Lorillard Sues Anti-Tobacco Group Over Ads

Lorillard Tobacco Co. sued an anti-tobacco group, saying it violated a 1998 settlement by running “vilifying” advertisements that improperly attack tobacco companies.

The Loews Corp. unit claims the American Legacy Foundation has run a campaign based on personal attacks and offensive statements, not education. Lorillard filed the suit in Wake County Superior Court in North Carolina.

With a goal of educating people about the risks of smoking, the American Legacy Foundation was created as part of a $206-billion settlement in 1998 between the tobacco industry and 46 states.

Lorillard says the advertisements went beyond education on the addictiveness, health effects and social costs of smoking. The organization violated the settlement “by executing a campaign of offensive statements,” the company says.

The organization also made false allegations, including an advertisement that accuses the company of adding dog urine to its products, Lorillard’s suit claims.

In a preemptive move last week, the American Legacy Foundation sued in Delaware Chancery Court, asking a judge to rule that its ads don’t improperly attack Lorillard and to declare that the company has no basis to sue the foundation.

Lorillard had told the foundation Jan. 18 it planned to file a lawsuit within 30 days. The anti-smoking foundation’s suit said it isn’t a party to the 1998 settlement and doesn’t have to comply with it, although the foundation was established as part of the agreement.

Loews Corp. shares fell $1.24 to close at $58.58 on the New York Stock Exchange.