The California supreme court on Thursday found that RJ Reynolds Tobacco broke state law by giving out cigarettes for free at a street fair and other events, but it overturned a US$ 14.8 million fine.

The court agreed that the company illegally distributed free cigarette samples but sent the case back to a lower court to consider whether the fine was excessive. The state supreme court also found that federal law does not prohibit California from restricting free cigarettes.
"This ruling upholds California's authority to enforce tough restrictions on handing out free cigarettes, particularly in places where children are present," said Tom Dresslar, a spokesman for the office of California attorney general Bill Lockyer, which had filed the original lawsuit.
Officials at RJ Reynolds could not be immediately reached for comment.
The company, a unit of Reynolds American, gave out more than 100,000 cigarettes at six different events in 1999, including jazz and beer festivals.
Reynolds had argued that security guards were posted to bar minors from entering the booth or tent where the cigarettes were distributed only to smokers over the age of 21.
The company also argued that the 1965 Federal Cigarette Labelling and Advertising Act, which does not expressly prohibit free samples of cigarettes, supersedes state laws.
Thursday's ruling "has reverberations across the country", said Edward Sweda, senior attorney at the Tobacco Products Liability Project in Boston.
The court on Thursday said consideration of whether RJR acted in bad faith and whether the attorney general unduly delayed the litigation should be taken into account when deciding the amount of the fine.
The US$ 14.8 million had been calculated based on the number of people, nearly 15,000, who were given free samples. (pi)