The American Legacy Foundation, an antismoking group created with more than $1 billion from a huge 1998 tobacco settlement, sued the Lorillard Tobacco Company yesterday in an effort to preserve an advertising campaign that has piqued the interest of teena

The lawsuit, filed in Delaware state court, amplifies an already contentious dispute over how far public health advocates can go to dissuade teenagers from smoking without violating the settlement or libel laws, especially through radio and television commercials that depict tobacco companies as underhanded while mentioning them by name. Lorillard was enraged by a radio advertisement contending that it flavors cigarettes with urea, a chemical found in urine, and it threatened to sue the foundation last month for breaching the $206 billion settlement between tobacco companies and 46 states. Under the agreement, the tobacco companies agreed to give the foundation $1.5 billion over five years to educate the public about the risks of smoking and to discourage young people from picking up the habit. The foundation's campaign included a television commercial that showed body bags in front of Philip Morris's headquarters and a newspaper advertisement depicting corpses in morgues. The tactics have worked, researchers at the University of Michigan said. In the last five years they have contributed to a 42 percent drop in smoking among eighth graders, the researchers said. In return for its tobacco money, the foundation is barred from engaging in "any personal attack on, or vilification of" a tobacco company or its employees. The foundation says it does not malign anyone but only states the "truth," as its advertising campaign is called. Lorillard, a unit of the Loews Corporation, scoffed at that contention in a letter to the foundation last month, promising to curb the "deceitful, callous, malicious" group in court. In particular it wants future spots toned down. As a defensive tactic, the foundation sued first, asking a judge to declare it exempt from enforcement under the tobacco settlement. After all, the foundation argues, it was created by the accord, but it was not a party to the original agreement. "The truth campaign is saving America's children from tobacco-related death and disease, and Legacy will not allow a tobacco company to silence it," said Dr. Cheryl Healton, the foundation's chief executive. Despite the antagonism between them, which has been brewing since the commercials were broadcast last summer, Lorillard said it would not withhold payments to the foundation. "The foundation is trying to distance itself from the very agreement that funds them," Steve Watson, a Lorillard spokesman, said adding, "What other legal consumer product company could be accused of adding dog urine to their product and not be expected to respond aggressively?" In the commercial, which is no longer being broadcast, a teenager who says he is a dog walker calls Lorillard's offices, offering to provide the cigarette maker with "quality dog urine." The reason: it contains urea, which, he says, is a chemical that is also put into cigarettes. The foundation has long been accused of stretching the limits of the tobacco settlement. Because it spends about $100 million a year on its antismoking campaign, a tiny fraction of the $8 billion tobacco companies spend to promote their products every year, the foundation said its advertisements were deliberately provocative to stand out in a "marketplace in which it is drowned out."

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