REBUFFING CLINTON, JUSTICES LIMIT F.D.A. ON TOBACCO

WASHINGTON, March 21 - The Supreme Court today dealt a sharp blow to the
Clinton administration's efforts to curb smoking, ruling 5 to 4 that the
Food and Drug Administration had never received authority from Congress to
regulate tobacco products.

The decision, rejecting rules proposed by the agency in 1995 to restrict
the marketing of cigarettes to children and teenagers, hands the question
of national tobacco regulation back to Congress. An effort to confer
jurisdiction on the Food and Drug Administration won some bipartisan
support in Congress in 1998 but became mired in a broader debate over
whether to give the cigarette industry immunity from damage suits.

The ruling today was notable for the strong language that both the majority
and the dissenting opinions used in describing the dangers of smoking,
which causes some 400,000 deaths a year in the United States. Although
essentially a straightforward ruling on a question of administrative law,
the decision paid more than usual attention to the underlying policy
issues, as if in recognition that the debate will continue elsewhere.

[The ruling, essentially a decision to keep the tobacco industry alive, had
an immediate effect on the industry, News Analysis. It also prompted
immediate comments from Vice President Al Gore and Gov. George W. Bush.]

Justice Sandra Day O'Connor, who said in her majority opinion that the food
and drug agency had "amply demonstrated" that tobocco use was "perhaps the
single most significant threat to public health in the United States,"
sounded at times almost apologetic for her conclusion that the Food, Drug
and Cosmetic Act, which the agency used to assert jurisdiction, could not
be stretched far enough to accommodate the regulations.

In the dissenting opinion, Justice Stephen G. Breyer said that given
nicotine's highly addictive nature and the "life-threatening harms" of
smoking, the Food and Drug Administration's authority should be interpreted
in light of "its basic purpose - the overall protection of public health."
He said the court should avoid an "overly rigid" interpretation of the
Food, Drug and Cosmetic Act "that is divorced from the statute's overall
health-protecting purposes."

Dr. David A. Kessler, the former Food and Drug Administration commissioner
who led the agency in reversing its long-held position that it could not
regulate tobacco, said today that the loss in court had "in some ways moved
the issue forward" through the justices' recognition of the dimensions of
the problem as a public health issue. "We're in a very different place than
we were five years ago," Dr. Kessler, now the dean of Yale Medical School,
said in an interview.

The majority today applied a settled principle of administrative law: if
Congress has spoken clearly on a question of an agency's jurisdiction, or
lack of jurisdiction, Congress has the last word. "The F.D.A.'s claim to
jurisdiction contravenes the clear intent of Congress," Justice O'Connor said.

The dispute between the majority and dissent was over the clarity of
Congress's intent, which the dissent found to be much less evident.

The decision upheld a 1998 ruling by the United States Court of Appeals for
the Fourth Circuit, in Richmond. Four cigarette manufacturers - the Brown
and Williamson Tobacco Corporation, a division of British American Tobacco
P.L.C.; the Philip Morris Companies; the Lorillard Tobacco Company, which
is a division of Loew's, and the United States Tobacco Company - along with
the National Association of Convenience Stores had gone to federal court to
challenge the regulations as soon as the food and drug agency formally
issued them in 1996. A 1997 ruling by Judge William L. Osteen Sr. of
Federal District Court in Greensboro, N.C., upheld the agency's
jurisdiction over controlling children's access to cigarettes, but struck
down the regulations' restrictions on advertising and promotion.

Under the authority of the district court's decision, the agency has since
1997 been spending about $34 million a year on contracts with the 50 states
to help monitor compliance with state laws barring the sale of cigarettes
to those under 18. The agency began today to send letters to the states
announcing an "orderly shutdown" of the compliance program in light of the
Supreme Court ruling.

The majority opinion today, Food and Drug Administration v. Brown &
Williamson, No. 98-1152, was joined by Chief Justice William H. Rehnquist
and by Justices Antonin Scalia, Anthony M. Kennedy and Clarence Thomas.
Justices John Paul Stevens, David H. Souter and Ruth Bader Ginsburg joined
Justice Breyer's dissenting opinion.

This particular 5-to-4 split has become familiar in the last few years,
with the more conservative justices on one side and the relatively more
liberal ones on the other. Yet there was nothing overtly ideological about
the essentially historical question of whether a 1938 statute, or any
subsequent legislative developments, conferred jurisdiction on a federal
agency.

But a distrust of the power of administrative agencies has long been a
watchword of legal conservatives, and this case reached the court within a
broader context of renewed ferment over the constitutional boundaries of
the modern administrative state.

The federal appeals court here issued a startling decision last year,
holding that in authorizing the Environmental Protection Agency to issue
certain regulations under the Clean Air Act, Congress engaged in an
unconstitutional "delegation" of its legislative powers to an executive
branch agency. As the justices were undoubtedly aware, the Clinton
administration has recently asked them to review that ruling.

In his dissenting opinion today, Justice Breyer appeared to go out of his
way to refute any suggestion that an agency's action is insulated from
political accountability. "Insofar as the decision to regulate tobacco
reflects the policy of an administration, it is a decision for which that
administration, and those politically elected officials who support it,
must (and will) take responsibility," Justice Breyer said, adding:

"I do not believe that an administrative agency decision of this magnitude
- - one that is important, conspicuous, and controversial - can escape the
kind of public scrutiny that is essential in any democracy."

The Food and Drug Administration regulations were based on the premise that
most people who become lifelong smokers start smoking in their early teens.
To discourage teenage smoking, the regulations prohibited the sale of
cigarettes to those under 18; the distribution of free samples or the sale
of packages of fewer than 20 cigarettes; and the use of self-service
displays or vending machines except in adults-only locations.

Retailers were required to verify, through photo identification, the age of
all purchasers younger than 27. There were also restrictions on outdoor
advertising near playgrounds and schools and on promotional items and
sponsorship of various events by cigarette companies.

The agency claimed its authority under the Food, Drug and Cosmetic Act,
which gives it jurisdiction to regulate "drugs" and "devices." Drugs are
defined in the 1938 law as articles, other than food, "intended to affect
the structure or any function of the body." Nicotine was such a substance,
the agency said, and cigarettes were devices for delivering nicotine.

The agency's assertion of authority over tobacco in 1995 came after decades
of disclaiming such jurisdiction. The agency justified its about-face by
pointing to newly disclosed internal cigarette industry documents showing
that the industry understood and intended to achieve nicotine's effects -
thus meeting for the first time the statute's requirement that any effect
be intentional.

The tobacco industry objected immediately that Congress had never meant to
give the Food and Drug Administration jurisdiction over tobacco. Parsing
the statute, industry lawyers provided a syllogism that the majority today
found persuasive. The agency's core mission, the industry argued, was to
make sure that drugs reaching the market were safe and effective.

Because the agency found cigarettes to be unsafe, it was required under the
law not simply to regulate them but to ban them. But, the argument went on,
Congress clearly did not intend that result, because since 1938, it has
passed a half-dozen measures dealing with smoking that were obviously based
on the assumption that cigarettes would continue to be marketed. The notion
that the agency could treat tobacco as it would an ordinary drug was simply
misbegotten, the industry said.

Adopting that argument, Justice O'Connor said today that "the inescapable
conclusion is that there is no room for tobacco products" within the law's
structure. "If they cannot be used safely for any therapeutic purpose, and
yet they cannot be banned, they simply do not fit," she said.

Where the majority found certainty, the dissent found Congress's treatment
of smoking to be "critically ambivalent" in several important respects. For
administrative law purposes, the difference between Congressional clarity
and ambiguity is crucial, because once the court decides that Congress has
spoken ambiguously about an agency's authority, its precedents require
judges to defer to the agency's view of the matter.