The Delaware Chancery Court yesterday sided with the American Legacy Foundation in a suit filed in 2002 by Lorillard Tobacco Co., saying that its youth-smoking campaign, "truth," does not vilify nor personally attack tobacco companies or their employees. The court also found that the foundation did not violate the 1998 Master Settlement Agreement.
Lorillard's suit was based on the foundation's truth campaign, developed from tobacco company documents. The ads began running in February 2000. Lorillard filed the suit in February 2002 asking the court to stop the ads.
"This decision will save hundreds of thousands of lives and we are grateful for it," said Cheryl G. Healton, president and CEO of the foundation.
Greensboro, NC-based Lorillard did not contest the sincerity of the foundation's ads in the suit, but argued that any advertising that was remotely critical of the tobacco industry would violate the Master Settlement Agreement's vilification clause, the foundation said. The Master Settlement Agreement was reached between the state Attorneys General of 46 states, five U.S. territories, the District of Columbia and America's major tobacco companies to regulate the advertising, marketing and promotion of tobacco products.
"None of the ads subject the [tobacco company] employees to the type of contemptuous language contained in other case law discussing vilification," wrote Judge Stephen P. Lamb, vice chancellor of the Delaware Chancery Court, in his ruling. "Although the employees may be described, either explicitly or implicitly, as liars, greedy executives, or authors of embarrassing documents, the ads do not vilify them."
He added: "ALF's ad campaign consists of a group of cohesive messages: tobacco companies target young consumers to begin smoking, tobacco companies manipulate the chemical composition of cigarettes to increase the addictiveness of the nicotine, and smoking kills. None of these messages violate the anti-vilification clause of the MSA. The messages are based on well-known public facts."
In its most recent set of ads, the foundation ran a campaign called Fair Enough. Complete with cast, theme music and promotional teasers, the ads featured actors playing tobacco employees and consultants. Set in a typical office, the employees dramatize what the foundation deemed unsavory marketing tactics, such as targeting a hipper and younger audience, making flavored products and reaching inner-city minority populations. An audience laugh track between the employees' lines gives the spots a comedic feel.
The foundation said it expects Lorillard to appeal the decision. Ronald Millstein, VP-general counsel for Lorillard, did not return phone messages. However, in May, Millstein said in a statement that the lawsuit was not about money, and that it was not seeking a single cent from American Legacy Foundation.
"They misused money which was to be used explicitly to reduce youth smoking and to educate the public about the health effects of using tobacco products— a calculated smear campaign designed to vilify our company, its people and our industry," Millstein said in the statement.
Lorillard manufacturers the Newport, Kent, True, Old Gold, Maverick, Triumph, Satin, and Max brands.
The foundation, established in 1999 as a result of the $206 billion Master Settlement Agreement, said that the lengthy court battle had threatened to close its doors. The ruling protects the group's access to millions in funds from the settlement allowing it to continue its national youth tobacco prevention campaign. The campaign exposes the tactics of the tobacco industry, the truth about addiction, and the health effects and social consequences of smoking, allowing teens to make informed choices about tobacco use by giving them the facts about the industry and its products. The campaign also includes a mobile tour and several guerilla tactics. The American Journal of Public Health credited the foundation with accelerating the overall decline in youth smoking by 22% in the campaign's first two years, the foundation said.
