NYC Tobacco Ad Mandate Takes a Hit

A federal judge has struck a blow to New York City’s campaign to require retailers to post graphic pictures wherever tobacco is sold. The win for the nation’s big tobacco manufacturers has at least one applauding.

In his decision Dec. 29, U.S. District Judge Jed S. Rakoff said that only the federal government can dictate warnings that must accompany the promotion of cigarettes, according to the Associated Press. The ruling came in a suit challenging the legality of a 2009 New York City Board of Health code change that required the display of smoking cessation signs where tobacco products are sold. Individual retailers, the New York State Association of Convenience Stores, New York State Association of Service Stations and Repair Shops, and tobacco manufacturers are party to the suit.

"We are pleased that the Court recognized that only the federal government has the power to control the content of cigarette warnings," said Murray Garnick, Altria Client Services senior vice president and associate general counsel, speaking on behalf of Philip Morris USA. "This lawsuit is not about communicating the health effects of cigarettes, which Philip Morris USA does in a number of ways, including on its Web site. Rather we brought this litigation because the city’s resolution violates Congress’ mandate giving the power to regulate content of cigarette advertising and promotion to the federal government, subject to constitutional limitations."

In his written decision, Rakoff said that the part of the federal Labeling Act (1965) dictated that no state law could impose a requirement or prohibition with respect to advertising or promotion of cigarettes. An agreement among the parties to delay enforcement of the rule was set to expire on Saturday, Jan. 1. 2011.

Floyd Abrams, a lawyer representing some store owners, said the ruling will come as a relief to retailers who had agreed to post advertisements even though they were not yet required to do so, according to the Associated Press. He argued that the city could legally post anti-smoking advertisements across the city, but could not force others to do so.

The New York City Department of Health and Mental Hygiene said in a statement that it was "disappointed in and strongly disagrees with [Wednesday’s] ruling." Nicholas Ciappetta, a city attorney who handled the case, said the city is reviewing the decision and considering its legal options.

Tobacco, Defense Stocks Trail Year-Opening Rally

In trading Monday, cigarettes & tobacco shares were relative laggards in the broadly positive session, up just 0.4% on the day. Dragging down the group were shares of British American Tobacco, down about 0.8% and shares of Altria Group down about 0.7% on the day.

Also lagging the market Monday are defense shares, up on the day by just 0.5% as a group, led down by Applied Energetics, trading lower by about 2.5% and Alliant Techsystems ( ATK - news - people ), trading lower by about 0.4%.

China's Target for Tobacco Control Not Met

Nearly five years after China's accession to the WTO Framework Convention on Tobacco Control, China is set to breach its commitment to ban smoking in all enclosed public places.

Five years ago, China promised to enforce a complete ban on smoking in all enclosed public places and workplaces by January 9, 2011.

A report by the Beijing Times says as of today, China has failed to make any state-level legislation on a smoke ban and the smoke rate of its citizens has not yet declined. Meantime, the number of victims by second-hand smoking has increased 200 million within three years.

The report says tobacco-related advertisements and delicate cigarette cases are among the factors to be blamed for the country's high smoking rate.