Marketers in the News
You might have noticed a few court cases in the news that involve direct marketers and that could affect greatly how you present your products and services in the future.
The first case in the trio to be resolved is Illinois vs. Telemarketing Associates, in which the Attorney General of Illinois brought charges against a telemarketing company soliciting donations on behalf of a Vietnam veterans support charity. The issue at hand was whether charities, or their fund-raising agents, are protected by the First Amendment right to free speech in their sales pitches to generate donations. In a battle that went all the way to the Supreme Court, the outcome gives the states power to protect their citizens from misrepresentations of how donations will be used. The decision refrains from issuing judgment, however, on the legality of fund-raising agents to keep a significant portion of the monies they raise on behalf of the charity as compensation for services rendered.
The case continuing to make headlines since 1997 is Kasky vs. Nike, a legal embroilment that could have the most impact on commercial speech to date. Kasky, a California resident, filed suit against Nike under the state's unfair practices law. He alleges that the sportswear manufacturer misrepresented its labor practices in letters, op-eds and press releases crafted in response to stories in the press that allege the company runs sweatshops overseas. Nike lawyers counter that since these communications are not advertising, they do not constitute commercial speech, and thus enjoy First Amendment rights. Courts across California could not agree on this point, which is where the U.S. Supreme Court comes in. Currently, the outcome does not look good for Kasky, as several Supreme Court justices seem unwilling to broaden the definition of commercial speech beyond traditional forms of advertising or to produce a decision that will have a censoring effect on open debate on issues of public concern.
Which brings me to a case in its beginning stages. The SEC recently has filed suit against newsletter and book publisher Agora Inc., stating that one of its newsletters, PirateInvestor.com, and its editor, Frank Porter Stansberry, intended to defraud subscribers with a misleading e-mail promotion and the investment report offered. Intent is a very difficult thing to prove, and Agora seems to have its money-back guarantee on its side, which suggests that no one could have been harmed by this promotion.
What all these cases boil down to is what constitutes fraudor, can a corporation be held to a higher standard of proof because it has an interest in making money off its speech? I for one do not want a government agency or the Kaskys of the world deciding what's best for me to hear or read; that's my right to protect. But when Nike's lawyers argue that whether the company lied in its letters or press releases is immaterial in determining what is commercial speech, I have to hope that the company hangs in the court of public opinion. The First Amendment is a banner, not a shield.