Lorillard Tobacco Co. may face the wrath of state attorneys general next week if it withholds a $25.9 million payment to anti-tobacco non-profit American Legacy Foundation (ALF).
The payment, scheduled for March 31, is part of the 1998 Master Settlement Agreement between tobacco companies and 46 states. Lorillard, which sued Washington, DC-based ALF in February 2002 for violating the MSA and “vilifying” Lorillard in ads, will keep the payment in escrow until the suit is settled. Lorillard couldn’t be reached for comment at press time.
Vermont Attorney General Bill Sorrell, who heads the National Association of Attorneys Generals’ tobacco committee and sits on ALF’s board, says NAAG likely will act quickly if the payment isn’t made by March 31, per Advertising Age.
Greensboro, NC-based Lorillard filed suit after ALF broke a radio spot that implies Lorillard adds dog urine to cigarettes (April 2002 PROMO). ALF argued in a counter suit that it isn’t governed by the MSA, but almost all of its $1.4 billion national public education fund is paid for by tobacco company payments. The foundation also argued at the time that its ads “sometimes focus on tobacco industry actions and marketing practices” but don’t vilify individuals or specific tobacco companies.
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