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WASHINGTON — The much-anticipated commercial speech ruling involving Nike Inc. fizzled Thursday when the Supreme Court announced that the California Supreme Court’s judgment in the case was not ripe for review and should be sent back for possible trial. The dispute over whether Nike is entitled to full First Amendment protection for its statements made in defense of its global labor practices during the late 1990s was viewed as a major test of the court’s evolving commercial speech doctrine. The case could return to the high court after discovery and trial, neither of which occurred before the California Supreme Court issued its 2002 ruling against Nike. Consumer activist Marc Kasky had invoked California’s false advertising law to sue Nike for its statements — in letters to the editors, op-ed columns and public statements — rebutting charges of sweatshop labor. A San Francisco Superior Court judge dismissed his complaint, and the First District Court of Appeal affirmed, holding that Nike’s statements were part of a public debate “within the core area of expression protected by the First Amendment.” The California Supreme Court reversed and remanded the case, upholding Kasky’s use of false advertising laws, but noting that the case is “still at a preliminary stage” and that no determination had been made about whether Nike’s statements were false. The high court, in its final ruling of the term, dismissed the Nike case as improvidently granted, an action that usually goes unexplained. But Justice John Paul Stevens, joined by Justices Ruth Bader Ginsburg and David Souter, elaborated on the dismissal in a separate statement. Stevens said the lack of a final California judgment was a factor in the high court’s action. Nike had argued that the urgent nature of the First Amendment issue in the case warranted Supreme Court review under Cox Broadcasting v. Cohn, a 1975 decision that allows exceptions to the finality rule in First Amendment cases. But Stevens said the court had decided the California ruling was still too preliminary for review. “Even if we were to decide the First Amendment issues presented to us today, more First Amendment issues might well remain in the case.” The case was too important and raised too many “novel” issues, Stevens wrote in Nike Inc. v. Kasky, 03 C.D.O.S. 5569, to be decided prematurely. Stevens also said Kasky did not have standing to bring the suit — brought under California Business & Professions Code � 17200 — because he never alleged that he had “any personal stake in the outcome of the case.” Alan Caplan, one of the plaintiffs lawyers, shrugged off that holding, saying it won’t be much of a factor when the case returns to San Francisco for trial. “That is the rule,” the Bushnell, Caplan & Fielding partner said. “If somebody sues under 17200 and is not an injured party, there is no standing in federal court. There is standing in state court.” Justices Stephen Breyer and Sandra Day O’Connor dissented from the dismissal, arguing that there was no procedural obstacle to the court deciding the case now–especially in light of the key First Amendment issues involved. They said the kind of action brought by Kasky poses “a serious burden on speech” and should be deterred. Breyer said the case should be reviewed under a legal standard of “heightened scrutiny.” Nike officials said they were heartened by sympathetic language in the writings in the case, but were disappointed that the issue had not been resolved. Discovery and trial preparations are now likely to resume in California courts. Nike’s local counsel, David Brown, a partner in the San Francisco office of Philadelphia’s Morgan, Lewis & Bockius, said he was “encouraged” that none of the justices said anything negative about Nike’s position. Even so, he said, “I would have much preferred a ruling in our favor on the merits.” In the meantime, Nike General Counsel James Carter said, company officials are in a “real difficult circumstance” in determining how to explain Nike’s message on public issues without running afoul of the California court’s judgment. Alan Morrison, director of the Public Citizen Litigation Group, which supported Kasky, said the court had done the right thing. “Despite Nike’s prediction that it will be forced to censor itself until this case is finally resolved, we doubt that Nike will shut down its public relations office,” said Morrison. “What we do expect is that Nike will be much more careful when it tries to influence consumers by making claims about how its treats its overseas workers.” Bruce Johnson, a partner at Davis Wright Tremaine in Seattle who authored a brief for press groups in the case, said Thursday, “These significant First Amendment issues remain very much alive, and all Americans should have the right to debate and discuss these significant matters of public concern.” Tony Mauro is Supreme Court correspondent for American Lawyer Media and The Recorder’s Washington, D.C., affiliate Legal Times. Recorder Associate Editor Mike McKee contributed to this story.

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