Washington Post columnist Bob Samuelson chastises the U.S. Supreme Court majority for ducking the recent free-speech-for-business case (see Ted Frank’s post of Jul. 1, as well as Feb. 13 and May 3-5, 2002). Sample: “Just about the last people you’d want to put in charge of the First Amendment are trial lawyers, whose business is suing large companies on any available pretext. … What’s occurring here is that trial lawyers are road-testing a new form of corporate shakedown. First, advocacy groups would attack a company or industry. Next, companies would face a dilemma: be silent and let the attacks stand, or respond and face an expensive and embarrassing suit. Finally, companies that ended up in court might face a daunting standard of proof — not whether what they said was true, but whether it might be misleading.” (Robert Samuelson, “A Tax on Free Speech”, Jul. 9). Before the Court issued its ruling, interesting columns about the case also appeared from Jonathan Rauch (“Corporate Lying is Bad”, National Journal/Reason.com, Jun. 9) and Dan Kennedy (“The Silent Swoosh”, Boston Phoenix, May 2-8). Update Sept. 14: Nike settles case.
Professor Volokh, of the Volokh Conspiracy, on the Nike v. Kasky case. Under a 4-3 California Supreme Court decision, Nike is potentially liable to any California citizen if its response to political speech criticizing Nike is deemed “misleading.”
(Full disclosure: Walter Dellinger of my law firm filed a U.S. Supreme Court brief on behalf of Nike.)
It was a hashtag prosecution, a social media campaign posing as a legal case: #ExxonKnew. And like yesterday’s media balloon become today’s litter, its deflated remains floated back down to earth last week in a New York courtroom.
In a 2003 case called Nike v. Kasky, no less a liberal authority than Supreme Court Justice Stephen Breyer warned that it was dangerous to freedom of speech to arm ideological adversaries with legal power to bring fraud charges against businesses based on those businesses’ public statements about contentious issues….
In his full, scathing opinion, Judge Ostrager rejected each of the state’s themes. “ExxonMobil’s public disclosures were not misleading.”…
New York’s prosecution of Exxon — a legal vendetta against a target chosen for essentially political reasons — deserves to be studied in law schools for years to come. But not for the reasons its authors once hoped.
Whole thing here.
Months of agitation promoting a government investigation of supposedly wrongful advocacy on the issue of climate change have begun to pay off. As Holman Jenkins [paywall] notes, purportedly levelheaded Democrats and environmentalists are now jumping on the bandwagon for a probe of possible unlawful speech or non-speech by energy companies and advocacy groups they’ve backed. Perhaps the most remarkable name on that list is Hillary Clinton, who said the other day in New Hampshire, referring to Exxon, “There’s a lot of evidence that they misled people.” That’s right: Hillary Clinton, of all people, now wants to make it unlawful for those who engage in public controversy to mislead people.
The first high-profile law enforcer to bite, it seems, will be Eric Schneiderman, whose doings I’ve examined at length lately. “The New York attorney general has launched an investigation into Exxon Mobil to determine whether the country’s largest oil and gas company lied to investors about how global warming could hurt its balance sheets and also hid the risks posed by climate change from the public,” reports U.S. News. Show me the denier, as someone almost said, and I will find you the crime: “The Martin Act is a nearly empty vessel into which the AG can pour virtually any content that he wants,” as Reuters points out. More on the Martin Act here and here.
At Forbes, Daniel Fisher notes the possible origins of the legal action in an environmentalist-litigator confab in 2012 (“Climate Accountability Initiative”) in which participants speculated that getting access to the internal files of energy companies and advocacy groups could be a way to blow up the climate controversy politically. Fisher also notes that Justice Stephen Breyer, in the Nike v. Kasky case dismissed 12 years ago on other grounds, warned that it will tend to chill advocacy both truthful and otherwise by businesses if opponents can seize on disagreements on contentious public issues and run to court with complaints of consumer (or presumably securities) fraud.
Perhaps in this case chilling advocacy is the whole point. And very much related: my colleague Roger Pilon’s post last week, “Whatever Happened to the Left’s Love of Free Speech?“; Robert Samuelson (“The advocates of a probe into Exxon Mobil are essentially proposing that the company be punished for expressing its opinions.”)
Wakefield, Mass., mother Sherri Carlson doesn’t like the commercials on the Nickelodeon network or the fact that Nickelodeon characters appear on boxes of cereal that she disapproves of. Thus (helped by a couple of nanny-state activist groups), rather than cancelling her cable bill, turning off the tv, or saying “No” to her three children, she’s announced plans to sue Viacom and Kellogg for billions of dollars under Massachusetts “consumer fraud” law, sending the required “intent to sue” letter. (Libby Quaid, AP, Jan. 19; Sarah Ellison and Janet Adamy, “Activists Plan to Sue Viacom and Kellogg Over Ads to Children”, Wall $treet Journal, Jan. 19; Hit & Run blog Jan. 19 Sullum and Gillespie). As Sullum notes, the reality-satire lag time is now down to a week.
Other discussion of the misuse of “consumer fraud” laws to interfere with free speech: Jul. 1, 2003; Nov. 30, 2004. As Eric Berlin points out, Ms. Carlson doesn’t even buy the sweetened cereal in question, so she’s asking for billions because she has to say “No” to her children. More on the problem of the injury-free class action at the AEI Liability Project.
One of the most justly unpopular of animal-rights groups is hoping to exploit the speech-suppressing potential of the California law invoked in Nike v. Kasky: “People for the Ethical Treatment of Animals Inc. accused the California Milk Advisory Board of violating the state’s unfair competition law by portraying an idyllic lifestyle for California dairy cows while knowing they endure a “harsh, uncomfortable and often painful existence.” The group is appealing a San Francisco judge’s ruling that the law’s false-advertising provisions cannot be invoked against a governmental entity such as the milk board. (Mike McKee, “PETA Cries Over Cow-Filled Milk Board Ads”, The Recorder, Nov. 18). For more on Nike v. Kasky, see Jul. 1, Jul. 9, Sept. 14, 2003. (Update Jan. 16, 2005: appeals court rules against PETA.)
The giant chemical and agribusiness company is suing the Oakhurst Dairy in Maine “for promoting its products as containing milk from cows who are not treated with artificial growth hormones. Monsanto, which makes the leading artificial hormone for cows, said the marketing implies that there’s something wrong with milk from treated cows, even though studies show the milk is no different than milk from untreated cows.” (Edward D. Murphy, “On the front lines of free speech”, Portland Press Herald, Aug. 31; Kristen Philipkosky, “Sour Grapes over Milk Labeling”, Wired News, Sept. 16). As the Press-Herald’s Murphy suggests, this kind of suit can work very similarly to one like Nike v. Kasky in chilling controversial business speech, the difference being that in this case one business is doing it to another.