9th U.S. Circuit Court of Appeals Upholds State Use of Tobacco Taxes for Antismoking Advertisements
A three-judge panel of the 9th U.S. Circuit Court of Appeals on Tuesday ruled 2-1 to uphold the state's right to use tax revenues from wholesale cigarette sales for antismoking advertisements that tobacco companies R.J. Reynolds and Lorillard Tobacco claimed violated their First Amendment rights and "stigmatized" their industry, Bloomberg/Los Angeles Times reports (Bloomberg/Los Angeles Times, 9/29).
The ads are produced by the Department of Health Services and are funded with a 25-cent-per-pack state tax on cigarettes approved by California voters in 1988 as part of Proposition 99, which established the Cigarette and Tobacco Products Surtax Fund. Attorney General Bill Lockyer (D) has estimated that a portion of the cigarette tax proceeds has contributed $200 million over the past 15 years to the state's antitobacco advertising campaign (California Healthline, 5/12).
The tobacco companies said that the state has produced antismoking ads that "portray tobacco executives as callous and amoral" and argued that they should not have to "pay for speech that was contrary to their views and intended to ruin their industry," the San Francisco Chronicle reports. For example, one ad shows tobacco executives at a fictional hearing denying the health risks of smoking, and another shows cigarettes "raining onto a schoolyard" while a tobacco company executive discusses the need to market cigarettes to children to maintain its customer base, according to the Chronicle.
However, the court said the ads do not restrict the companies' freedom of speech. "When the government acts as a speaker, it may espouse views that directly contradict those of taxpayers (the companies) without interfering with taxpayers' freedom of expression," Judge Raymond Fisher wrote in the majority opinion. He added that if tobacco companies were allowed to veto ads funded by the tax, their influence might also extend to public school antismoking campaigns.
Judge Stephen Trott, who dissented, said the state's use of the tobacco tax is "the ultimate cheap shot" because it requires a small group of taxpayers to subsidize a message that damages its reputation and could set a dangerous precedent (Egelko, San Francisco Chronicle, 9/29).
Tom Dresslar, a spokesperson for the attorney general's office, said the ruling "affirms the legal principle that the government has wide latitude to use tax revenue to speak to the public about policies that have been approved by voters" (Bloomberg/Los Angeles Times, 9/29).
DHS Director Sandra Drew said the decision "means California will continue a campaign that has been effective in helping to reduce smoking among both adults and teens" (Rapaport, Sacramento Bee, 9/29).
According to Lockyer, the ads have helped reduce the state's smoking rate to 16% in 2001-2002 from 22% in 1998 (California Healthline, 5/12).
R.J. Reynolds attorney H. Joseph Escher said the tobacco company might appeal the ruling (San Francisco Chronicle, 9/29).