"The advertisements are not invidious, disparaging, offensive, belligerent, nor fiercely or severely critical," the court said.
The decision was a major blow to Lorillard, which has fought long and hard against some of the ads and other activities of the in-your-face anti-smoking campaign from the American Legacy Foundation that began its run since shortly after the agreement was signed.
"This is a big win. This is not a close call," said Vermont Attorney General William Sorrell, who heads the foundation's board.
Legacy President-CEO Cheryl Healton said the win brings an "unfounded action" to an end and allows the foundation to proceed with the Truth campaign.
The dispute stemmed from wording within of the 1998 Master Settlement Agreement, which ended state lawsuits against tobacco makers and ordered the companies to provide billions of dollars to states and $1.55 billion to fund the American Legacy Foundation's ad campaign. Signed after Florida and California started airing their own anti-tobacco-industry ads, including one Florida ad comparing the tobacco industry to Hitler, the agreement included a section barring the foundation's ad campaign from engaging in "vilification" or "personal attacks" on individual tobacco execs or companies.
Lorillard today declined to comment on the decision. The ad campaign is from Havas' Arnold Worldwide and Crispin Porter & Bogusky.
Lorillard initially cited a 1991 radio ad in which someone called Lorillard claiming to be a dog walker and suggested a "business idea" of collecting dog urine as an easy source of urea, one chemical used in cigarette. A Lorillard's employee real name is heard in the ad. As the case proceeded through the courts, Lorillard also complained about a number of other ads in the Truth campaign.
A Delaware Court of Chancery vice chancellor agreed with Lorillard that one part of the campaign -- a Mad Lib-like form on a Truth website that let users insert words into an e-mail and send it to the company -- did violate the agreement, but ruled that there was little damage and the Truth ads didn't violate the agreement. The Delaware Court of Chancery and Supreme Court today upheld the decision.