A US appeals court has ruled that cigarette companies do not need to comply with new federal rules that require them to put graphic warning labels on their products.
The decision by a court in Washington DC on Friday contradicts a ruling in a similar case by another court in March, setting up the possibility the US Supreme Court will enter the dispute.
Five cigarette companies challenged the rules from the US Food Drug Administration: Reynolds American Inc, Lorillard Inc ; Commonwealth Brands Inc, which is owned by Britain's Imperial Tobacco Group Plc ; Liggett Group LLC and Santa Fe Natural Tobacco Co Inc.
The FDA has argued the images of rotting teeth and diseased lungs are accurate and necessary to warn consumers about the risks of smoking.
But the Washington Court of Appeals disagreed, calling them unabashed attempts to evoke emotion and browbeat consumers.
The Department of Justice, which argued the case for the FDA, said it needs to review the ruling before deciding on next steps.
Congress passed a law in 2009 that gave the agendy broad powers to regulate the tobacco industry, including imposing the label regulation.
The law requires color warning labels big enough to cover the top 50 percent of a cigarette pack's front and back panels, and the top 20% of print advertisements.
The ruling means tobacco companies will likely not have to comply with the requirements for now, given divergent court rulings.