Cigarette makers challenged the U.S. Food and Drug Administration's rule requiring companies to label tobacco products with images of rotting teeth, diseased lungs and other images intended to illustrate the dangers of smoking.

"The government has failed to carry both its burden of demonstrating a compelling interest and its burden of demonstrating that the rule is narrowly tailored to achieve a constitutionally permissible form of compelled commercial speech," U.S. District Judge Richard Leon said in the ruling.

The judge granted a preliminary injunction last year blocking the new label requirement from taking effect in 2012, a decision the Obama administration has already taken to the U.S. Court of Appeals for the District of Columbia Circuit.

The government is also likely to appeal the new ruling.

While educating the public about the dangers of smoking "might be compelling, an interest in simply advocating that the public not purchase a legal product is not," Leon wrote in a 19-page ruling.

Further, Leon said the warning labels were too big to pass constitutional muster and that the government has numerous other tools at its disposal to deter smoking such as raising cigarette taxes or including simple factual information on the labels rather than gruesome images.

Congress passed a law in 2009 ordering the FDA to adopt the label regulation, which 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 percent of print advertisements.

The FDA released nine new warnings in June to go into effect in September 2012, the first change in U.S. cigarette warning labels in 25 years. Cigarette packs already carry text warnings from the U.S. Surgeon General.

Reynolds American Inc's R.J. Reynolds unit, Lorillard Inc, Liggett Group LLC, Commonwealth Brands Inc, which is owned by Britain's Imperial Tobacco Group Plc, and Santa Fe Natural Tobacco Co Inc challenged the rule, arguing it would force them to engage in anti-smoking advocacy against their own legal products.

"Unfortunately, because Congress did not consider the First Amendment implications of this legislation, it did not concern itself with how the regulations could be narrowly tailored to avoid unintentionally compelling commercial speech," Leon wrote.

"We believe governments, public health officials, tobacco manufacturers and others share a responsibility to provide tobacco consumers with accurate information about the various health risks associated with smoking," said Martin Holton, general counsel for R.J. Reynolds.

"However, the goal of informing the public about the risks of tobacco use can and should be accomplished consistent with the U.S. Constitution," Holton added in a company statement.

Representatives for the other tobacco companies involved in the litigation were not immediately available for comment.

A spokesman for the Justice Department, which represented the FDA in the case, had no comment.

Tobacco companies have said it would cost them millions of dollars to comply and also argued the graphics offer no information that could not be accomplished through messages similar to warnings already on cigarette packages and ads.

The Centers for Disease Control and Prevention estimates some 45 million adults smoke cigarettes, which are the leading cause of preventable deaths in the United States.

The ruling "ignores decades of First Amendment precedent that support the right of the government to require strong warning labels to protect the public health," Matthew Myers, president of the Campaign for Tobacco-Free Kids, said in a statement.

The case is R.J. Reynolds Tobacco Co et al v. FDA, U.S. District Court for the District of Columbia, No. 11-1482.

(Reporting By Jeremy Pelofsky; Editing by Matthew Lewis, Andre Grenon and Steve Orlofsky)

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