NY Judge Tosses Exxon Challenge to Climate Change Investigations, for Now

While the case likely will be refiled, Exxon may not enjoy the same favor it received from a Texas judge who sided with Exxon and was against states' climate probes.

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Darren Woods, chairman and chief executive of ExxonMobil. A New York judge has dismissed Exxon's lawsuit challenging climate change probes of two state attorneys general. Credit: REUTERS/Brendan McDermid

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A lawsuit by ExxonMobil seeking to block climate change fraud investigations by the attorneys general of Massachusetts and New York has been dismissed—at least for now. The ruling came from the New York federal judge who took over the case last week after a judge in Texas transferred it to her jurisdiction.

Although the order by U.S. District Court Judge Valerie Caproni puts an end to the lawsuit filed by Exxon in Texas last year, the case may be refiled in as little as a month.

Caproni issued her order within a day of being assigned the case. It was a mostly procedural action to reset the suit for consideration in New York. She set an April 12 deadline for Exxon and the attorneys general to file briefs outlining how the two sides expect to proceed.

In her two-page order, the judge did not address the merits of Exxon’s motion for a preliminary injunction that sought to put a halt to the attorneys general investigations.

An Exxon spokesman did not respond for a request for comment. Nor did the spokespersons for the attorneys general.

The New York and Massachusetts investigations focus on whether past statements by Exxon about climate change science and its risks to the company constituted a form of fraud against the public and its shareholders.

The investigations, launched by New York Attorney General Eric Schneiderman and Massachusetts Attorney General Maura Healey, provoked Exxon to file a lawsuit to first derail the Massachusetts probe and later the New York investigation.

Exxon argued the investigations were politically motivated and intended to silence the company and any others who did not share the same views of climate change as the two attorneys general.

The company found a sympathetic ear in Texas federal judge Ed Kinkeade, a Republican appointed to the bench in 2002 by President George W. Bush.

In an extraordinary ruling last year, Kinkeade ordered Healey and Schneiderman to appear for depositions under questioning by Exxon lawyers. Kinkeade justified the order by saying he thought Healey, especially, had acted in bad faith when she issued a civil investigative demand seeking Exxon’s climate records.

While the case likely will be refiled, Exxon may not enjoy the same favor it received from Kinkeade, who consistently sided with Exxon and whose order transferring the case to New York echoed many of the company’s claims.

Pat Parenteau, a professor of environmental law at the Vermont Law School, said the tables will be turned now that the case is being heard in a jurisdiction more attuned to high-stakes financial litigation.

“I think there will the presumption by this judge that the government is acting rationally within its authority to conduct these kinds of investigations,” he said. “She will put the burden on Exxon to show why the AGs don’t have the authority to conduct investigations, unlike Kinkeade who put the burden on the AGs to justify their investigations.”

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