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Business & Technology

Major cigarette makers sue over new tobacco law

August 31st, 2009 12:00 am by Associated Press


RICHMOND, Va. — Two of the three largest U.S. tobacco companies filed suit Monday to block marketing restrictions in a law that gives the U.S. Food and Drug Administration authority over tobacco, claiming the provisions violate their right to free speech.


R.J. Reynolds Tobacco Co., maker of Camel cigarettes, and Lorillard Inc., which sells the Newport menthol brand, filed the federal lawsuit with several other tobacco companies.


It is the first major challenge of the legislation passed and enacted in June, and a lawyer for tobacco consumers doubted the lawsuit will be successful.


The tobacco makers claim provisions of the law “severely restrict the few remaining channels we have to communicate with adult tobacco consumers,” Martin L. Holton III, senior vice president and general counsel for Reynolds, said in a statement.


The Family Smoking Prevention and Tobacco Control Act gives the FDA authority over tobacco for the first time and lets the agency reduce nicotine in tobacco products, ban candy flavorings and block labels such “low tar” and “light.” Tobacco companies also must put large graphic warnings over any carton images.


The companies say in their lawsuit that the law, which takes full effect in three years, prohibits them from using “color lettering, trademarks, logos or any other imagery in most advertisements, including virtually all point-of-sale and direct-mail advertisements.” The complaint also says the law prohibits tobacco companies from “making truthful statements about their products in scientific, public policy and political debates.”


The tobacco makers say the new mandated health warnings for cigarettes would relegate the companies’ branding to the bottom half of the cigarette packaging, making it “difficult, if not impossible, to see.”


The lawsuit doesn’t challenge the decision to give the FDA authority over tobacco products, and Reynolds spokesman David Howard said the company opposes only portions of the law.


Joining in the suit filed in U.S. District Court in Bowling Green, Ky., are: National Tobacco Co., Discount Tobacco City & Lottery Inc., and Kentucky-based Commonwealth Brands, which is owned by Britain’s Imperial Tobacco Group PLC.


“We believe that many of the provisions within the Act violate our constitutional rights and are not reasonably related to the goal of reducing youth access to tobacco products,” Jonathan Cox, president and chief executive of Commonwealth Brands said in a statement.


FDA spokeswoman Kathleen Quinn said the agency does not comment on pending litigation.


The tobacco makers name the FDA, the government and individual officials as defendants in the lawsuit, which seeks to put portions of the law on hold while the case is heard. Ultimately, they want the marketing provisions stripped from the law.


“My expectation is that this lawsuit will be ultimately unsuccessful,” said Ed Sweda, a lawyer for the Tobacco Products Liability Project in Boston, pointing to previous laws limiting cigarette advertising and marketing that have been in place for more than 40 years.


Floyd Abrams, a lawyer representing Lorillard in the case, said he was confident the suit would be successful.


“Some of these regulations go so far in the direction of stifling the entirely lawful speech of Lorillard to its customers that it violates the First Amendment,” he said.


The law doesn’t let the FDA ban nicotine or tobacco, but the agency will be able to regulate what goes into tobacco products, publicize those ingredients and prohibit certain marketing campaigns, especially those geared toward children.


Richmond, Va.-based Altria Group Inc., parent company of the nation’s largest tobacco maker, Philip Morris USA, supported the bill, saying the company backs tough but fair regulation.


Altria’s chief rivals — No. 2 Reynolds American Inc., parent company of R.J. Reynolds, and No. 3 Lorillard, both based in North Carolina — opposed the bill, saying FDA restrictions on new products would lock in Altria’s share of the market. Altria’s brands include Marlboro, which held a 41.2 percent share of the U.S. cigarette market in the second quarter, according to data from Information Resources Inc.


Altria spokesman David Sylvia said the company has not yet reviewed the lawsuit and would not comment.


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