Tobacco Firm Loses Bid to Cut Group’s Funding

Lorillard Tobacco, a unit of Loews Corp., lost a bid to have a judge cut funding to an anti-smoking group that Lorillard claims ran advertisements that denigrated tobacco companies in violation of a 1998 settlement.

Delaware Chancery Court Judge Stephen P. Lamb ruled Monday that the American Legacy Foundation’s ads, which featured the slogan “truth,” didn’t violate the terms of the $206-billion settlement tobacco companies reached with state attorneys general in 1998. The American Legacy Foundation was created with funds from the settlement.

“There are no scurrilous and vitriolic attacks” in the ads seeking to persuade young people not to smoke, Lamb said in his 83-page decision.

“There is no cruel slander. There is no public ridicule or calumny.”

The ruling protects the foundation’s access to millions in funds from the state settlement and will allow it to continue running ads about the dangers of smoking, said Cheryl Healton, the group’s president. The Washington-based group develops programs focusing on the health effects of tobacco use.

Lamb’s decision “will allow our foundation to continue to tell American youths the facts about tobacco and the industry that markets its products to them,” Healton said in an interview. “This decision will save hundreds of thousands of lives.”

Peter Keegan, a spokesman for Loews Corp., and Ronald Milstein, a Lorillard vice president, didn’t return calls seeking comment on the decision.