Tobacco Ads on Table in Industry/Government Talks The North Carolina decision may add another wrinkle to what has become a hot topic in the media -- negotiations reportedly in progress between major cigarette manufacturers and 32 state attorneys general. According to reports first published in the Wall Street Journal, the two sides have discussed the possibility of a settlement that would give tobacco makers immunity from future government and private lawsuits. In return, the companies would create a fund -- valued at perhaps $300 billion over 25 years -- from which claimants would be reimbursed. A host of other issues reportedly have been on the table, such as the scope of the FDA's regulatory efforts and limits on tobacco advertising. Some observers think the district court decision affirming the FDA's authority to regulate tobacco may put extra pressure on tobacco makers to reach a settlement. Others aren't so sure -- nothing will be final in the courts until the case goes to a federal appeals court and probably the Supreme Court. The fact that the district court denied the FDA's authority to regulate tobacco advertising keeps that imortant card in the companies' hand -- at least for now. Meanwhile, the sporadic talks have yielded no deals and the process could collapse at any time. The Wall Street Journal reported May 29 that negotiators planned to wrap up a deal within two weeks, but noted June 2 that the attorneys general had postponed the talks until they could agree themselves on whether an individual's right to sue the tobacco companies should be limited. At least five are reported to oppose such a limitation. Any deal would need a law passed by Congress, a formidable obstacle in itself.

Judge Rules Advertising, Promotion Not Covered Under 'Restricted Devices' From the opinion by U.S. District Judge William L. Osteen, Sr., in Coyne Beahm: "Section 360j(e), entitled 'Restricted devices,' provides: (1) The Secretary may by regulation require that a device be restricted to sale, distribution, or use...upon such other conditions as the Secretary may prescribe in such regulation... "FDA determined that tobacco products are restricted devices within the meaning of Section 360j(e).... FDA further asserts that it may restrict the advertising and promotion of tobacco products, explaining that advertising and promotion constitutes an 'offer of sale' and moreover, that an 'offer of sale' is part of the 'sale' of a product. ... "FDA may not restrict advertising and promotion pursuant to Section 360j(e). First...the word 'sale' does not encompass the advertising or promotion of a product. Second...although Congress expressly used the words 'offer for sale' and 'advertising'....elsewhere in the FDCA, it chose not to use such language in Section 360j(e). "[T]he section's grant of authority to FDA to impose 'other conditions' on the sale, distribution, or use of restricted devices does not authorize FDA to restrict advertising and promotion. ... "[T]he fact that Congress has specifically granted to FDA the authority to regulate advertising of restricted devices in a separate section supports the court's finding that Congress did not intend to grant FDA such authority under Section 360j(e). "In light of the court's finding that FDA lacks authority under the FDCA to restrict the promotion and advertising of tobacco products, the court declines to determine whether the promotion and advertising restrictions violate the First Amendment." 1997 U.S. Dist. LEXIS 5453, 61, 63-67, 70, 74 (footnotes omitted).