Nike, Inc. v. Kasky

• Decision Date: 26 June 2003
• Docket Number: No. 02-575.,02-575.
• Citation: 539 U.S. 654
• Parties: NIKE, INC., ET AL. <I>v.</I> KASKY.
• Court: U.S. Supreme Court

539 U.S. 654

NIKE, INC., ET AL.v.

KASKY.

No. 02-575.

Supreme Court of United States.

Argued April 23, 2003.

Decided June 26, 2003.

Certiorari dismissed. Reported below: 27 Cal. 4th 939, 45 P. 3d 243.

CERTIORARI TO THE SUPREME COURT OF CALIFORNIA

Laurence H. Tribe argued the cause for petitioners. With him on the briefs were Thomas C. Goldstein, Amy Howe, Walter Dellinger, David J. Brown, and James N. Penrod.

Solicitor General Olson argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Assistant Attorney General McCallum, Deputy Solicitor General Clement, Jeffrey P. Minear, and Jeffrey A. Lamken.

Paul R. Hoeber argued the cause for respondent. With him on the brief were Alan M. Caplan, Roderick P. Bushnell, Patrick J. Coughlin, Randi Dawn Bandman, Albert H. Meyerhoff, and Sylvia Sum.^*

PER CURIAM.

The writ of certiorari is dismissed as improvidently granted.

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 Nike products 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. 80a-81a. Respondent appealed, and the California Court of Appeal affirmed, holding that Nike's statements "form[ed] 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 "[b]ecause 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 debate may "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, permit[s] 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.

I

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 dissociated 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 finally determined 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 State could 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 legal standards 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...