The Supreme Court this week will begin deciding on the government's most formidable effort ever to stop smoking, as public pressure against the tobacco industry increases.

In 1996, the Food and Drug Administration broke with tradition and proposed regulating nicotine in cigarettes as a drug. In a plan to cut down on teen smoking, the agency issued rules that would restrict the marketing and sale of tobacco products to youth. It was a decisive moment for the government in the national controversy over a product that medical experts consider the primary cause of preventable disease and death. But after a lawsuit by tobacco companies, a federal appeals court ruled that the FDA lacked the authority to regulate tobacco.

The case has arrived at the Supreme Court, where it will be argued on Wednesday. An eventual decision by the justices not only will determine the fate of the program to prevent youth smoking, but, more broadly, will test a comprehensive federal endeavor to restrain a once powerful industry that is now under constant governmental, legal and societal assault.

In the four years since the FDA proposed its regulations, cigarette companies, once impregnable in court, have lost several high-dollar, personal-injury lawsuits, including the first phase of a Florida class-action dispute that could cost the industry billions of dollars.

In 1994, Mississippi, followed by a majority of the states, sued tobacco companies to recover health expenditures for smoking-related illnesses. The suits were settled last year for $246 billion.

Finally, in September, the Justice Department filed a lawsuit seeking compensation for the medical costs to the government of treating smokers and accusing tobacco companies of conspiring to defraud the public about the health risks of cigarettes.

"There is no question that the world in which the tobacco companies operate is changing," said former FDA commissioner David Kessler, who had signed the proposed rules to regulate nicotine and has closely followed the case. "No longer can they claim that tobacco is not an addictive substance. It is children who are becoming addicted, and the industry's major defense that smoking is a matter of adult choice is no longer credible."

But lawyer Bert Rein, representing Brown and Williamson Tobacco Corp., counters that the case before the high court is not about the health consequences of nicotine but about what kinds of regulations the FDA is authorized to set down. "We don't think this is a public health case," he said. "This is an effort by the FDA to grab power that the Congress never gave it."

Forty states are siding with the agency, saying that despite the multibillion-dollar settlement struck with tobacco companies last year, a comprehensive national plan to prevent teen addiction is needed. Their "friend of the court" brief notes that smoking among young people is on the rise and refers to "the decades-long conspiracy by the tobacco industry to conceal the deadly and addictive nature of its products."

"There is no shortage of attempts to attack and vilify the industry," said Scott Williams, a spokesman for five major cigarette companies, adding that the real issue is whether the agency, rather than Congress, has the power to take the initiative against tobacco.

For decades, the FDA resisted pressure from public health groups to regulate tobacco, saying it lacked the authority. But in 1996, the agency changed course, declaring the nicotine in cigarettes a drug that it could oversee based on the 1938 Food, Drug and Cosmetic Act. The law gave the FDA jurisdiction over drugs and devices "intended to affect the structure or any function of the body."

The FDA concluded that the way nicotine affects the body (for example, as a sedative, stimulant or appetite suppressant) was clearly "intended" by the cigarette makers. The agency said it reached that conclusion partly as a result of newly disclosed industry documents that it saw as showing that cigarette makers engineered their products to enhance the delivery of nicotine.

Acknowledging that it was difficult to take on adult addiction and faced with evidence that smokers get hooked in childhood, the FDA aimed its initial regulations at teen smoking. It would have required retailers to check the IDs of cigarette and smokeless-tobacco buyers under age 27 and would have prohibited cigarette vending machines except in bars and other adult-only places.

Cigarette makers immediately sued, arguing that Congress had never given the FDA any authority to regulate cigarettes and smokeless tobacco. The government won the first round, when a federal trial judge ruled that the law was not limited to devices that have a medical purpose and that Congress did not specifically prohibit the FDA from regulating tobacco. However, the judge did reject the agency's planned ban on cigarette billboards near schools and other advertising limits, saying the FDA had exceeded its authority in those areas. The advertising provisions are not part of the current Supreme Court case.

On appeal, the 4th U.S. Circuit Court of Appeals reversed the trial court, ruling that the history of the 1938 act and FDA practice demonstrated that the agency lacked the power to control tobacco products as drugs. "In the 60 years following the passage of the act [in 1938]," the 4th Circuit said, "the FDA has repeatedly informed Congress that cigarettes marketed without therapeutic claims do not fit within the scope of the act." Noting the FDA's belief that cigarettes are unsafe, the court added that if the agency had the authority to regulate tobacco, it would have to ban cigarettes altogether, under the terms of the act.

"This case is about who has the power to make this type of major policy decision," the Richmond-based court concluded. "Neither federal agencies nor the courts can substitute their policy judgments for those of Congress."

The government's appeal, signed by Solicitor General Seth P. Waxman, who will argue the case on Wednesday, emphasizes that tobacco products have the "classic characteristics" of drugs such as tranquilizers, stimulants and weight-loss pills: "They are taken within the human body, they deliver a pharmacologically active substance to the bloodstream, and they have potentially dangerous effects."

The government contends that the tobacco regulations were the result of the most important public health initiative the FDA has undertaken in a half-century. It asserts that 92 percent of all cigarette smokers and 75 percent of all young people who use smokeless tobacco do so because they are addicted to the nicotine in the products.

Addressing the 4th Circuit's reasoning that if tobacco were considered a drug it would have to be banned because it is not safe, the FDA's lawyers maintain that the agency may allow a product to continue being marketed--with restrictions--if it finds that the dangers of banning the product outweigh the benefits. The FDA says that if it tried to ban tobacco, it would leave too many adult smokers with withdrawal symptoms and would create a dangerous black market.

In response, the major tobacco companies and the distributors and retailing groups that sued emphasize that the FDA has always based its regulations on the medical claims that a manufacturer makes--and that cigarette manufacturers make no such assertions. The companies argue that Congress never intended to delegate to the FDA the authority to regulate tobacco products but chose instead to regulate those products itself through a series of tobacco-specific statutes, such as the rules governing package labels.

"This case is about who has the power to make national policy for the regulation of tobacco products," declares an R.J. Reynolds Tobacco Co. filing, adding that the authority plainly rests with Congress.

Dozens of groups have filed "friend of the court" briefs supporting one side or the other in Food and Drug Administration v. Brown and Williamson Tobacco Corp. Public Citizen, for example, observes that tobacco use is the single most preventable cause of early death and disease in America and that each year about 1 million adolescents start smoking. On the other side, the Product Liability Advisory Council, made up of more than 100 major corporations, asserts that if the FDA's argument prevails, federal agencies will gain new authority to make major policy decisions at the expense of Congress.

Staff researcher Lynn Davis contributed to this report.

BIG TOBACCO ON TRIAL

Major tobacco developments in the 1990s:

April 1994: Seven tobacco company executives testify before Congress that cigarettes are not addictive.

May 1994: Mississippi becomes first state to file a lawsuit against the tobacco industry seeking to recover the costs of treating sick smokers. Other states follow.

August 1996: Food and Drug Administration formally asserts authority to regulate nicotine in cigarettes as a drug and proposes restrictions on the sale, marketing and adver-tising of tobacco products to young people.

April 1997: U.S. District Judge William L. Osteen Sr. upholds FDA power to regulate sale and marketing of tobacco but invalidates advertising restrictions.

June 1998: Comprehensive tobacco legislation collapses in Congress.

August 1998: U.S. Court of Appeals for the 4th Circuit rules the FDA lacks authority over tobacco.

November 1998: 46 states and major cigarette companies reach a $206 billion settlement over the costs of treating smoking-related illnesses. Four other states had earlier settled for about $40 billion.

July 1999: A Miami jury hearing the first class-action lawsuit against the tobacco industry finds cigarette companies responsible for the deaths and diseases of smokers.

September 1999: Justice Department sues tobacco companies to recover the costs of government medical care for sick smokers and alleges a conspiracy to defraud the public about the addictiveness of nicotine and smoking's health risks.

Dec. 1, 1999: Supreme Court is scheduled to hear oral arguments in FDA's appeal of 4th Circuit ruling.