Suit Accusing Nike of Fraud Is Dismissed

A judge on Friday dismissed a lawsuit accusing Nike of misrepresenting conditions at Asian factories in order to mislead customers.

The lawsuit, filed in April by a consumer advocate, claimed Nike violated California false-advertising laws in its campaign in defense of wages, treatment of workers, and health and safety conditions at overseas plants run by contractors.

Nike, the world’s largest athletic shoe maker, denied making false statements and said its descriptions of factory conditions were protected by freedom of speech.

Superior Court Judge David Garcia dismissed the lawsuit without giving a reason.

The ruling will be appealed, said Alan Caplan, lawyer for a San Francisco consumer advocate who sued on behalf of the public.

Caplan said he was at a loss to understand the ruling, because the right of free speech does not bar lawsuits over fraudulent speech.

Vada Manager, spokesman for the Beaverton, Ore.-based company, said Nike’s statements were not the type of advertising regulated by the California law and were constitutionally protected.

Most of Nike’s products are made by 450,000 workers in Asian factories run by contractors.

The lawsuit said Nike has falsely stated that it guarantees a “living wage” to all workers; that its workers in Southeast Asia make twice the local minimum wage, get free meals and health care and are protected from corporal punishment; and that it complies with government rules on wages, hours and health and safety conditions.

The suit said Nike’s self-descriptions were refuted in studies by labor and human rights groups, news media investigations and a January 1997 audit by the firm of Ernst & Young, commissioned by Nike.

In response to the suit, Nike said each of the claims had been previously addressed.