3 Tobacco Cos, Retailers Sue NYC Health Board Over Smoking Ads

The three biggest tobacco companies in the U.S. have joined two groups representing New York City merchants to challenge a resolution by the New York City Board of Health forcing stores to place graphic anti- tobacco campaign signs where tobacco products are offered.

Altria Group (MO) subsidiary Philip Morris USA Inc., Lorillard Inc. (LO), and Reynolds American Inc. (RAI) unit R.J. Reynolds Tobacco Co. are involved in the lawsuit with two individual New York retailers and two trade associations. They claim the new rules go against more than “four decades of exclusive federal regulation of cigarette health warnings” and violate both the New York state and U.S. Constitution.

At issue is a regulation the Department of Health and Mental Hygiene’s Board of Health adopted in September that requires all businesses selling tobacco products face-to-face to customers post tobacco health warning signs. Retailers who do not post the warning signs may be fined up to $2,000.

The suit filed Thursday in U.S. District Court claims the regulation goes against U.S. Supreme Court rulings in other tobacco cases that federal labeling regulations preempt all state and local restrictions.

The lawsuit states further the federal government specifies health warnings regarding risks be listed with tobacco, but that the advertisements the state regulation requires say little about health effects.

“The signs mandated by the resolution do not describe the risks of smoking in purely factual terms,” the suit says. “Instead, the signs force tobacco manufacturers and retailers to communicate vivid images at the point of sale and the exhortation of ‘Quit Smoking Today.'”

The suit also alleges the state rule infringes on the plaintiffs’ first amendment rights by restricting their ability “to communicate about lawful products with their adult customers” by crowding out other ads.

The companies say that in many stores it is “impossible to comply with the resolution without obscuring merchandise or moving it to less effective locations.”

When the Board adopted the rules in September it said that “reducing the burden of tobacco use is a core function of” the Board. A representative of the Board wasn’t immediately available for comment.

“Continued tobacco use among these smokers may reflect a lack of awareness and comprehension of the negative health outcomes associated with tobacco use, as well as a lack of knowledge about the availability of smoking cessation assistance,” the Board said at the time.

source: nasdaq.com

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