ExxonMobil Corp. sued to block a subpoena issued last month by the attorney general of the U.S. Virgin Islands seeking almost 40 years of documents on climate change.
In his demand for records, Virgin Islands Attorney General Claude Walker said Exxon may have violated the territory's anti-racketeering law, defrauding the government and consumers with the company's statements on climate change. It is the first time a prosecutor has cited racketeering law to probe Exxon over its longtime denial of climate change and its products' role in it, according to legal authorities.
Exxon alleged that the subpoena is invalid because it seeks records beyond the five-year statute of limitations, and that it violates the company's constitutional rights and "constitutes an abuse of process, in violation of common law." Exxon, based in Irving, Texas, filed the complaint in Tarrant County District Court in Texas. It listed Walker as a defendant, along with the Washington, D.C. lawyer and law firm representing the territory in the probe.
The subpoena is "a pretextual use of law enforcement power to deter ExxonMobil from participating in ongoing public deliberations about climate change and to fish through decades of ExxonMobil's documents with the hope of finding some ammunition," Exxon said in the suit. "The chilling effect of this inquiry, which discriminates based on viewpoint to target one side of an ongoing policy debate, strikes at protected speech at the core of the First Amendment."
While companies don't usually succeed in blocking such investigative subpoenas, the court filing signals Exxon's intention to strongly contest probes by an expanding number of states. New York, California and Massachusetts are either investigating the company's behavior or considering it, and Walker was among 17 attorneys general who announced a coalition last month to take action on global warming.
The investigations began after InsideClimate News reported on the history of Exxon's emerging understanding of climate change science in the 1970s and its subsequent efforts to challenge the scientific consensus. These efforts included financing research organizations such as the Competitive Enterprise Institute, a conservative think tank. The CEI also received a subpoena in the Virgin Islands investigation and said it would contest the request for 10 years of Exxon-related climate change records.
"You are suspected to have engaged in, or be engaging in, conduct constituting a civil violation of the Criminally Influenced and Corrupt Organizations Act," Walker said in the subpoena to Exxon. The company may have engaged "in conduct misrepresenting your knowledge of the likelihood that your products and activities have contributed and are continuing to contribute to climate change in order to defraud" consumers and the government, he wrote.
The Virgin Islands statute is one of the "Baby RICO" laws adopted by more than two dozen states and territories after Congress passed the 1970 Racketeer Influenced and Corrupt Organizations Act, known as RICO. The laws were intended to give officials stronger weapons for prosecuting organized crime. State- and territory-level measures in some cases are broader than the federal version, according to the American Bar Association.
Exxon spokesman Alan Jeffers did not respond to a request for comment.
In a statement, Walker said he would not comment on the merits of the Exxon suit, but defended the investigation and the subpoena. His statement was issued by Linda Singer, partner in the Washington law firm Cohen, Milstein, Sellers & Toll, which was named by Exxon in the suit. Exxon criticizes the Virgin Islands for retaining the firm, calling it "outsourcing" the investigation, "likely on a contingency-fee basis."
"The First Amendment does not shield any company from being investigated for fraud," said Walker, whose jurisdiction covers the U.S. territory's islands in the Caribbean. "Bringing in a private law firm to assist in our investigation of this well-resourced corporation is both necessary and entirely proper. Courts have routinely rejected the arguments that ExxonMobil has raised."
Exxon is complying with a subpoena issued last year by New York State Attorney General Eric Schneiderman in an investigation of whether the company's statements and actions on climate change over almost four decades violated consumer and investor protection statutes. Exxon has turned over more than 10,000 pages of records in the past two months, according to an official in Schneiderman's office.
Walker issued his subpoena more than a week before participating in a press conference in New York by the attorneys general coalition on March 29, according to the Exxon complaint. "The attorneys general press conference was a politically-motivated event, urged on by activists intolerant of contrary views," Exxon says in the suit.
Walker's subpoena seeks documents and communications of all kinds from Jan. 1, 1977, to the present, including documents related to research Exxon conducted or funded. The 16 categories of materials include "research, advocacy, strategy, reports, studies, reviews, or public opinions regarding climate change sent to or received from" dozens of people and groups.
In its lawsuit, Exxon said the subpoena seeks materials related to "88 named organizations, three-quarters of which have been identified by environmental advocacy groups as opposing policies in favor of addressing climate change or disputing the science in support of climate change." The subpoena also demands similar materials from 54 named scientists, professors and other professionals, Exxon says. In the copy of the subpoena filed in the suit, Exxon redacted the names of individuals and organizations.
The subpoena "appears to target individuals and entities that hold policy views with which Attorney General Walker disagrees," Exxon says in the suit. "Eighty percent of the individuals in this request, who have been identified in the media as having a viewpoint on climate change, either oppose policies in favor of addressing climate change or dispute the science in support of climate change."
Walker also requested Exxon communications related to articles by ICN and the Los Angeles Times on Exxon and climate change, published since last Sept. 1, as well as materials concerning investigations of Exxon's statements on global warming by "any state attorney general, other enforcement agency, or environmental or other organization."
Sen. Sheldon Whitehouse (D-R.I.) and several other federal lawmakers have long advocated that the Justice Department investigate whether Exxon and other fossil fuel companies violated the RICO statute by disputing for years the role of fossil-fuel burning in global warming.
"The fossil fuel effort to mislead the public relied on a complicated web of dark money and front groups that will be difficult to unravel," Whitehouse said after the scope of the Virgin Islands probe became public. "Attorneys general bringing investigative resources to bear on the question of fraud will be a big help in uncovering the truth."
Exxon raised some valid issues in response to the subpoena while coating it in hyperbole, said Pat Parenteau, a professor of environmental law at the Vermont Law School. Walker will have to show good reasons to suspect that the company broke the law, he said.
"The most serious question is whether the attorney general has any basis to suspect that Exxon has engaged in activities that violate the statutes about obtaining money by false pretense and fraud," Parenteau said. "Hopefully there is something more than unsubstantiated suspicion to support this."