Federal judge - upheld most of law that regulates tobacco but struck down limits on advertising..

January 5, 2010 - U.S. District Judge Joseph H. McKinley Jr. upheld most of a sweeping federal law limiting the marketing of cigarettes through sponsorships and on merchandise, but struck down limits on advertising and labels that tobacco companies said violated their free speech rights.

A new law giving the U.S. Food and Drug Administration jurisdiction over tobacco can’t prevent companies from using color and graphics to advertise their products.

Judge McKinley in Bowling Green, Kentucky ruled that provisions of the Family Smoking Prevention and Tobacco Control Act, signed into law by President Barack Obama in June, violate advertisers’ free-speech rights.

The judge rejected a ban on the use of color and graphics in tobacco labels and advertising, which the companies said violated the U.S. Constitution. At the same time, he sided with the government on limits on tobacco-branded merchandise and sponsorships, rejecting the companies' argument that such marketing could be targeted specifically to adults and not children.

McKinley, whose ruling was made public today, also blocked a provision of the law barring statements that tobacco products are less harmful because they are regulated by the FDA or because they comply with agency requirements. The judge rejected cigarette makers’ bid to strike other provisions of the law.

Reynolds, the second-largest U.S. cigarette maker, and Lorillard Tobacco Co., the third-biggest, sued in August to block the marketing restrictions. They claimed the law went far beyond discouraging children from smoking and left them “virtually no means” to communicate with adult smokers and other tobacco users. Other companies seeking to void the law included included cigarette maker Commonwealth Brands Inc, Conwood Co, tobacco retailer Discount Tobacco City & Lottery Inc, and National Tobacco Co. (R.J. Reynolds, Lorillard, others file suit claiming law restricts communication..)

Altria Group Inc.’s Philip Morris USA, which makes half of the cigarettes sold in the U.S., supported the FDA regulation and endorsed the law. It wasn’t involved in the suit.

FDA spokeswoman Kathleen Quinn said the agency was pleased with the ruling, which she said "will allow us to continue, in large part, with the implementation of the tobacco control act to protect public health. The agency will thoroughly review the opinion."

David Howard, an R.J. Reynolds spokesman, said the company was pleased that parts of the law were found unconstitutional and is considering its options. Howard said the company continues to believe the other challenged provisions of the law are unconstitutional and is considering its options.

Frank Hinton, owner of Discount Tobacco, said: "To tell me how I can advertise products on the inside of my store, that's just not right."

In an e-mail a Lorillard spokesman, Michael Robinson stated: "We are gratified that the court upheld the free speech rights to use color and graphics in our advertising to communicate with our adults consumers."

Commonwealth Brands, Inc., the fourth largest tobacco manufacturer in the U.S. released a statement today, January 5th in response to the Federal Court's decision to throw out a recent ban that was placed on the tobacco industry's advertising rights. Rob Wilkey, Senior Legal Counsel for Commonwealth Brands stated: "We are delighted with today's ruling. We have always strongly believed that the advertising ban violated our First Amendment rights and are very pleased that the Court agreed. It is a fundamental right that we be able to communicate with our adult consumers and today's ruling will ensure this." (Commonwealth Brands Delighted With Ruling on FDA Challenge, SOURCE: Commonwealth Brands, Inc., PR Newswire, 1/5/2010)

In his 47-page opinion, McKinley wrote that the tobacco companies are "clearly right" in arguing that some of the labeling at issue, such as Conwood's sketch of its original factory or the color of Lorillard's Newport menthol packaging, were not what Congress was targeting in trying to thwart improper advertising toward children.

"The act's 'blanket ban' on all uses of color and images in tobacco labels and advertising has a 'uniformly broad sweep'" too wide for what Congress intended, he wrote.

But McKinley also upheld parts of the law that require large health warnings on cigarette packs and preclude tobacco companies from distributing such things as caps, t-shirts and sporting goods with tobacco names or logos.

Citing Congressional findings, he said "there is no way to limit the distribution of these items to adults only" and that, if there were, adults would become "walking advertisements" for the idea that "tobacco use is widely accepted, which is extremely important to children and adolescents."

Matthew Myers, president of the Campaign for Tobacco-Free Kids, in a statement called the ruling "an important step toward ending the special protection the tobacco industry has enjoyed for too long and finally regulating tobacco products to protect our children and the nation's health."

The case is Commonwealth Brands Inc vs. United States, U.S. District Court, Western District of Kentucky (Bowling Green), No. 09-117.

Back in November 2009 Judge McKinley turned down a request by the R.J. Reynolds and others to immediately halt enforcement of new federal regulations on tobacco products.

References: Ban on Color and Graphics in Tobacco Ads Thrown Out (Update1) by Bob Van Voris, -Editors: Michael Hytha, Peter Blumberg, Business Week - Bloomberg.com, 1/5/2010; U.S. judge strikes part of tobacco ad, label law by Jonathan Stempel and Jeremy Pelofsky, WHTC.com - Reuters, 1/5/2010; Ban on Color and Graphics in Tobacco Ads Thrown Out (Update2) by Bob Van Voris (rvanvoris@bloomberg.net), Bloomberg.com, 1/5/2010.

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More - Judge McKinley's ruling turns down request to immediately halt enforcement of new tobacco federal regulations..;
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