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NPN September 2011

National Petroleum News (NPN) has been the independent voice of the petroleum industry since 1909 as the opposition to Rockefeller’s Standard Oil. So, motor fuels marketing and retail is not just a sideline for us, it’s our core competency.

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NATONEWS Industry Litigates Critical Issues Four lawsuits pending tions is threatened, the final recourse is usually liti- gation. Currently, there are four lawsuits pending on tobacco issues. W Thomas Briant is execu- tive director of the National Association of Tobacco Outlets. NATO's toll-free number is (866) 869-8888 and the association's Web site address is www.natocentral.org. COLOR AD BAN/GRAPHIC WARNINGS Two of the most visible FDA tobacco regula- tions are the ban on color cigarette advertis- ing and the implementation of graphic picture health warnings. In August of 2009, a lawsuit was filed by a NATO retailer and five tobacco manu- facturers to declare that the FDA ban on color cigarette advertising and the graphic warning label requirement were unconstitutional. On January 5, 2010, a Kentucky federal district court judge struck down the ban on color tobacco advertising because advertising is a form of protected free speech under the First Amendment to the U.S. Constitution. However, the court upheld the graphic warning label requirement. The FDA appealed the overturning of the color ad ban while the NATO retailers and manufacturers appealed the upholding of the graphic warning labels. On July 27th, the U.S. Circuit Court of Appeals held an oral argument hear- ing on these appealed issues. A decision from the U.S. Circuit Court of appeals should be issued in several months. CORRECTIVE STATEMENTS In 1999, the U.S. Department of Justice sued the major cigarette manufacturers claiming that they used misleading statements about the health effects of smoking. Then, in 2006, a federal judge issued a "remedial order" requiring the manufacturers to place newspaper advertisements and television ads with statements "correcting" these claims. The remedial order also required each manufac- turer to place an 18" wide by 30" high sign listing these corrective statements on the front counter 10 SEPTEMBER 2011 HEN THE RIGHT TO ADVERTISE AND SELL legal tobacco products without undue regulations or unconstitutional restric- of every retail store under a promotional payment contract. This means that a retailer would need to place up to three signs on the front checkout coun- ter depending on how many contracts the retail had in place. This remedial order was appealed and the U.S. Circuit Court of Appeals ruled, in part, that the federal district court judge had not adequately sup- ported this retail signage requirement. In response to the Circuit Court of Appeals order, NATO was one of the retail trade associations that submitted a brief supporting the abandonment of the corrective sign requirement. MENTHOL AND BIAS The FDA law established the Tobacco Product Scientific Advisory Committee (TPSAC) which is a group of 12 individuals including scientists, public health advocates, a member of the public and three non-voting tobacco industry members. The FDA law required this committee to conduct a yearlong study of the impact of menthol in cigarettes, espe- cially on youth, and submit a report to the FDA. Several manufacturers have sued the FDA to prevent the TPSAC report from being relied on by the FDA because three of the TPSAC members may have conflicts of interest (these individuals have testified as paid expert witnesses against the industry in other lawsuits and, as a result, may be biased against the industry). WORCESTER, MA AD BAN On Friday, June 17th, a lawsuit was filed by NATO and three tobacco manufacturers in federal district court seeking a preliminary and permanent injunc- tion against an ordinance adopted on May 10, 2011 by the Worcester, Massachusetts city council which prohibits (1) all outdoor tobacco advertising, and (2) all indoor tobacco advertisements displayed in a retail store that can be viewed from the street or a park (e.g., through a window). It is important to note that this ordinance bans advertisements for all tobacco products, not just cigarettes. The lawsuit seeks an order declaring that the ordinance violates the First Amendment of the U.S. Constitution that protects free speech, includ- ing commercial speech in the form of product advertising. NATO and the three tobacco manu- facturers filed this lawsuit to protect the right to continue to advertise legal tobacco products at retail stores. NPN Magazine n www.npnweb.com

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