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Legacy Foundation Sues Back

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WASHINGTON -- To counter Lorillard Tobacco Company's claim that its anti-smoking ads violate the Master Settlement Agreement with 46 states, the American Legacy Foundation filed suit today (Feb. 13) in Delaware state court to prevent the cigarette maker from suing under the terms of the MSA. The suit also asks for an injunction barring Lorillard from suing in any other court.

Lorillard first threatened to sue Legacy in a Jan. 18 letter alleging that the "truth" ads violate the MSA, which prohibits the messages from personally attacking or vilifying tobacco companies.

"In my view, Lorillard's charges are just a smoke screen," says Cheryl Healton, Legacy's president and CEO. "The company's real intent is to kill the 'truth' campaign because it is hurting Lorillard where it counts the most -- in the pocketbook."

Steve Watson, Lorillard's vice president of external affairs, says Legacy's action is "puzzling" given the fact that the MSA created the foundation and provided the funding from the tobacco companies for Legacy's anti-smoking campaign.

"It would appear that ALF is trying to distance itself from the MSA, which is unfortunate," Watson says. "The MSA is the contract that outlines the rules by which we all must adhere to. I would suspect this is more of a legal maneuver that has little to do with the issues we have been discussing, which include secretly taping our employees, attacking our company and knowingly advertising false information about our products."

Healton counters that Legacy's advertising campaign is about education, not vilification.

Legacy's ads are done by Arnold Worldwide, Boston, and Miami-based Crispin, Porter & Bogusky. Legacy spent about $100 million on its 'truth' campaign last year.