In August 2009, major tobacco companies filed a lawsuit in federal court in Western Kentucky challenging several provisions of the Family Smoking Prevention and Tobacco Control Act (the Tobacco Control Act). (For an update on the status of this case, see TALC’s FAQ, “What is the latest on the federal lawsuit filed by the major tobacco companies challenging the new Tobacco Control Act?” )
The companies charged that the Tobacco Control Act (1) violates their free speech rights, (2) takes property without paying compensation, and (3) violates their due process rights. Each of these claims is discussed in more detail below.
(1) The tobacco companies claimed that the Tobacco Control Act violates their free speech rights under the First Amendment because they say that the law prevents tobacco companies from communicating truthful information to existing and potential adult customers.
Specifically, they challenged the portions of the law that
- Ban the use of colors and graphics in labeling and advertising (allowing only “tombstone” advertising)
- Ban outdoor advertising within one thousand feet of designated locations
- Ban brand name sponsorship of sporting, cultural, and other events
- Ban the use and distribution of promotional items with a recognizable tobacco brand
- Ban the distribution of cigarette and smokeless tobacco samples
- Ban marketing tobacco with other products regulated by the FDA
- Ban promotions that offer gifts with the purchase of tobacco products
- Ban statements that a tobacco product is regulated or approved by the FDA or in compliance with FDA regulations
- Require larger warning labels on tobacco products and ads
- Allow for the sale of reduced-risk tobacco products but require the FDA to provide advance approval of labeling or advertising to convey such reduced-risk
- Authorize more stringent state or local restrictions
- Authorize additional restrictions on the time, place, and manner of cigarette advertising and promotion
For example, the tobacco companies argued that
- The ban on color graphics in advertising applies to magazines that are geared towards adult readers (e.g., ESPN the Magazine, People, Sports Illustrated),
- The mandatory warnings on product packaging prevent any meaningful messaging and hinder competition, and
- Bans on brand name event sponsorship and merchandising, sampling, and certain promotions should not apply to places and situations intended only for adults.
(2) The plaintiffs claimed that by requiring tombstone advertising and larger warning labels, the government is illegally taking their private property (e.g., advertising space, product packaging space, and effective use of registered trademarks). The tobacco companies alleged that this violates the Fifth Amendment to the U.S. Constitution that says that the government cannot take private property without paying fair compensation.
(3) The plaintiffs claimed that the Tobacco Control Act denies them “due process of law.” The Supreme Court has interpreted due process to require notice, an opportunity to be heard, and proceedings before a neutral party, such as a judge, before anyone can be deprived of life, liberty, or property. The plaintiffs argued two things:
- The law is too vague and therefore the tobacco companies have no notice about exactly what is prohibited.
- The Tobacco Control Act allows the Secretary of Health and Human Services to modify certain provisions that will automatically have the force and effect of final laws. As such, the plaintiffs believe that they are being deprived of notice and an opportunity to comment on modifications before they become final laws.
On January 5, 2010, the federal district court in Kentucky issued a decision in the case upholding most provisions of the Tobacco Control Act.
Following that decision, the tobacco companies appealed some, but not all, of the rulings to the U.S. Court of Appeals for the Sixth Circuit. The provisions of the Tobacco Control Act allowing the FDA and state and local governments to create more stringent restrictions on tobacco were not appealed, so the right to create new tobacco regulations is preserved. However, the other provisions of the Tobacco Control Act were appealed.
On March 19, 2012, the Sixth Circuit Court of Appeal issued a decision in the case, again upholding most provisions of the Tobacco Control Act. A summary of that decision is available in TALC’s FAQ, “What is the latest on the federal lawsuit filed by the major tobacco companies challenging the new Tobacco Control Act?”
The case is likely to be appealed to the U.S. Supreme Court. If the Supreme Court decides that any of the Tobacco Control Act’s provisions are unconstitutional, similar local laws across the country would become unenforceable.
For updates on the implementation of the Tobacco Control Act, please see the Federal Policies and Issues section of the California Center for Tobacco Policy & Organizing website: http://www.center4tobaccopolicy.org/federalpolicies.
 The plaintiffs who brought the lawsuit are: Commonwealth Brands, Inc. (4th largest U.S. tobacco manufacturer); Conwood Company, LLC (maker of smokeless tobacco products); Discount Tobacco City & Lottery, Inc. (has stores throughout Western Kentucky); Lorillard Tobacco Company (3rd largest U.S. tobacco manufacturer); National Tobacco Company, L.P. (smaller tobacco manufacturer); R.J. Reynolds Tobacco Company (2nd largest U.S. tobacco manufacturer). Commonwealth, Lorillard, and R.J. Reynolds have all signed the tobacco Master Settlement Agreement (See http://www.naag.org/backpages/naag/tobacco/msa/participating_manu/2009-09-15_PM_List.pdf/file_view).