Lorillard Sues FDA Over Cigarette Warnings

NEW YORK ( TheStreet) -- Lorillard ( LO), Reynolds American ( RAI) unit R.J. Reynolds and other top tobacco makers are suing the U.S. Food and Drug Administration, alleging that new graphic labeling rules are unconstitutional.

Lorillard, Reynolds, Liggett Group and Imperial Tobacco Group's ( ITYBY) Commonwealth Brands said the recently announced warning labels, which depict the negative health effects of smoking and will be required on all cigarette packages by Sept. 22, 2012, violate their right to free speech under the First Amendment, according to a complaint filed with the U.S. District Court in Washington this week.

Lorillard said requiring cigarette makers to display one of the nine new warning labels on each package is "an unconstitutional way of forcing tobacco manufacturers to disseminate the government's anti-smoking message."

"The regulations violate the First Amendment," said Lorillard's attorney, Floyd Abrams, a partner in the New York law firm of Cahill Gordon & Reindel. "The notion that the government can require those who manufacture a lawful product to emblazon half of its package with pictures and words admittedly drafted to persuade the public not to purchase that product cannot withstand constitutional scrutiny. The government can engage in as much anti-smoking advocacy as it chooses in whatever language and with whatever pictures it chooses; it cannot force those who lawfully sell tobacco to the public to carry that message, those words, and those pictures."

The graphic labels, which tobacco makers will be required to put on cigarette packs sold in the United States next year, depict disturbing images such as a corpse, diseased lungs, rotting teeth, a man suffering a stroke and another of a man exhaling smoke through a hole in his neck. The new labels, which the FDA unveiled in June, are expected to prompt 213,000 people to quit smoking by 2013, the government agency said.

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After Oct. 22, 2012, cigarettes without the new warning labels won't be allowed to be sold, marking the biggest overhaul of tobacco sale regulations in 25 years. Nine images were selected in total by the FDA, out of 36 proposed last year.

Similar to cigarette labeling laws enacted in Canada, the U.K. and Brazil years ago, one of the nine graphic images, paired with explicit text such as "smoking can kill you," must cover the top half of both the front and back of cigarette packs. In cigarette advertisements, the graphic and matched text must take up at least 20% of the ads.

"These labels are frank, honest and powerful depictions of the health risks of smoking, and they will help," Health and Human Services Secretary Kathleen Sebelius told Bloomberg recently. "These labels will encourage smokers to quit and prevent children from smoking."

Reynolds American and Lorillard have argued that, to "confiscate the top 50% of both sides of cigarette packaging and mandate shocking color graphics" is unconstitutional, according to a brief filed with the U.S. Court of Appeals for the Sixth Circuit in Cincinnati in September.

Altria Group ( MO), owner of Philip Morris USA, is not involved in the lawsuit.

The Centers for Disease Control and Prevention in Atlanta estimated that 46 million people, or 20% of American adults, are cigarette smokers, a practice that is said to kill around 443,000 people each year.

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-- Written by Miriam Marcus Reimer in New York.

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