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US: Tobacco Firms' Suit Rejected

February 22nd, 2006

The Supreme Court on Tuesday rejected a free-speech challenge by two tobacco companies over California's anti-smoking ads.

Reynolds American Inc.'s R.J. Reynolds Tobacco unit and Loews Corp.'s Lorillard Tobacco unit argued that the ads were unconstitutional because the tobacco companies were being forced to pay for advertisements that criticized the industry.

Under Proposition 99, which voters approved in 1988, the state imposes a 25-cent-a-pack tax on cigarettes and uses the funds for smoking prevention and education efforts. The state spends about $25 million a year on the advertisements.

In one commercial, children playing in a schoolyard look up while cigarettes rain down on them. A narrator asks, "The tobacco industry: How low will they go to make a profit?"

A federal judge dismissed the lawsuit in a decision upheld by a federal appeals court in San Francisco, which ruled that the ads did not violate the free-speech rights of the companies.

Appealing to the Supreme Court, the companies said the 1st Amendment prohibited the government from imposing a tax that applied "solely to a discrete, disfavored group" and then using the money to fund government speech attacking the same group that is subject to the tax.

The high court denied the appeal without any comment or recorded dissent.

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