By Kellen C. Kasper, of Foley & Lardner LLP
When and how the First Amendment applies is normally a complicated question. In a case decided earlier this week, Michael Jordan v. Jewel Food Stores, Inc., No. 12-1992, the parties teamed up to present an issue on commercial speech for the Seventh Circuit.
When Bulls legend Michael Jordan was inducted into the NBA Hall of Fame, Sports Illustrated created a special commemorative issue, giving Jewel a free ad in the issue in exchange for Jewel’s agreement to stock and sell it. Jewel’s ad featured a pair of #23 basketball sneakers, a short paragraph of congratulations to Jordan, and Jewel’s logo and slogan. Jordan brought a federal Lanham Act false-endorsement claim and state-law claims, including for false publicity, against Jewel for its use of his identity.
Jewel asserted immunity from suit under the First Amendment, arguing that the ad was fully protected noncommercial speech. Jordan maintained that the ad was commercial speech, entitled to lesser constitutional protection. Commercial speech is generally defined as “speech that proposes a commercial transaction.”
The district court sided with Jewel, mainly because it did not seek to have readers enter into any specific commercial transaction. The Seventh Circuit reversed, framing its analysis with three guideposts: whether the speech is an advertisement, whether it refers to a specific product, and whether the speaker has an economic motivation for the speech. These are not all necessary components of a finding of commercial speech.
The Court of Appeals stressed that while propositions of specific commercial transactions are at the “core” of commercial speech, such propositions do not demarcate the outer limits of what is commercial speech. Rather, even if speech does something more than (or in addition to) proposing a commercial transaction, it can still be commercial. The court recognized that “[i]f the literal import of the words were all that mattered, this celebratory tribute would be noncommercial.” But Jewel’s ad served two functions: (1) congratulating Jordan, and (2) enhancing Jewel’s brand by associating itself with Jordan in the minds of basketball fans and Chicago consumers. Given that a “common-sense distinction” between commercial and noncommercial speech was proper, in this context, one had to account for the varied, often subtle forms of modern advertising. Thus, an ad’s failure to refer to a specific product is relevant, but not dispositive, according to the Seventh Circuit. The court had no trouble answering the question, “What does [the ad] invite the readers to buy?” The answer: “Whatever they need from a grocery store.” In essence, it found that this kind of brand advertising is not any less commercial than product advertising, since its “commercial nature is readily apparent” and it “aimed at promoting goodwill for the Jewel-Osco brand by exploiting public affection for Jordan.” That is, however sincere its congratulations, Jewel still “had something to gain” from the ad.
Businesses might well wonder what kinds of corporate speech do not fit within this last description. In an interesting passage, the court distinguished between the Jordan “superstar” context and the context of an ad promoting a local community group. The opinion draws an intriguing distinction: the Jewel ad could only be seen as benefiting Jewel, since Jordan needed no additional promotion. A less well-known group, on the other hand, might well receive benefits from an ad, potentially permitting proper classification as noncommercial speech.
