US Court of Appeals for the Ninth Circuit, September 28, 2004 [ruling that California's tough anti-smoking advertisements do not violate the First Amendment rights of tobacco companies]. Read the opinion here [PDF]. Excerpt:

We deal here with a novel First Amendment claim. The appellants, three tobacco companies, claim that California violated their First Amendment rights by imposing a surtax on cigarettes and then using some of the proceeds of that surtax to pay for advertisements that criticize the tobacco industry.

The tobacco companies argue that this is a case of compelled subsidization of speech prohibited by the First Amendment, analogous to United States v. United Foods, Inc., 533 U.S. 405 (2001). California counters that the advertisements are government speech entirely immune from First Amendment attack. The tobacco companies concede that (1) the imposition of the tax itself is not unconstitutional and (2) the message produced by the government's advertisements creates no First Amendment problem apart from its method of funding. Rather, they argue for an independent First Amendment violation based on the close nexus between the government advertising and the excise tax that funds it. We reject this argument as unsupported by the Constitution and Supreme Court precedent, and as so unlimited in principle as to threaten a wide range of legitimate government activity. We also reject the tobacco companies' claim that the advertisements violated their rights under the Seventh Amendment or the Due Process Clause. We thus affirm the district court.

Reported in JURIST's Paper Chase here.