At issue is Nike's vigorous public relations campaign to defend itself against allegations that it used overseas sweatshops. Nike's critics say the company's defense amounted to false advertising. The company, the world's largest manufacturer of athletic shoes, contends it must be free to explain itself to customers, potential customers or anyone else.
Nike wrote letters and issued press releases and fact sheets about its overseas labor conditions. Such statements are part of the marketplace of ideas protected by the First Amendment, lawyer Laurence Tribe argued on Nike's behalf. They are not advertisements, which government has more power to control, Tribe said.
"It's part of an extended argument about why the allegations against Nike are unfounded," Tribe said. "It doesn't have 'Air Jordan' on it."
Nike got help Wednesday from the administration's top Supreme Court lawyer. Solicitor General Theodore Olson told the justices that a California court gave a private corporate critic, Marc Kasky, too much authority to go after Nike in court.
Unless the Supreme Court says otherwise, the Nike case could mean that "anyone with a whim, a grievance and a filing fee can become a government-licensed censor," Olson told the court.
The case offers the high court another opportunity to define how the concept of free speech applies in the business world. Historically, advertising or promotional material get less protection than the contents of a newspaper or the words of a corporate critic like Kasky.
The San Francisco activist sued Nike five years ago, but his case has never gone to trial. The California Supreme Court ruled that the suit can go ahead, and Nike appealed to the Supreme Court.
The case arises from a campaign by Beaverton, Ore.-based Nike to defend wages and conditions at Asian plants, run by subcontractors, where workers make tennis shoes and athletic wear with the distinctive Nike swoosh logo.
Forty large media companies, including The Associated Press, joined conservative legal organizations, the Chamber of Commerce, the American Civil Liberties Union and other organizations to back Nike.
Corporate executives will refuse to talk about the safety of products, racial discrimination or environmental concerns about their industry if they fear their words will lead to a lawsuit, the media organizations said.
Several consumer and nonprofit groups, AARP and several states are among Kasky's supporters.
Public interest and consumer activists dragged a large cardboard mock-up of a Nike sneaker to the sidewalk outside the Supreme Court building Wednesday morning, and positioned it atop a cardboard sheet depicting the Constitution.
"Tell the Truth — Just Do It!" read one protester's handmade sign.
Kasky claims that in 1996 and 1997, Nike made six misrepresentations about its employment practices in the Third World. Kasky cited a letter to the editor of The New York Times, a press release, other documents and a posting on Nike's corporate Web site.
None of the documents are an advertisement in the usual sense, but Kasky claims they still amounted to a misleading sales pitches.
"Consumers are entitled to the truth about the products they buy, whether that truth is what the product is made of, ... or where it is made, or whether it is made with slave labor or child labor," said Alan Morrison, a lawyer with the consumer organization Public Citizen.
The case is Nike Inc. v. Kasky, 02-575.