JUDGE RULES LORILLARD CAN SUE ANTI-SMOKING GROUP

Tobacco Giant Alleges It Was Vilified in Advertising Campaign

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WASHINGTON (AdAge.com) -- A Delaware court ruled that Lorillard Tobacco Co. can move ahead with its suit of the American Legacy Foundation and its anti-tobacco "Truth" campaign.

Judge Stephen P. Lamb rejected arguments made by the foundation in a countersuit that it can't be sued because it wasn't a party to the Master Settlement Agreement between 46 state attorneys general and major tobacco companies that created the foundation and paid $1.5 billion to fund its campaign.

Violated settlement
The 1998 agreement bars personal attacks and "vilification" of tobacco companies or their executives in anti-smoking advertising campaigns. Lorillard contends that ads from the foundation violated that agreement.

The dispute stems from several

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Says Work of Two Agencies 'Vilifies' Cigarette Corporations
ads created by Havas' Arnold Worldwide, Boston, and Maxxcom-backed Crispin Porter & Bogusky, Miami. Among the ads was radio commercial that ran in 2001 in which a Lorillard employee is called and asked if he wants to buy dog urine as a source of urea for cigarettes. Lorillard alleges the ad engages in "vilification."

Legacy President Cheryl Healton in a statement said she regrets the court's decision, which she called "procedural," because it will force the foundation to divert resources.

Will not be 'distracted'
"We will not be distracted no deterred from pursuing our ongoing commitment to save lives," she said.

Ronald Milstein, Lorillard vice president and general counsel, said tobacco company's purpose in the suit is not to stop advertising, but to get the foundation to live up to the terms of the agreement.

"It's not about money. It's about making them adhere to agreement they reached. That is all we need to do," he said. "We are 100% in support of their efforts."

The suit comes as the five major tobacco companies near their last payment to fund the foundation's campaign. Mr. Milstein said Lorillard is continuing the suit because the ads could run for additional years and the foundation will continue.

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