In the latest volley of her legal skirmish with ExxonMobil, Massachusetts Attorney General Maura Healey said the company continues to mislead the public about the risks of climate change.
“[I]t appears that Exxon may have failed to disclose fully its knowledge of the threats posed by climate change to its businesses and that Exxon continues to make apparently misleading and deceptive statements to investors and consumers,” Healey said in one of two motions filed with a federal court in Texas.
For more than three decades, the company understood climate-driven risk to its businesses, “yet, Exxon continues to maintain that the future is bright for its investors,” attorneys for Healey argued in court briefs filed Monday.
As evidence of the company’s lack of candor, Healey cited an Exxon statement to the U.S. Securities and Exchange Commission this year and a report the company prepared for shareholders in 2014 that said, “We are confident that none of our hydrocarbon reserves are now or will become ‘stranded.’”
Investors face financial peril if substantial portions of Exxon’s vast fossil fuel reserves are unable to be burned because of the international climate agreement limiting carbon dioxide emissions.
“Those assets—valued in the billions—will be stranded, placing shareholder value at risk,” said one of the briefs.
Healey has argued that is reason enough to investigate Exxon under the state’s Consumer Protection Act. Exxon is challenging the probe with a suit filed in federal court in Texas.
Healey’s office is seeking to have that case dismissed because it argues the company should be making its challenge in Massachusetts, not in Texas.
Healey’s office also filed a brief opposing Exxon’s request for an injunction of the state’s civil investigative demand, a fact-finding tool similar to a subpoena. That ordered Exxon to turn over records related to its climate change knowledge and how that information was portrayed to Massachusetts consumers.
Exxon will now be given the opportunity to reply in court, which means it may be months before any rulings are made.
The company did not respond to a request for comment. In its June lawsuit, Exxon blasted the Massachusetts investigation being conducted under the state’s consumer and securities fraud statutes as “nothing more than a weak pretext for an unlawful exercise of government power to further political objectives.”
The New Motions
The theme of Exxon’s lawsuit is that the Massachusetts investigation is a violation of the company’s constitutional rights, including the First and Fourth amendments which protect free speech and prohibit unreasonable searches.
That argument is “threadbare,” Healey’s lawyers said in the recently filed motions.
The investigation was opened in connection with “Exxon’s suspected failure to disclose fully to investors and consumers its knowledge of the serious potential for climate change, the likely contribution of fossil fuels (the company’s chief product) to climate change, and the risks of climate change, including risks to Exxon’s own assets and businesses,” according to the motion.
“One Exxon scientist warned that it was ‘distinctly possible’ that the effects of climate change over time will ‘indeed be catastrophic (at least for a substantial fraction of the earth’s population),’ according to the motion opposing Exxon’s request for an injunction to block the Massachusetts subpoena.
Healey launched her investigation in the wake of disclosures by InsideClimate News that Exxon executives were warned as far back as the late 1970s of the dangers posed by burning fossil fuel.
The second motion filed by Healey—opposing Exxon’s request for an injunction barring enforcement of her subpoena—quotes segments of an ICN investigative series published last year.
Healey also cited stories published later in the Los Angeles Times in conjunction with New York’s Columbia School of Journalism that disclosed additional information about Exxon’s early climate research.
In the motion, Healey wonders how Exxon can complain it will be harmed by complying with the Massachusetts investigative demand when it is already obeying a subpoena issued last year by New York Attorney General Eric Schneider as part of his state’s investigation of the company. The company has surrendered more than 700,000 pages of documents as part of the New York probe.
“Exxon’s cooperation with the New York investigation shows that it can readily comply with Massachusetts’s investigation into subjects similar to those covered by the Massachusetts CID,” according to the 34-page motion.
Healey is not fighting Exxon alone. Attorneys general from 14 states have weighed in to support Healey’s defense of her investigation into Exxon.
The attorneys general from states including Oregon, Maryland, New York, Iowa and Mississippi say Exxon’s attempts to have a federal court short-circuit a state investigation is troubling. They said it usurps states’ rights and could result in state investigations being squashed before they begin.
“Stymying investigations at their earliest stages, before Attorneys General can determine whether any misconduct has occurred, defeats the public interest that the States’ consumer and investor protection laws are designed to protect,” said the brief filed by the attorneys general.
A majority of the signees are members of a coalition of top state law enforcement officials who have vowed to hold fossil fuel companies accountable for their conduct on climate change.
“Without the ability to obtain the basic facts necessary to determine whether a business has violated state laws, state Attorneys General would be hamstrung in uncovering violations of state law and bringing enforcement actions to aid victims and remediate unlawful practices,” they said.