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WASHINGTON -- In a landmark ruling rebuffing the tobacco industry's main legal defense against government controls on nicotine, a federal judge upheld yesterday the power of federal officials to regulate cigarettes and chewing tobacco.

But at the same time, the judge agreed with the industry's claim that the U.S. Food and Drug Administration has no power to limit how cigarettes and smokeless tobacco are advertised or promoted.

The decision, sure to be appealed by both sides, left the industry and its critics in this situation: The FDA may give sweeping orders to the industry on how its products are made and put on the market, but cannot limit how it promotes their sale by billboards, magazine advertising, giveaways and promotional events.

President Clinton, lauding the decision by U.S. District Judge William L. Osteen Sr. of Greensboro, N.C., called it "a monumental first step in what we always knew would be a long, tough road, and we are ready to keep pushing on."

In an effort to stop children from beginning or continuing to smoke, the FDA issued sweeping regulations last August to curb industry attempts to appeal to minors as actual or potential smokers or users of chewing tobacco.

The FDA rules are based on its conclusion that cigarettes and chewing tobacco are devices for delivering a harmful drug -- nicotine -- into the human body, a health risk no minor should be allowed to take. Osteen upheld the FDA's power to make that finding.

The industry countered with wide-ranging lawsuits, claiming that the FDA has no power at all over tobacco. Industry lawyers specifically chose Osteen's court, in the nation's largest tobacco-producing state, as the site for their challenge.

Many anti-smoking advocates voiced surprise at how much they had won in the decision. They said the ruling would embolden their resistance to industry demands in continuing negotiations over a nationwide settlement of tobacco's legal woes. Those talks were in recess yesterday.

William D. Novelli, president of Campaign for Tobacco-Free Kids, said the tobacco companies "lost on their home turf, in a court they chose, and on the most fundamental issue -- FDA authority to regulate tobacco."

Jennie R. Cook, incoming chairwoman of the board of directors of the American Cancer Society, said the settlement negotiations should go forward, but argued that Osteen's decision gives anti-smoking advocates "the upper hand in these talks."

Challenging FDA authority

Tobacco manufacturers, in a joint statement, said they would pursue an appeal to further challenge the FDA's authority. But, they added, "the public policy issues at stake can be addressed most effectively" through new legislation to deal with the entire dispute surrounding tobacco.

The industry has not commented publicly on the progress of the settlement negotiations.

The joint statement yesterday chose to emphasize the industry's victory on the advertising and marketing aspects of the ruling. One industry lawyer, Charles Blixt, general counsel of R. J. Reynolds Tobacco Co., maker of Camel cigarettes, also praised that aspect of the ruling but added that "we're disappointed" with the FDA's victory on its claim of authority to regulate.

Daniel L. Jaffe, Association of National Advertisers executive vice president, said the decision "voids the Clinton administration's unprecedented plan for imposing a crushing censorship regime on tobacco advertising."

Anti-smoking forces did not seek to minimize their loss on the advertising and marketing issue. They repeated the FDA's oft-stated claim that those restrictions were necessary to make effective the other regulations curbing youth access to tobacco.

Without curbing the industry's promotion of its products, the industry may be able to get around the access limits, they argued.

"A restriction on advertising that targets kids is a critical component of any overall effort to reduce kids' smoking," said Matthew L. Myers, general counsel of the Campaign for Tobacco-Free Kids. If the FDA does not win its appeal on that issue, he said, it will have to find another way under existing law to restrict marketing, or else ask Congress for new authority.

Clinton wants prompt appeal

President Clinton ordered government lawyers to pursue a prompt appeal on the "part of the [FDA] rule not upheld."

Appeals will go to the 4th U.S. Circuit Court of Appeals in Richmond, Va. It could be months before the cases are decided. At this point, those appeals do not involve any constitutional issues; the judge said he did not have to rule on the industry's constitutional challenge to the advertising limits because he found they were beyond FDA power.

The appeals do not appear likely to affect a constitutional dispute over Baltimore's 1994 law limiting billboards and outdoor signs that advertise cigarettes. The Supreme Court is expected to act on the Baltimore case as early as next week.

Judge's reasoning

Osteen, in a blandly worded, 61-page ruling, turned aside the broadest part of the industry challenge to the Clinton administration's controls, saying simply that the FDA's claim of authority to regulate tobacco was a "reasonable" interpretation of federal drug law.

"The court finds that tobacco products fit within [the law's] definitions of 'drug' and 'device,' " the judge declared.

He added that he had found no evidence of "clear congressional intent to withhold from FDA authority to regulate tobacco products."

Although the FDA had said for years that it had no such authority, the judge said, the agency was entitled to change its mind. He found that the FDA had sufficient new evidence for concluding that nicotine was put into tobacco products with the aim of having a physical effect on the body -- thus making it a drug.

On point after point dealing with FDA power, Osteen recited the arguments made by the opposing sides, then chose to accept the FDA's claim, saying he was obliged to defer to that agency's expertise.

But, he went on to rule that the law relied upon by the FDA provided no authority for it to control tobacco advertising or marketing. The FDA's only authority for controlling how drug devices are sold or distributed, the judge said, would be to require a doctor's prescription for them, or to require that they be used only in a hospital or under medical supervision.

The ruling

The federal judge's ruling on government regulation of tobacco in order to protect minors has these effects:

The nationwide minimum age of 18 to buy cigarettes and chewing tobacco remains in force. That requires proof of age for anyone younger than 27. The rule went into effect in February.

All controls due to go into effect Aug. 28 are blocked, at least temporarily. That includes all controls on billboard advertising and magazine ads, and bans on free samples and on sale of hats, T-shirts, gym bags and other merchandise under tobacco brand names.

Controls on vending machines and self-service store displays, also due to take effect in August, were upheld by the judge, but they, too, appeared to be blocked for the time being.

Other rules due to take effect in August 1998, banning use of tobacco brand names in sponsoring sports, musical and cultural events, were struck down, but the judge did not issue a specific order to block them at this stage.

Pub Date: 4/26/97

Sun staff writer Carl M. Cannon contributed to this article.

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