Tobacco manufacturers won a key victory yesterday when a third federal appeals court ruled that the mandatory health warnings on cigarette packages bar injured smokers from claiming that they weren't told they might be harmed.

The 3-0 decision by the 1st U.S. Circuit Court of Appeals -- the second of its kind in four days -- sent tobacco stocks surging on Wall Street and dampened hopes of product-liability plaintiffs.

Similar rulings were issued by the 3rd Circuit Court of Appeals in 1986 and the 11th Circuit last Friday. Plaintiffs have hoped for conflicting opinions at the appellate level that could lead to a decision by the Supreme Court.

The decision yesterday, overturning a ruling by a district court in Boston, grew out of a lawsuit brought against Liggett & Myers Tobacco Co. Inc. by the heirs of a heavy smoker, Joseph C. Palmer, who died of lung cancer seven years ago today. He was 49 and lived in Newton, Mass.

The suit alleged that warnings on the package, which were required by the Federal Cigarette Labeling and Advertising Act in 1965, were insufficient and that Liggett's advertising and promotion were improper under state statutes and common law.

Liggett countered that the federal labeling law prohibited smokers from making such claims in suits and preempted any mandatory warnings other than those dictated by Congress.

In a 23-page opinion in which the final section was titled "The Last Puff," Circuit Judge John R. Brown wrote that the labeling law carefully balanced separate national interests: a concern for public health and protection of the sale of tobacco. It is "inconceivable" that Congress intended to have that balance "superceded by the views of a single state, indeed, perhaps of a single jury in a single state," he said.

Brown summed up the appellate panel's conclusion this way: "A suit for damages on a common law theory of inadequate warning -- if the warning given complies with the act -- disrupts excessively the balance of purpose set by Congress, and is thus preempted."

Mainly because of Brown's qualification about compliance, some observers said the ruling appeared to be narrower than that handed down in April 1986 by the 3rd Circuit in Philadelphia. That ruling was adopted last Friday by the 11th Circuit in Atlanta.

The 3rd Circuit held that federal law preempts any plaintiff's claim based on a manufacturer's advertising and promotion. Despite that ruling, the case from which it arose is set for trial in Newark in October on other grounds -- such as the harm to the smoker before 1965, when the warnings first appeared.

The companies in the Philadelphia appeal were Liggett, Philip Morris Inc. and Loews Corp., successor to P. Lorillard. The company in the Atlanta appeal was American Brands Inc.

Last January the Supreme Court declined to review the 3rd Circuit decision. But the issue could reach the court if there is a conflicting ruling in a case from Tennessee that has been argued before the 6th U.S. Circuit Court of Appeals in Cincinnati, or by a state supreme court. In addition, a Montana case is expected eventually to go to the 9th U.S. Circuit Court of Appeals in San Francisco.

A Liggett spokesman said the company was "very pleased" with yesterday's decision and believes it "significantly limits the scope of claims that plaintiffs can bring." Liggett is part of Liggett Group Inc., which is owned by privately held Grandmet U.S.A. Inc., a unit of Grand Met PLC of Britain.

In a similar statement, a spokesman for Philip Morris said, "While we expect product-liability litigation against tobacco companies to continue, we will continue to defend it as vigorously as we have in the past."

No cigarette company has ever paid out a dime to a smoker, either to settle a claim or as a result of a court verdict.

Northeastern University law professor Richard A. Daynard, chairman of the Tobacco Products Liability Project, said yesterday's decision doesn't bar claims based on injuries triggered before the warning took effect or on claims that cigarettes are intrinsically dangerous or defective.

The decision "is bad news, but not fatal," Daynard said. "It certainly does not mean that tobacco litigation is dead." He also said that if the 1st Circuit was correct, "I think it's time for Congress to amend the statute."

The prices of tobacco-company stock rose sharply, led by Philip Morris, which rose 6 3/4 to $119.82 1/2, and RJR Nabisco Inc., up 3 3/8 to $69.12 1/2.

Analyst Marc Cohen of Sanford Bernstein & Co. told Dow Jones News Service that he expected tobacco stocks to trade at higher levels, but said it would be "foolish to conclude that the risks of product-liability legislation have been completely eliminated."

Cohen said he believes Philip Morris stock will trade within the next year at 17 times earnings, compared to the current ratio of 12.

Kidder Peabody analyst Roy Burry said: "The unfair valuations {of tobacco stocks} are a thing of the past and the valuation gap between a fair market value will be closed significantly."