The court turned a deaf ear to the tobacco industry's longstanding argument that the 1969 Federal Cigarette Labeling & Advertising Act pre-empts state legal actions.
"Congress left the states free to exercise their police power to protect minors from advertising that encourages them to violate the law," wrote Justice Armand Arabian. The judges didn't address whether the campaign targets children.
"We are quite confident that the facts will prevail and that the campaign is directed at adult smokers," said Peggy Carter, a company spokeswoman. She noted the Federal Trade Commission recently decided not to cite the campaign and "how could a California court find anything different?"
RJR attorney Joe Escher said a decision on appealing may not come for a month.
Plaintiff Janet Mangini is seeking millions of dollars from RJR, said attorney Alan Mansfield. Ms. Mangini, an attorney herself, was outraged by reports Joe Camel was nearly as recognizable to children as Mickey Mouse.
"If we win, we will seek injunctive relief to reverse the impact of the Joe Camel campaign-maybe limit the campaign or get the company to do corrective advertising aimed at kids-and we will ask for disgorgement of the illegally obtained money from the sales of Camel to kids," Mr. Mansfield said.
Besides RJR, the suit names New York agencies McCann-Erickson Worldwide and Young & Rubicam. Both created Joe Camel ads but no longer handle the account. They declined or were unavailable for comment. Mezzina/Brown now handles.
The California ruling came only weeks after the Federal Trade Commission decided against issuing a complaint against RJR for unfair and deceptive advertising.
Andrew Strenio, a Washington attorney and former FTC commissioner, considered the California ruling significant.
"This gives the tobacco industry's enemies another quiver of arrows," he said.
Wally Snyder, American Advertising Federation president, defended federal ad regulation.
"We need one standard by which national companies can base their advertising claims," Mr. Snyder said.
He also said he's troubled by a recent request from seven congressmen for a Department of Justice investigation of the tobacco industry for a variety of possible civil violations or criminal acts.
The request, confirmed by Attorney General Janet Reno, included possible application against tobacco marketers of the Racketeer Influenced & Corrupt Organizations Act, a 1970s statute aimed at drug dealers.
"I have no idea what the legal standards might be to bring that kind of action," Mr. Snyder said. "There's never been any clear sense that the courts determined if RICO would even apply to advertising cases."
Ira Teinowitz and Gary Levin contributed to this story.