Lorillard Sues Attorney General Group Over Anti-Tobacco Ads
Greensboro, North Carolina, Sept. 13 (Bloomberg) -- Lorillard Tobacco Co. said it filed a lawsuit accusing the National Association of Attorneys General of failing to stop ``vilifying'' advertisements that criticize the cigarette maker.
In the suit filed in Delaware Chancery Court, the Loews Corp. unit said the attorneys general have violated their duty by failing to take action against the American Legacy Foundation, which runs ads critical of tobacco companies. The company previously sued the foundation in an effort to stop the ads.
With a goal of educating people about the risks of smoking, the American Legacy Foundation was created as part of the $206 billion Master Settlement Agreement in 1998 between the tobacco industry and 46 states.
Lorillard sued in an effort to ensure that parties to the settlement ``are acting in accordance with the letter and the spirit of that historic agreement,'' Ronald Milstein, Lorillard vice president and general counsel, said in a statement.
The attorneys general are responsible for enforcing the settlement's terms. Officials with the association didn't immediately return a call seeking comment.
The Greensboro, North Carolina-based company sued the American Legacy Foundation in February, claiming it violates the settlement by running advertisements that improperly attack tobacco companies. The company claims the ads are based on personal attacks and offensive statements, not education.
The advertisements went beyond education on the addictiveness, health effects and social costs of smoking, the company claims.
Lorillard's suit against the foundation claims that the organization also made false allegations, including an advertisement that accuses the company of adding dog urine to its products.
In a preemptive move, the American Legacy Foundation had earlier sued Lorillard in Delaware Chancery Court, asking a judge to rule that its ads, part of its ``truth'' campaign, don't improperly attack Lorillard and to declare that the company has no basis to sue the foundation. Lorillard had told the foundation on Jan. 18 it planned to sue within 30 days.
The anti-smoking foundation's suit said it isn't a party to the 1998 settlement and doesn't have to comply with it, though the foundation was established as part of the agreement.
Loews Corp. shares rose 65 cents to $50.26 in composite trading on the New York Stock Exchange.
In addition to 1998 settlement, four states -- Florida, Minnesota, Mississippi and Texas -- reached separate settlements with the tobacco industry for about $40 billion.