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Exxon prepares to sue Calif. cities, says they contradict themselves on climate change

LEGAL NEWSLINE

Sunday, December 22, 2024

Exxon prepares to sue Calif. cities, says they contradict themselves on climate change

Tarrant

Tom Vandergriff Civil Courts Building in Fort Worth, Texas

FORT WORTH, Texas (Legal Newsline) - Some government officials in California are hypocrites pushing a political agenda that involves using private lawyers to sue and demonize ExxonMobil, the company is now arguing in a Texas state court.

On Jan. 8, Exxon took the first step towards suing those who orchestrated climate change lawsuits in California by asking the Tarrant County District Court to allow it to question an assortment of government officials and a Hagens Berman lawyer. The company says those local officials are talking out of both sides of their mouths - blaming Exxon for an impending flooding disaster while not disclosing that alleged threat to possible investors in their bond offerings.

In 2017, the counties of Marin, Santa Cruz and San Mateo and the cities of San Francisco, Oakland, Santa Cruz and Imperial Beach filed suit against dozens of energy companies, including Exxon and 17 other Texas-based businesses, over climate change. The company has previously been targeted by the attorneys general of Massachusetts and New York.

“It is reasonable to infer that the municipalities brought these lawsuits not because of a bona fide belief in any tortious conduct by the defendants or actual damage to their jurisdictions, but instead to coerce ExxonMobil and others operating in the Texas energy sector to adopt policies aligned with those favored by local politicians in California,” attorneys for the company wrote.

In doing so, they must have lied to potential investors in their respective bond offerings, the company claims.

Statements made to potential investors contradict allegations made by the municipalities when they sued the energy industry, the filing says. For example:

-San Mateo County’s complaint says it is “particularly vulnerable to sea level rise” and that there is a 93% chance the county experiences a “devastating” flood before 2050. However, bond offerings in 2014 and 2016 noted that the county “is unable to predict whether sea-level rise or other impacts of climate change or flooding from a major storm will occur";

-Imperial Beach alleged a similar danger from sea level rise, claiming coastal flooding will cause more than $38 million in damages and its economic vulnerability is valued at more than $106 million. However, Exxon says, the city has never warned investors that such disasters await; and

-Marin County alleges a 99% risk it will experience a devastating flood before 2050 in its lawsuit but has not disclosed that to investors in bond offerings, Exxon says.

The company makes similar claims about the lawsuits filed by San Francisco, Santa Cruz city and county and Oakland.

“In 2014 and 2017, San Francisco circulated bond offerings for its Municipal Transportation Agency that do not even contain the words ‘global warming’ or ‘climate change,’” Exxon’s petition says.

“The word ‘flood’ appears only once in these bond offerings – to disclose the absence of ‘insurance policies covering earthquake, flood, environmental pollution or other, similar risks.’”

Exxon goes on to call the municipalities “eager consumers of energy” that emit substantial amounts of greenhouse gases.

Exxon believes 16 individuals possess evidence that would allow it to file a lawsuit that would likely contain a claim for civil conspiracy.

Notable among the group is Matt Pawa, a Hagens Berman attorney instrumental in creating a “playbook” discussed at a conference in La Jolla, CA, and carried out by the AGs of New York and Massachusetts and the California local governments, Exxon says. He represents San Francisco and Oakland in their lawsuits.

Exxon has also been locked in a dispute with New York AG Eric Schneiderman and Massachusetts AG Maura Healey. Those AGs have issued subpoenas to the company as they investigate whether it misled investors about its impact on climate change.

A recent Times Union article showed that Schneiderman invested between $50,000 to $75,000 in Vanguard Energy ETF. That fund’s biggest holding is Exxon.

“A collection of special interests and opportunistic politicians are abusing law enforcement authority and legal process to impose their viewpoint on climate change,” Exxon says.

“This conspiracy emerged out of frustration in New York, Massachusetts and California with voters in other parts of the country and with the federal government for failing to adopt their preferred policies on climate change.

“But rather than focusing their efforts in the marketplace of ideas and adopting a strategy of persuasion, the members of this conspiracy chose to advance their political objectives by imposing unlawful burdens on perceived political opponents.”

Exxon filed suit in Texas federal court in response to the subpoenas issued by Schneiderman and Healey. It has since been transferred to New York and remains pending.

"The Court is uncertain if it is common practice for attorneys general to begin to investigate a company after reading an article that accuses a company of possibly committing wrongdoing decades ago," U.S. District Judge Ed Kinkeade wrote when he sent the suit to New York because that’s where Schneiderman held a press conference to announce his investigation.

"What the Court does know is that Exxon has publicly acknowledged since 2006 the possible significant risks to society and ecosystems from rising greenhouse gas emissions, yet the attorneys general have only recently felt compelled to look further into Exxon's documents from the last 40 years to see if Exxon knew more than it shared with the public and investors about climate change."

In addition to Pawa, Exxon seeks to depose: John Beiers, San Mateo County Counsel; John Maltbie, San Mateo County Manager; Jennifer Lyon, city attorney for Imperial Beach; Andy Hall, city manager of Imperial Beach; Serge Dedina, mayor of Imperial Beach; Brian Washington, county counsel of Marin County; Matthew Hymel, county administrator of Marin County; Barbara Parker, city attorney of Oakland; Sabrina Landreth, city administrator of Oakland; Dennis Herrera, city attorney of San Francisco; Edward Reiskin, director of transportation of San Francisco’s MTA; Dana McRae, county counsel for Santa Cruz; Carlos Palacios, assistant county administrative officer of Santa Cruz; Anthony Condotti, city attorney for Santa Cruz; and Martin Bernal, city manager of Santa Cruz.

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