U.S. judge strikes part of tobacco ad, label law

NEW YORK/WASHINGTON Tue Jan 5, 2010 4:32pm EST

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NEW YORK/WASHINGTON (Reuters) - A U.S. judge 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.

U.S. District Judge Joseph McKinley in Bowling Green, Kentucky 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.

The lawsuit arose from a sweeping law signed last June 22 by President Barack Obama and which for the first time gave the U.S. Food and Drug Administration broad powers over cigarette and tobacco products.

R.J. Reynolds Tobacco Co, a unit of Reynolds American Inc and Lorillard Inc were among companies seeking to void the law. Others included cigarette maker Commonwealth Brands Inc, Conwood Co, tobacco retailer Discount Tobacco City & Lottery Inc, and National Tobacco Co.

Altria Group Inc, which makes Marlboro cigarettes, supported the law and was not in the case.

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.

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."

Other plaintiffs were not immediately available for comment. Their main law firm declined to comment.

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.

(Reporting by Jeremy Pelofsky and Jonathan Stempel; additional reporting by Lisa Richwine in Washington, D.C. and Dhanya Skariachan and Phil Wahba in New York; editing by David Alexander and Andre Grenon)

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