The tobacco companies' 1998 settlement with 46 state attorneys general imposed curbs on tobacco marketing and also provided money for a tobacco education campaign. The agreement prohibits the anti-tobacco 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.
Last month Lorillard notified the foundation that it believed some ads created by Havas Advertising's Arnold Worldwide, Boston, and MDC Communications Corp.'s Crispin Porter Bogusky, Miami, did vilify it and threatened to sue the foundation for violating the agreement.
One of the ads Lorillard cited was a radio commercial last year in which an employee at the tobacco maker was heard being asked whether he wanted to buy dog urine to meet the company's needs to add urea to cigarettes.
Foundation officials said they had filed their own suit after talks with Lorillard broke down. They worried that without their own suit, Lorillard would be filing actions in multiple states. The suit was filed in Delaware, where Legacy is incorporated.
Meanwhile, tobacco marketers are facing new restrictions in their advertising following an undercover investigation in New York to see if retailers sold tobacco products to people under 18, a violation of state law.
Today Walgreens has settled with 40 state attorneys general charges that the national chain repeatedly failed to ask minors for identification when they tried to purchase cigarettes.
Part of the agreement also limits not only store placement of cigarettes but also promotional signs in stores.
The agreement bars self-service displays and requires store employees receive more training to check that buyers are of legal age. In addition, tobacco advertising is restricted to areas of the store where tobacco products are sold and its content is limited to "brand names, logos, trademarks and pricing."
After the 1998 agreement barred billboard advertising, cigarette makers have been using smaller signs, some of it featuring normal tobacco imagery, outside stores to promote its products.
A spokesman for Michigan's Attorney General Jennifer Granholm said similar pacts are being negotiated with five other national retailers.
Walgreen's didn't return calls about the details of the changes.