U.S. appeals court strikes down FDA tobacco warning label requirement

(CBS/AP) Tobacco companies won't have to put nine new graphic warning labels from the Food and Drug Administration on cigarette packs this year after all, an appeals court ruled Friday.

The U.S. Court of Appeals in Washington announced it upheld a decision barring the federal government from requiring tobacco companies to put large graphic health warnings on cigarette packages to show that smoking can disfigure and even kill people.

Pictures: 27 cigarette warning labels nixed by the FDA
Pictures: Cigarette warning labels
Pictures: Australia's graphic tobacco warning labels

In a 2-1 decision, the U.S. Court of Appeals in Washington affirmed a lower court ruling that the requirement ran afoul of the First Amendment's free speech protections. The appeals court tossed out the requirement and told the FDA to go back to the drawing board.

Some of the nation's largest tobacco companies, including R.J. Reynolds Tobacco Co., sued to block the mandate to include warnings to show the dangers of smoking and encouraging smokers to quit lighting up. They argued that the proposed warnings went beyond factual information into anti-smoking advocacy. The government argued the photos of dead and diseased smokers are factual.

The nine graphic warnings proposed by the FDA include color images of a man exhaling cigarette smoke through a tracheotomy hole in his throat, and a plume of cigarette smoke enveloping an infant receiving a mother's kiss. These are accompanied by language that says smoking causes cancer and can harm fetuses. The warnings were to cover the entire top half of cigarette packs, front and back, and include the phone number for a stop-smoking hotline, 1-800-QUIT-NOW. The labels were mandated to appear on cigarette packs beginning in September, 2012.

In the majority opinion, the appeals court wrote that the case raises "novel questions about the scope of the government's authority to force the manufacturer of a product to go beyond making purely factual and accurate commercial disclosures and undermine its own economic interest - in this case, by making `every single pack of cigarettes in the country (a) mini billboard' for the government's anti-smoking message."

The court also wrote that the FDA "has not provided a shred of evidence" showing that the warnings will "directly advance" its interest in reducing the number of Americans who smoke.

Tobacco companies increasingly rely on their packaging to build brand loyalty and grab consumers - one of the few advertising levers left to them after the government curbed their presence in magazines, billboards and TV.

"It's a significant vindication of First Amendment principles," said Floyd Abrams, an attorney representing Lorillard Tobacco. "There's never been any doubt that the government could require warnings on products that can have dangerous results. And what the court is saying is that there are real limits on the ability of the government to require the manufacturer of a lawful product to denounce the product in the course of trying to sell it."

The FDA declined to comment on pending litigation and the Justice Department said it would review the appeals court ruling. Public health groups are urging the government to appeal.

Joining North Carolina-based R.J. Reynolds, owned by Reynolds American Inc., and Lorillard Tobacco, owned by Lorillard Inc., in the lawsuit are Commonwealth Brands Inc., Liggett Group LLC and Santa Fe Natural Tobacco Company Inc.

Richmond, Va.-based Altria Group Inc., parent company of the nation's largest cigarette maker, Philip Morris USA, which makes the top-selling Marlboro brand, is not a part of the lawsuit.

The case is separate from a lawsuit by several of the same tobacco companies over the 2009 Family Smoking Prevention and Tobacco Control Act, which cleared the way for the more graphic warning labels and other marketing restrictions. The law also allowed the FDA to limit nicotine and banned tobacco companies from sponsoring athletic or social events or giving away free samples or branded merchandise.

In March, a federal appeals court in Cincinnati ruled that the law was constitutional. The contradiction of the decisions could mean the case would be settled by the U.S. Supreme Court.

Across the world, Australia's highest court recently upheld the world's toughest laws on cigarette promotion, which force companies to replace their traditional logos and branding with government-approved images of cancer-ridden mouths and blinded eyeballs and warnings.