COURT HEARS ARGUMENTS IN TOBACCO AD CASE

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WASHINGTON (AdAge.com) -- The U.S. Supreme Court today heard oral arguments on two Massachusetts cases that could be the biggest First Amendment cases of the court's current term and the ones with the greatest impact on advertising restrictions.

In Lorillard Tobacco Co. vs. Reilly and Altadis USA vs. Reilly, tobacco makers are suing State Attorney General Thomas F. Reilly, challenging the state's 1999 attempt to categorize some tobacco marketing activities as "unfair or deceptive acts or practices" and impose broad curbs on advertising.

Advertising groups are hoping that the cases would be a vehicle for the high court to strengthen the industry's First Amendment protection. But during the oral arguments the justices questioned attorneys about the much more limited issue of whether the state's curbs on store signs and point-of-sale advertising violated a federal law that preempted states from regulating cigarette advertising.

1,000 feet from schools
The state bans almost all tobacco-related signs that are within 1,000 feet of a school or playground -- even those inside stores if they can be seen from outside (a restriction that tobacco companies say would bar billboards in 90% of populated areas). The state also requires cigar makers to devote 25% of ads and packaging to warnings, bans tobacco-related giveaways and dictate store POS to be at least five feet off the floor so they are less likely to be seen by children.

The tobacco companies argued in court briefs that the federal Cigarette Labeling and Advertising Act of 1969 prohibits the state from placing curbs on cigarette advertising, and that the state violated the First Amendment. They also claim that the state had failed to show either that the restrictions would be effective in reducing teen smoking or that there weren't other means available to achieve the same result without restricting speech.

There was a little discussion of the First Amendment today during oral arguments. Most questions from the bench focused on whether Massachusetts was barred from regulating cigarett advertising.

Several justices noted that while the 1969 law had banned tobacco makers from advertising on TV, it also set limits to state regulation of health and safety claims. As such, they questioned whether Massachusetts had gone too far.

A 'vice' exception
Justice Ruth Bader Ginsburg suggested that because of the harm tobacco does, it might be acceptable to put some curbs on tobacco advertising -- in effect creating a "vice" exception to the First Amendment.

"You are dealing with a commodity like no other," she said. "Can't you make a distinction with respect to dangerous product?"

Justice Anthony Scalia and Clarence Thomas questioned how the court could only limit tobacco ads.

Justice Thomas noted that some people criticize McDonald's for offering junk foods and questioned whether states could bar McDonald's from advertising.

Justice Scalia, noting that Massachusetts had tried to ban retailers from even saying they were selling tobacco on any sign outside the store, asked whether, using the same logic, states could also ban adult book stores from putting signs in their windows saying they sold adult books.

After the arguments, lawyers for both sides said it wasn't clear the impact of the court's concentration on preemption issues, especially because Massachusetts' regulation applied to cigarettes, smokeless tobacco and cigar companies, and the preemption issue only applies to cigarettes.

Copyright April 2001, Crain Communications Inc.

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