The 1998 settlement with 46 state attorneys general that created the American Legacy Foundation prohibits its ads from vilifying the corporations that manufacturer and distribute cancer-causing tobacco products. The foundation oversees the production of $116 million worth of such advertising each year. That money is provided by the tobacco companies as part of the settlement.
Lorillard contends in a strongly worded "notice of intent to initiate" a suit that the current ad campaign, from Havas Advertising's Arnold Worldwide, Boston, and MDC Communications Corp.'s Crispin Porter Bogusky, Miami, vilifies tobacco companies, thereby violating the settlement pact. The notice was sent last week and unveiled today by foundation executives.
'Dishonest, deceitful, callous, malicious'
"The message of
Steve Watson, Lorillard's vice president of external affairs, said the notice of intent to file suit is required under the settlement agreement.
Mr. Watson said the notice is not only a response to the foundation's advertising but to a radio ad that ran last summer. In the ad, a surreptitious phone call to a Lorillard worker suggests dogs would be perfect place to get the urea used in cigarettes.
Lorillard previously filed a complaint about the ad with the Federal Communications Commission.
Mr. Watson said the company doesn't want to stop Legacy from advertising, but does want the foundation's campaign to comply with terms of the settlement.
"This action is about getting to the truth, which is exactly what [the foundation] has not been doing. Their mission is to educate the public, and we support their mission. They cannot attack personally or vilify companies or manufacturer, but their focus and thrust has been to vilify."
Foundation officials said there is nothing wrong with the campaign and that the urea ad is no longer airing.
Officials said Lorillard's biggest concern is that the campaign is working too well.
"Lorillard has made an unwarranted attack," said Dr. Cheryl Hilton, Legacy's president and CEO. "The Truth campaign has not engaged in vilification of Lorillard or anyone else. The core assumption is we have to be risk-taking and edgy. This is education, not vilification."
She called Lorillard's letter "a smokescreen to strike [at] the Truth campaign."
Washington state Attorney General Christine Gregoire, who heads the foundation's board, said there is nothing wrong with current ads.
"The threatened action proves that the Truth campaign hurts," she said. "It is incomprehensible that just as we beginning to achieve success we should silence the message. To alter the campaign would be to turn our back on success."
Ms. Gregoire had ordered ads toned down early in the campaign's run.
Mr. Watson said Lorillard hadn't consulted other tobacco makers before filing the notice and that the company was acting to protect its employees.