Between a Rock and a Judicial Hard Place: Corporate Social Responsibility Reporting and Potential Legal Liability under Kasky v. Nike
![handle is hein.journals/umkc72 and id is 1171 raw text is: BETWEEN A ROCK AND A JUDICIAL HARD PLACE:
CORPORATE SOCIAL RESPONSIBILITY REPORTING
AND POTENTIAL LEGAL LIABILITY UNDER
KASKY v. NIKE
Michele Sutton*
I. INTRODUCTION
The corporate social responsibility debate has simmered in the background
of the corporate governance debate for decades. In recent years, however,
governments, activists, non-governmental organizations (NGOs), and
companies have breathed new life into corporate social responsibility (CSR)
embracing the concept as a vehicle to promote accountability for the
environmental and social impacts of global business. The modern corporate
responsibility movement has seen substantial acceptance throughout the world.
The European Union (EU) is perhaps the most vocal supporter of CSR,
incorporating the core concepts of CSR into its social agenda for Member States.
While the EU promotes CSR as a purely voluntary endeavor by European
corporations, more Member States have begun adopting CSR principles, enacting
laws mandating corporate social reporting for some industries.
Within the global CSR community, the California Supreme Court's
decision in Kasky v. Nike3 engendered great alarm. The broad sweep of the
court's decision creates potential liability in California courts for statements in
support of corporate policy or operations, even for non-U.S. corporations.4 After
initially granting certiorari, the U.S. Supreme Court then dismissed certiorari as
improvidently granted,5 leaving the issue of legal liability for statements about
corporate operations unsettled.
Corporate social reporting under the EU's voluntary regime is essentially at
odds with the compulsory U.S. system of corporate accountability, imposed
through mandatory reporting and civil liability under state and federal law. As
Kasky presents potential liability for statements about corporate operations,
European companies may restrict or eliminate the voluntary social and
environmental reporting in response to the threat of liability in California under
the Kasky decision.
This note illustrates the pinch California law and Kasky v. Nike can create
for non-U.S. corporations voluntarily reporting under CSR. Part H1 introduces the
. J.D. Candidate, May 2005, University of Missouri - Kansas City School of Law. The author
wishes to thank Stuart, Quintin, Taylor and Ian Sutton for their tolerance and support, and Professor
Colin Picker for his time and effort in preparation of this Note.
1 See Green Paper: Promoting a European Framework for Corporate Social Responsibility,
COM(01)366 final at 8, available at http://europa.eu.int/comn/employmentsocial/
publications/2001/ke3701590_en.pdf [hereinafter Green Paper].
2 See id.
3 Kasky v. Nike, Inc., 45 P.3d 243, 248 (Cal. 2003), cert. granted, 537 U.S. 1099 (2003), and cert.
dismissed, 123 S. Ct. 2554 (2003).
4 See id., 45 P.3d at 303.
- Nike, Inc. v. Kasky, 123 S. Ct. 2554, 2554 (2003) (per curiam).](ViewImageLocal?handle=hein.journals/umkc72&div=52&collection=&method=preview&ext=.png&size=3)
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