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20TOBACCOOUTLETBUSINESSJANUARYFEBRUARY2012UpdateonFDAGraphicCigaretteWarningsByThomasA.BriantExecutiveDirectorNationalAssociationofTobaccoOutletsOnNovember72011U.S.DistrictCourtJudgeRichardLeonissuedanordergrantingvetobaccomanufacturersapreliminaryinjunctionandastayagainsttheimplementationoftheFDAx19snewtextandgraphicimagewarningsforcigarettepackagescartonsandadvertisements.ThevemajortobaccomanufacturersthatbroughtthelawsuitagainsttheFDAincludeR.J.ReynoldsTobaccoCompanyLorillardTobaccoCompanyCommonwealthBrandsInc.LiggettGroupLLCandSantaFeNaturalTobaccoCompanyInc.ThispastJunetheFDApublishedaFinalRulerequiringninenewtextwarningsandgraphicimagestobeprintedonarotatingbasisonthetop50percentofthefrontandbackofcigarettepackagestheleft50percentofthefrontandbackofcigarettecartonsandthetop20percentofallprintedcigaretteadvertisements.ThenewtextandgraphicimagewarninglabelsweretotakeeffectbySeptember222012.HoweverinhisopinionJudgeLeonruledthatthemanufacturersdemonstratedasubstantiallikelihoodthattheywillprevailonx1cthemeritsoftheirpositionthatthesemandatorygraphicimagesunconstitutionallycompelspeechandthattheywillsufferirreparableharmabsentinjunctivereliefpendingajudicialreviewoftheconstitutionalityoftheFDAx19srule.x1dCompelledSpeeChJudgeLeondeterminedthatthetobaccomanufacturerswouldlikelyprevailinthelawsuitforseveralreasons.ThemainreasonisthattheFirstAmendmenttotheU.S.Constitutionprotectsfreespeechincludingcommercialspeechsuchasadvertising.Thisconstitutionalprotectionextendstoboththerighttospeakfreelyandtherighttonotspeakatall.Whenthegovernmentmandatesthatapersonorcompanymakeastatementthattheindividualorbusinesswouldnototherwisemakeiftheyhadachoicethistypeofspeechisknownasx1ccompelledspeechx1dandispresumptivelyunconstitutional.Inthiscasethejudgefoundthatthenewtextandgraphicwarningimagesweredesignedtocompelthemanufacturerstox1cspeakx1dtoconsumerssothattheywouldquitorneverstartsmokingratherthantojustsimplyprovidefactualhealthinformation.IrreparableharmThejudgealsofoundthatthemanufacturerswouldsufferirreparableharmasaresultoftheFDAx19smandateforthegraphicimagewarnings.Thiswouldoccurbecausethecompanieswouldberequiredtospendapproximately20milliontoredesignexistingpackagingandincurthousandsofemployeehourstocomplywiththenewwarningrequirements.MostimportantlythejudgenotedthattheU.S.SupremeCourthasruledthatthelossofFirstAmendmentfreespeechrightsevenforashortperiodoftimeconstitutesirreparableharm.FdaappealOnNovember292011theFDAappealedJudgeRichardLeonx19srulinggrantingatemporaryinjunctionagainsttheFDAx19sgraphiccigarettehealthwarningimagestotheU.S.CircuitCourtofAppeals.GenerallytheappealsprocessfortheU.S.CircuitCourtofAppealswillinvolvetheFDAandthetobaccomanufacturerssubmittingappellatebriefsarguingtheirrespectivesidesofthecase.BesidesthebriefstobesubmittedbytheFDAandthemanufacturersattorneygeneralsfrom24statesledax1cfriendofthecourtx1dbriefonDecember23rdinsupportoftheFDAgraphicimagehealthwarnings.TheattorneysgeneralargueintheirbriefthattheFirstAmendmentdoesnotpreventtheFDAfromrequiringgraphicwarninglabelsonaddictiveproducts.TheU.S.CircuitCourtofAppealswillscheduleanoralargumentfortheFDAandthetobaccomanufacturerstopresenttheircaseinfrontofapanelofCircuitCourtjudges.ThisappealsprocessattheU.S.CircuitCourtofAppealslevelmaytakeupto18to24months.ThismeansthattherewillbeadelayinthescheduledimplementationdateofSeptember222012fortheFDAx19sgraphiccigarettelabels.TOBTRADETALKByThomasBrianT