpayers brought a suit in state court seeking a declaration that the State's law on mineral leases on state lands was invalid. After the Arizona Supreme Court "granted plaintiffs a declaratory judgment that the state law governing mineral leases is invalid," 490 U. S., at 611,3 the defendants sought to invoke the jurisdiction of this Court. In holding that the defendants had standing to invoke the jurisdiction of the federal courts, we noted that the state proceedings had "resulted in a final judgment altering tangible legal rights," id., at 619, and we adopted the following rationale:

"When a state court has issued a judgment in a case where plaintiffs in the original action had no standing to sue under the principles governing the federalcourts, we may exercise our jurisdiction on certiorari if the judgment of the state court causes direct, specific, and concrete injury to the parties who petition for our review, where the requisites of a case or controversy are also met." Id., at 623-624.

The rationale supporting our jurisdictional holding in ASARCO, however, does not extend to this quite different case. Unlike ASARCO, in which the state court proceedings ended in a declaratory judgment invalidating a state law, no "final judgment altering tangible legal rights" has been entered in the instant case. Id., at 619. Rather, the California Supreme Court merely held that respondent's complaint was sufficient to survive Nike's demurrer and to allow the case to go forward. To apply ASARCO to this case would effect a drastic expansion of ASARCO's reasoning, extending it to cover an interlocutory ruling that merely allows a trial to proceed.4 Because I do not believe such a significant expansion of ASARCO is warranted, my view is that Nike lacks the requisite Article III standing to invoke this Court's jurisdiction.

III

The third reason why I believe this Court has appropriately decided to dismiss the writ as improvidently grantedcenters around the importance of the difficult First Amendment questions raised in this case. As Justice Brandeis famously observed, the Court has developed, "for its own governance in the cases confessedly within its jurisdiction, a series of rules under which it has avoided passing upon a large part of all the constitutional questions pressed upon it for decision." Ashwander v. TVA, 297 U. S. 288, 346 (1936) (concurring opinion). The second of those rules is that the Court will not anticipate a question of constitutional law in advance of the necessity of deciding it. Id., at 346-347. The novelty and importance of the constitutional questions presented in this case provide good reason for adhering to that rule.

This case presents novel First Amendment questions because the speech at issue represents a blending of commercial speech, noncommercial speech and debate on an issue of public importance.5 See post, at 12-13. On the one hand, if the allegations of the complaint are true, direct communications with customers and potential customers that were intended to generate sales—and possibly to maintain or enhance the market value of Nike's stock—contained significant factual misstatements. The regulatory interest in protecting market participants from being misled by such misstatements is of the highest order. That is why we have broadly (perhaps overbroadly) stated that "there is no constitutional value in false statements of fact." Gertz v. Robert Welch, Inc., 418 U. S.323, 340 (1974). On the other hand, the communications were part of an ongoing discussion and debate about important public issues that was concerned not only with Nike's labor practices, but with similar practices used by other multinational corporations. See Brief for American Federation of Labor and Congress of Industrial Organizations as Amicus Curiae 2. Knowledgeable persons should be free to participate in such debate without fear of unfair reprisal. The interest in protecting such participants from the chilling effect of the prospect of expensive litigation is therefore also a matter of great importance. See, e.g., Brief for ExxonMobil et al. as Amici Curiae 2; Brief for Pfizer, Inc., as Amicus Curiae 11-12. That is why we have provided such broad protection for misstatements about public figures that are not animated by malice. See New York Times Co. v. Sullivan, 376 U. S. 254 (1964).

Whether similar protection should extend to cover corporate misstatements made about the corporation itself, or whether we should presume that such a corporate speaker knows where the truth lies, are questions that may have to be decided in this litigation. The correct answer to such questions, however, is more likely to result from the study of a full factual record than from a review of mere unproven allegations in a pleading. Indeed, the development of such a record may actually contribute in a positive way to the public debate. In all events, I am firmly convinced that the Court has wisely decided not to address the constitutional questions presented by the certiorari petition at this stage of the litigation.

Accordingly, I concur in the decision to dismiss the writ as improvidently granted.

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