("=Tobacco Cos Sue FDA Vs Law's Authority Over Their Products,"
published at 3:44 p.m. EDT, had the wrong ticker symbol for
Lorillard. The correct version follows.)
Tobacco companies including Reynolds American Inc. (RAI) and
Lorillard Inc. (LO) filed a lawsuit against the U.S. and the Food
and Drug Administration, saying that a June law imposed
"unprecedented restrictions" on First Amendment rights.
"This suit does not challenge Congress' decision to give the FDA
regulatory authority over tobacco products, nor does it challenge
the vast majority of the provisions of the new law," said Martin L.
Holton III, senior vice president and general counsel for R.J.
Reynolds. "However, the law contains provisions that severely
restrict the few remaining channels we have to communicate with
adult tobacco consumers and, in our opinion, cannot be justified on
any basis consistent with the demands of the First Amendment."
In June, legislation was passed by Congress, allowing for
restrictions on advertising and packaging. Companies had spent
millions of dollars since 1998 lobbying to block the bill.
Cigarette makers have seen sales shrink in the past decade, and
they have already been operating under some restrictions that were
part of their 1999 settlement with 46 states.
The new law, though, was backed by Altria Group Inc. (MO),
parent of industry leader Philip Morris. Critics of the bill said
it would protect the company's No. 1 status.
R.J. Reynolds said Monday the plaintiffs are seeking to protect
their First Amendment right to communicate with "adult tobacco
consumers about their products." The plaintiffs allege the law
contains "severe provisions restricting or banning truthful speech,
contrary to the requirements of the First Amendment."
The suit was filed in federal court in Kentucky. A
representative from the FDA declined to comment.
Reynolds American's shares were up a penny to $45.57 in recent
trading, while Lorillard rose 0.3% to $72.33 amid an overall down
day for equities.
-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com