2nd UPDATE: Judge Leaves Bulk Of FDA Tobacco Law Intact

A federal trial judge in Kentucky left intact most of the U.S. Food and Drug Administration's new authority to regulate tobacco products but said two provisions of the law violate corporate free-speech rights.

In a 47-page order, U.S. District Judge Joseph H. McKinley Jr. threw out a provision that would ban tobacco companies from advertising tobacco products with color ads and graphics. But the court rejected most of the First Amendment challenges brought by Reynolds American Inc. (RAI) and Commonwealth Brands Inc.

The judge also threw out a provision that would ban companies from saying their tobacco products are regulated by the FDA. Public health advocates had been concerned FDA regulation of tobacco products would amount to a stamp of approval that cigarettes and other tobacco products are safe.

The companies had argued the law imposes unprecedented restrictions on their First Amendment rights and wanted the court to stop the government from enforcing certain provisions.

David Howard, a spokesman for RJ Reynolds Tobacco Co., a unit of Reynolds American, said being allowed to create ads with color and graphics was one of the biggest issues in the case for the company. Reynolds makes Camel cigarettes and is the second-leading tobacco company in the U.S.

Howard said to be able to compete in a competitive industry, tobacco companies need to be able to differentiate and "effectively communicate to adults" with color and graphic ads.

He said the company is reviewing the judge's opinion and continues to believe that the provisions the court upheld are unconstitutional.

The court left intact provisions that ban tobacco companies from marketing their products on baseball caps and T-shirts, and stops them from giving out free samples and free gifts when purchasing a tobacco product.

The judge also upheld a provision that gives federal, state and local governments authority to impose additional regulations on tobacco products and marketing beyond those specified in the law.

Matthew Myers, president of the advocacy group the Campaign for Tobacco-Free Kids, said the provision to ban color and graphics in ads is aimed at discouraging children to smoke. He said the government should appeal the judge's decision on that point and the decision that allows companies to say their products are regulated by the FDA. Overall, however, he said the judge's opinion represents a "significant victory for public health."

"This ruling is 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," he said.

-By Jared A. Favole, Dow Jones Newswires; 202.862.9207; jared.favole@dowjones.com

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