WASHINGTON, June 28 -- The Supreme Court today placed significant limits on the ability of state and local governments to regulate tobacco advertising in a case from Massachusetts that also appeared to invalidate a similar law in New York City.

All nine justices agreed that smoking by children was a serious public health problem that government policies could appropriately address. But invoking an amalgam of statutory and constitutional reasons, all nine also found invalid the core of a sweeping tobacco advertising ban that was adopted two years ago in Massachusetts and was the most far- reaching of any state. The decision was a victory for the tobacco industry as well as for the advertising industry, which had argued on behalf of the cigarette makers for a vigorous First Amendment protection for advertising. The Massachusetts restrictions, for example banning all advertising, even in shop windows, that could be seen within a 1,000-foot radius of schools and playgrounds, went considerably beyond those in the 1998 settlement between 4 major cigarette manufacturers and 46 states. While the ruling today does not threaten that settlement, it could complicate efforts to go further at the federal as well as state level. Although the industry has not challenged the 32-year-old federal ban on cigarette advertising on radio and television, the court's constitutional analysis of the industry's right to market its products to an adult audience would appear to make the ban vulnerable if it were attacked on First Amendment grounds. With a majority opinion by Justice Sandra Day O'Connor, the decision today overturned a ruling issued last year by the United States Court of Appeals for the First Circuit, in Boston, which rejected challenges brought against the Massachusetts regulations by makers of cigarettes, smokeless tobacco and cigars. This array of plaintiffs complicated the case for the Supreme Court because federal pre-emption, one basis for the cigarette industry's challenge, did not apply to the other two branches of the tobacco industry. The argument was that a 1965 federal law, the Federal Cigarette Labeling and Advertising Act, pre- empts state regulation by providing that "no requirement or prohibition based on smoking and health shall be imposed under state law with respect to the advertising or promotion of any cigarettes" that contain on their packaging the warning labels imposed by the law. In a 5-to-4 part of the ruling, the court agreed with the cigarette industry that the Massachusetts rules were pre-empted in so far as they applied to cigarettes. In addition to Justice O'Connor, Chief Justice William H. Rehnquist and Justices Antonin Scalia, Anthony M. Kennedy and Clarence Thomas agreed with the pre-emption analysis. The dissenters on this point were Justices John Paul Stevens, Ruth Bader Ginsburg, Stephen G. Breyer and David H. Souter. They said that Congress intended to pre-empt only a "narrow set of content regulations," and not state and local advertising restrictions in general. Ordinarily, the majority's pre- emption analysis would have been the end of the case. But because smokeless tobacco and cigars are not covered by the cigarette labeling act, and because these industries had raised First Amendment challenges to the Massachusetts regulations, the court had to consider the constitutional issue as well. The entire court agreed that the law's main element, restrictions on outdoor advertising, violated the manufacturers' right to commercial speech because the restrictions, while aimed at protecting children, interfered with the tobacco industry's right to address its message to adult consumers. In the majority opinion, Justice O'Connor said that "in some geographical areas, these regulations would constitute nearly a complete ban on the communication of truthful information" about the products. She said the "breadth and scope" of the regulations "do not demonstrate a careful calculation of the speech interests involved." Justices Stevens, Ginsburg, Breyer and Souter agreed. "Noble ends do not save a speech-restricting statute whose means are poorly tailored," Justice Stevens said. Where the two groups of justices parted company was on what should happen next, given the constitutional infirmity on which all agreed. Justice O'Connor and her four allies struck down the advertising regulations, while the Stevens group said the question of the validity of the 1,000-foot rule should be remanded to the lower courts to give the state the chance to show that the manufacturers had "sufficient alternative avenues of communication" available. The decision today may well have a fatal effect on New York City's Local Law 3, the Youth Protection Against Tobacco Advertising and Promotion act, which was passed in 1998 and imposes the same 1,000-foot restriction as the Massachusetts regulation. It has been the subject of several court proceedings and is now awaiting a ruling from the Federal District Court in Manhattan. "There may be differences that would allow the city to argue that our law can go into effect," said Jeffrey D. Friedlander, first assistant corporation counsel. "But it is unlikely given today's decision by the Supreme Court." The decision could also invalidate laws in Chicago and Baltimore. On other questions raised by the case, Lorillard Tobacco v. Reilly, No. 00-596, all nine justices agreed that restrictions on sales of cigarettes from self-service displays were constitutional. They differed over another provision, a requirement that tobacco advertisements in stores be at a height of at least five feet to be out of children's direct line of sight. Justice O'Connor, joined by Chief Justice Rehnquist and Justices Scalia, Kennedy, Thomas and Souter, found this provision unconstitutional because it appeared unlikely to accomplish its goal. "Not all children are less than 5 feet tall, and those who are certainly have the ability to look up and take in their surroundings," Justice O'Connor said. Justices Stevens, Ginsburg and Breyer said that although the question was close, they would uphold that provision because it "can have only the slightest impact on the ability of adults to purchase a poisonous product and may save some children from taking the first step on the road to addiction." As a matter of First Amendment analysis, the decision today made no new law. The tobacco industry and some of its supporters had argued that it was time for the court to raise commercial speech from its current second-tier status to the level of full First Amendment protection under which any regulation has to be supported by a "compelling" government interest. But the court applied its tried-and- true commercial speech analysis, which gives the government more leeway to impose restrictions that "directly and materially advance" legitimate interests. Justice Thomas called for stricter First Amendment scrutiny in a concurring opinion. In its final rulings of the 2000-2001 term, the court also issued these other decisions. Property Rights The court ruled 5 to 4 that the owner of 20 acres of Rhode Island waterfront property has the right to go to court to challenge development restrictions even though the restrictions were in place when he acquired the property. Advocates of property rights hailed the decision, Palazzolo v. Rhode Island, No. 99-2047, as a substantial victory. The decision, with a majority opinion by Justice Kennedy, overturned a ruling by the Supreme Court of Rhode Island that because Anthony Palazzolo acquired the property several years after the creation of the Rhode Island Coastal Resources Management Council, he was on notice that there were restrictions on his ability to fill in the wetlands. Consequently, the state court said, he had no claim that the wetlands regulations amounted to an unconstitutional "taking" of his property, the state court ruled. In his decision today, Justice Kennedy said that land-use restrictions that are unreasonable "do not become less so through passage of time or title." He said the state should not be able to escape having to defend unreasonable regulations simply because the property has changed hands, adding, "Future generations, too, have a right to challenge unreasonable limitations on the use and value of land." The court did not decide, however, whether the particular restrictions amounted to a taking, leaving that determination up to further proceedings in the state courts. The ultimate significance of the decision lies in how courts apply the majority's general language and what weight they give to the date of acquisition. The five-justice majority was not in agreement on that point today. Justice O'Connor, noting that the test for a taking of this sort was whether the government had interfered with a landowner's "reasonable investment-backed expectation," said that whether the owner was on notice of development restrictions should be a factor in that analysis. "The regulatory regime in place at the time the claimant acquires the property at issue helps to shape the reasonableness of those expectations," she said in a concurring opinion. But in another concurring opinion, Justice Scalia said the fact that a restriction may have existed at the date of acquisition "should have no bearing upon the determination of whether the restriction is so substantial as to constitute a taking." Justice Kennedy's majority opinion, which was also signed by Chief Justice Rehnquist and Justice Thomas, took no position on this debate. Justice Ginsburg filed a dissenting opinion that Justices Souter and Breyer joined. Justice Stevens also filed a dissenting opinion in which he said there was "no obvious limiting principle" to the majority's analysis. He said the decision "does raise the spectre of a tremendous and tremendously capricious one-time transfer of wealth from society at large to those individuals who happen to hold title to large tracts of land at the moment this legal question is permanently resolved." Habeas Corpus A final decision was an important interpretation of the 1996 law that limited the right of state inmates to file more than one petition for a writ of habeas corpus in federal court. The law, the Antiterrorism and Effective Death Penalty Act, provides an exception to the one-petition rule to inmates who could benefit from a new Supreme Court decision that the Supreme Court has "made retroactive." The question in Tyler v. Cain, No. 00-5961, was what it takes for the court to "make" a ruling retroactive. In a decision by Justice Thomas, the court held by a 5 to 4 vote that the Supreme Court itself must declare, in a separate case, that the relevant decision is retroactive. It is not enough, Justice Thomas said, for the court to declare that the decision is fundamental to a fair trial or to have led lower courts to conclude on their own that the decision applies retroactively. The issue in the case today involved a former Louisiana jury instruction that the court had twice declared unconstitutional in rulings it did not explicitly make retroactive. The decision was joined by Chief Justice Rehnquist and by Justices O'Connor, Scalia and Kennedy. Justice Breyer dissented in an opinion joined by Justices Stevens, Souter and Ginsburg.

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