Interagency Committee on Smoking and Health
Meeting Summary: October 26, 2000
Framework Convention on Tobacco Control
Advertising Issues—Legal Perspective
Thomas Perrelli, Esquire, Department of Justice
Mr. Thomas Perrelli from the U.S. Department of Justice spoke about the history of
restrictions on tobacco advertising and related legal issues. He indicated that a large
number of people and processes are involved with tobacco advertising and the law. State and
local officials are involved in billboard placement; the FTC has long been involved with
issues related to misleading advertising and warning labels; and states are currently
involved through the MSA without a clear ultimate impact—perhaps simply to shift advertising
dollars from one place to another. With regard to the FCTC, U.S. law must inform the
process. International treaties to which we are a party must be consistent with the U.S.
Constitution, particularly the First Amendment.
To protect minors, the current Administration has focused on imposing the most restrictive
advertising requirements possible under the Constitution. This spurred the FDA to promulgate
regulations. Tobacco advertising was considered by the Supreme Court as far back as 1932 in
upholding billboard and streetcar restrictions in Utah. The FTC in the 1950s and 1960s did a
great deal of work in building our knowledge about tobacco advertising and its impact as
well as examining some of the explicit and implicit health claims being made by the tobacco
companies in that era. Congress became involved in the 1960s and passed the 1969 Federal
Cigarette Labeling and Advertising Act, which requires warning labels on cigarette packages.
The Act preempted a number of state and local regulations on advertising. At the same time,
Congress also prohibited tobacco advertising on any medium of electronic communications
subject to the jurisdiction of the Federal Communications Commission, including television.
The statute was eventually upheld by the Supreme Court in 1971.
The renewed momentum for tobacco advertising regulation grew from two different sources:
state litigation to recover health care costs and change the way the industry markets to
children and the FDA's effort to make a case for addiction and efforts to address in a
comprehensive way marketing and promotion to children. The 1996 FDA rule banned outdoor
advertising within a thousand feet of schools and playgrounds and placed restrictions on
brand name sponsorship. Note that, although those restrictions were struck down by the
Supreme Court and the FDA was ruled not to have jurisdiction on those matters, it was not
done on First Amendment grounds. The U.S. Department of Justice believes the restrictions
under current law as well as the FDA rules restrictions are fully Constitutional.
While the FDA rule was being litigated, the first state settlement took place in July 1997.
It included a series of marketing restrictions that went beyond the FDA rule. That
settlement would have come into effect if Congress had enacted legislation giving some level
of protection from future liability to the tobacco companies. In 1998, Congressional debate
and consideration of the McCain bill took place and eventually a set of restrictions similar
to the FDA rule (but including liability protection for tobacco companies that voluntarily
restricted their advertising to a greater extent) were introduced. Ultimately, Congress did
not enact legislation and the state and tobacco companies went back to the drawing board.
Further negotiations between the states and the tobacco companies resulted in the MSA in
1998.
The Agreement allows a number of avenues for tobacco advertising, particularly in the print
medium. In addition, although the Agreement has a general provision against targeting youth,
it is likely that State Attorneys General and the tobacco companies may have different views
on the meaning of the provision. After the failure of federal tobacco legislation, the U.S.
Department of Justice began to consider whether there was a viable legal basis on which to
sue the tobacco companies under federal law. This effort resulted in the lawsuit that was
brought in September 1999. The suit seeks, among other things, additional marketing
restrictions on the sale of cigarettes. Other current activities include state and local
ordinances related to placement of certain kinds of advertising. Currently, four of five
circuit courts have ruled that local governments can regulate the placement.
Mr. Perrelli then provided an overview of legal principles currently at issue under the
commercial speech doctrine (as tested under the landmark Central Hudson case—447 US 557).
Considering tobacco advertising regulation, we need to consider whether the regulated speech
is related to an unlawful activity or is misleading and whether the government interest
asserted to regulate the speech is substantial. He believes that years spent building the
case that restricting tobacco advertising to protect youth is a compelling government
interest. Under the Central Hudson test, a restriction on commercial speech must also
directly advance the government interests asserted (states and localities have demonstrated
that keeping tobacco advertising away from children will influence smoking initiation and/or
continuation). Finally, the Central Hudson test requires that the fit between the ends and
the means of a regulation on commercial speech be reasonable. A law that bans substantially
more speech than is necessary is less likely to prevail. It is likely that we will have more
guidance in this area in the next couple of years because the Supreme Court will be
considering one of the cases involving state and local regulation of outdoor cigarette
advertising.
Thus far, the courts have found it of great significance that this was not a typical
restriction on commercial speech and that it involves regulation of the sale of a product
that is banned to children. The courts have expressed concern about children who might be
victimized by the highly addictive nature of the product and focused, among other things, on
their inability to understand the impact of starting or continuing to smoke. Finally, the
courts did not appear to be troubled that a Massachusetts ban on advertisement is very
broad, saying that there are other avenues for tobacco advertising.
Mr. Perrelli then stressed three points: legal principles will be more clear in a couple of
years; the First Amendment does leave room for a significant number of restrictions in this
area, such as those currently in the FDA rule, and the most promising areas are those
related to consent and work on the most extensive restrictions on a voluntary basis (whether
through the consent orders on which the FTC has worked or through a larger legislation
resolution, as was attempted after 12 years).
Mr. Perrelli declined to respond to a question related to cigarette advertising on the
Internet and coverage under the Federal Cigarette Labeling and Advertising Act. To a
question related to placement issues, Mr. Perrelli indicated he believed that the next set
of state and local ordinances will likely litigate whether that is permissible. In the past,
the U.S. Department of Justice has taken the position that those restrictions are
permissible. Ms. Rosso volunteered that the First Circuit Court's decision in Massachusetts
included generous language giving the state some amount of discretion in limiting in-store
displays.
Dr. Koplan asked for data on the percentage of sales of tobacco products sold in pharmacies
but Ms. Rosso indicated that there are no national data that would provide information at
that level. However, the FDA Web site may include information on a non random sample of
stores, looking at what places are more likely to sell to children. Dr. Chaloupka mentioned
that, in his experience, pharmacies are the least likely of all types of stores to make use
of advertising and promotion. It was pointed out that, under economic (and not speech)
regulation, certain products/services cannot be sold in the same place. A brief discussion
on freedom of religion and of advertising and speech ensued but Mr. Perrelli indicated this
is not an area that has received a great deal of attention.
To a question about the U.S. Department of Justice lawsuit against the tobacco
manufacturers, its dependence on Congressional funding, and predictions with the change of
administration, Mr. Perrelli indicated that without the appropriate funds the lawsuit will
have to be dismissed.
To a question about the FCTC and how strong a Convention the United States could sign on to,
Mr. Perrelli indicated that we could go as far as possible to the extent permitted under
domestic law. Dr. Novotny stressed that this has not prevented us from taking a strong
position and very few countries (mainly third world ones) are advocating for complete bans
in advertising. Even if some of the protocols include language with which we cannot agree,
that should not prevent us from signing the FCTC, Dr. Novotny told the group. Mr. Perrelli
declined to answer a question related to a total ban on advertising and promotion of tobacco
products and its ability to meet the Central Hudson test.
At the conclusion of the formal presentations, Dr. Satcher invited public comments. None
were made. He thanked the speakers, committee members, and participants for their
contributions to the meeting. The meeting was adjourned at 1 p.m.
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