FDA CAN'T REGULATE TOBACCO, COURT RULES

WASHINGTON - In a stunning victory for the tobacco industry, a federal
Appeals Court yesterday stripped the U.S. Food and Drug Administration of
its power to regulate the manufacture and sale of tobacco, leaving the
federal government little ability to deal with one of the country's major
public-health concerns.

The three-judge panel of the 4th U.S. Circuit Court of Appeals in Richmond,
Va., said in a 2-1 decision that tobacco control is the business of
Congress. The judges accused the FDA of trying to create a national tobacco
policy behind the backs of lawmakers.

"The FDA has exceeded the authority granted to it by Congress," wrote the
court. "This case is about who has the power to make this type of major
policy decision."

President Clinton quickly moved to have the case retried before the entire
Appeals Court in Richmond, which is one level below the U.S. Supreme Court.
He also used the decision to attack Republicans in Congress for defeating
an anti-smoking bill earlier this summer.

"If the leadership in Congress would act responsibly," he said, "it would
enact bipartisan comprehensive tobacco legislation to confirm the FDA's
authority and take this matter out of the courtroom."

For now, America's tobacco policy will be shaped by a sprawling legal
hodgepodge, led by the 37 state attorneys general who have lawsuits pending
against the industry. Four states - Mississippi, Florida, Texas and
Minnesota - have multibillion-dollar agreements with the industry that
include some restrictions on advertising and sales to children.

Tobacco foes said this state of affairs will be ineffective in decreasing
the number of children who smoke, the rationale behind the FDA regulations
that were struck down. About 3,000 children start smoking every day, and
1,000 become addicted in their lifetime, public-health experts estimate.

"The Appeals Court's decision today makes it even more imperative that
Congress pass comprehensive legislation to address the problem of youth
tobacco use," said Sen. John McCain, R-Ariz., who led the Senate's failed
tobacco-control effort.

The industry obviously was pleased about yesterday's ruling.

"It wasn't just about underage smoking, the way that the rules were
devised," said Nat Walker, an R.J. Reynolds spokesman in the company's
Winston-Salem, N.C., headquarters. "There was even the possibility that,
had the FDA had the authority, they could have banned the sale of
cigarettes to adults."

The Appeals Court's decision caps a stunning comeback by the tobacco
industry this year, after several years of public beatings from government
officials and the release of a stream of internal documents painting the
companies as manipulative and secretive.

In June, the Senate's tobacco bill, which would have given the FDA the
required go-ahead to regulate cigarettes, died after an intense
public-relations campaign by the industry. And the industry has won several
recent court battles, including a ruling Thursday in Florida that could
lead to the overturning of the only lawsuit the tobacco companies have ever
lost.

Anti-smoking advocates were clearly disheartened by yesterday's Appeals
Court ruling but said they would continue their decades-long fight.

"This may be a temporary victory for the tobacco industry, but it is clear
that the days of Big Tobacco's rogue, unregulated existence are numbered,"
said Bill Novelli, president of the Campaign for Tobacco-Free Kids, an
anti-tobacco group based in Washington.

The case grew out of the declaration of David Kessler, then the FDA
commissioner, in August 1996 that the agency would regulate the sale of
tobacco to minors and oversee tobacco advertising. Among other things, the
FDA required convenience stores to display signs saying cigarettes will not
be sold to minors and to check the IDs of cigarette buyers 19 to 27 years
old.

Because of legal challenges, these are the only provisions that have taken
effect, and signs warning youthful-looking buyers are common in groceries,
gas stations and convenience stores.

Other provisions of FDA regulations would have banned most cigarette
vending machines, most cigarette billboards and promotional products with
cigarette logos.

The FDA claimed it could wield this power because nicotine qualifies as a
drug and cigarettes a drug-delivery device, and the agency was designed to
regulate both these categories. In 1997 a federal judge in North Carolina
upheld this argument, though he struck down the FDA's ability to oversee
advertising, citing freedom of speech.

In yesterday's decision, the court said the FDA could not call tobacco a
drug. In the often- acerbic ruling, it caught the FDA in a sort of
rhetorical trap: Since the FDA says tobacco is very harmful to the public
yet has no benefits, if it honestly applied its drug-approval standards, it
would have to ban tobacco.

"A faithful application of the statutory language would lead to a ban on
tobacco products - a result not intended by Congress," the court wrote.

The tobacco industry said it would not necessarily ask stores to take down
its signs prohibiting sales to minors or to stop ID checks.

"The industry remains firmly committed to taking meaningful steps to reduce
underage tobacco use," said a spokesman for the major tobacco companies:
Philip Morris Inc., R.J. Reynolds Tobacco Co., Brown & Williamson Tobacco
Co., Lorillard Tobacco Co., and United States Tobacco.

Checked-by: Ghamal de la Guardia