Posted on March 30 2018
NY & MA AGs v Exxon Mobil
A brief history. Basically all parties sued and Counter sued
In June of 2017 NY AG Schneiderman filed suit against Exxon-Mobil. In this particular Federal Court Filing, Schniederman stated, he had evidence of “potential materially false and misleading statements by Exxon” as it related to Investors.
- Exxon Mobil of misleading investors about how it accounts for climate change risks...
- Exxon used a number it called a “proxy cost” for greenhouse gasses.
- An attempt to calm the fears of potential changes to government policy that would make the production and burning fossil fuels farmore expensive.
- “The exercise described to investors may be a sham,”
The June 2017 complaint offered the general public, environmental watchdog groups and investors a front tow seat, inside the AG’s ongoing fraud investigation. The AG continued to press Exxon Mobil to turn over more Company documents. AG Schneiderman was undeterred by Exxon’s litigious stonewalling. His complaint went on to say the following;
- “Exxon’s own documents suggest that if Exxon had applied the proxy cost it promised to shareholders, at least one substantial oil sands project may have projected a financial loss, rather than a profit, over the course of the project’s original timeline,”
Exxon continued to fight Schneiderman’s requests for additional information concerning the Company’s climate change policies. Exxon fought request in both state and federal court. Exxon’s “argument” was:
- “Exxon should not have to turn over records because the New York prosecutor’s probe was politically motivated and abusive to the company.”
I assume Exxon Chiefs didn’t pay attention to their ninth grade civics class. Or they some how thought that intentionally deleting emails, ignoring subpoenas or stonewalling production of documents related to the MY & MA AGs lawsuit would fly.
Oddly enough,at almost the same period of time Exxon was fine $2M for violating the lawful Russian Sanctions. Yes I know $2M is pennies to a company with billions in annual profits. july 2017 Treasury Announcement Below.
March 29, 2018 Ruling. It’s BRUTAL.
As a general rule, Federal Judges tend to not overly inflect or emote in their rulings. Occasionally there are excepts, Case in point Judge Valier Caproni wrote in her 48 Page Ruling:
- “The relief requested by Exxon in this case is extraordinary: Exxon has asked two federal courts — first in Texas, now in New York — to stop state officials from conducting duly-authorized investigations into potential fraud,”
- “It has done so on the basis of extremely thin allegations and speculative inferences,”
Judge Caproni went on to levy this scathing rebuke. Aptly noting that Exxon filed in both state and federal courts in New York and Texas, respectively. In some ways it’s understandable that Exxon would file in Texas, given their Company is headquartered there, but still Exxon tried to use what I assume is “home court advantage”. Which spectacularly backfired on them. As evident in Judge Caproni’s Order.
- “running roughshod over the adage that the best defense is a good offense.”
- “The factual allegations against the AGs boil down to statements made at a single press conference and a collection of meetings with climate-change activists,”
- “Some statements made at the press conference were perhaps hyperbolic, but nothing that was said can fairly be read to constitute declaration of a political vendetta against Exxon.”
As I’ve said repeatedly, always read the footnotes. They can be delicious.
- Exxon’s attempt to argue relevance in this Court but not in the New York Supreme Court reviewing the
Subpoena smacks of a “have your cake and eat it too” approach. (emphasis added)
- “The legal jiu-jitsu necessary to pursue this strategy
would be impressive had it not raised serious risks of federal meddling in state investigations and led to a sprawling litigation involving four different judges, at least three lawsuits, innumerable motions and a huge waste of the AGs’ time and money.”(emphasis added)
Judge Ciprona conclusion, just might be the best order I’ve read all day.
- “Moreover, Exxon’s internal documents regarding reporting of reserves may be relevant to any number of theories, including, for example, whether Exxon understood the science of climate change in fundamentally different ways than it told its investors and the public.“ (emphasis added)
- Exxon’s preemption claim is DISMISSED.
CONCLUSION For the reasons given above:
- the motions to dismiss are GRANTED
- Exxon’s motion for leave to amend is DENIED as futile.
- The Complaint is DISMISSED WITH PREJUDICE.
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