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Still fighting after all those billions

Three years after landmark tobacco settlement, mixed record of success.

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The radio ad starts with a teenager calling Lorillard, the tobacco company.

The boy has a business proposition: He's a dog walker, and his dogs frequently do what dogs will do. Instead of his charges watering fire hydrants, however, the boy wants to sell some of the canine output to the company, which uses urea to boost the nicotine performance in its cigarettes.

"I've got Chihuahua, golden retriever," the caller says. The company's consumer department quickly hangs up.

That national spot is among a handful that irritated Lorillard so much it recently brought a lawsuit against the ad's producer, the American Legacy Foundation, which has sued back. Ironically, Legacy receives some of its funding from Lorillard as part of the landmark $246 billion settlement reached between the state attorneys general and the tobacco companies in 1998.

The litigation, in a way, is emblematic of how the participants feel about the settlement itself: Three years after one of the biggest legal settlements in US history, both sides are still fighting. Hardly anyone is happy.

To be sure, elements of the accord have had an impact. Smoking among teens, for instance, has fallen to its lowest levels in 10 years. But companies are also spending more money on marketing – including in venues like convenience stores, where teens hang out.

How the settlement is viewed is important because it could influence the momentum in the Justice Department's own lawsuit against the tobacco companies. Last December, the government listed new restrictions it would ask a federal judge to impose if the suit is successful. These included changes in the graphics on cigarette boxes, the elimination of "low tar" and "light" categories, and restrictions on marketing promotions.

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