Legal Newsline

Wednesday, April 8, 2020

While New York goes to trial, Massachusetts AG finally sues ExxonMobil over climate change statements

Federal Court

By Daniel Fisher | Oct 28, 2019

Maura healey
Masachusetts Attorney General Maura Healey

BOSTON (Legal Newsline) - Massachusetts Attorney General Maura Healey has launched her long-threatened lawsuit against ExxonMobil, accusing the oil giant of “deceiving the world about climate change” and defrauding investors by failing to fully disclose the risks embedded in its portfolio of hydrocarbon reserves.

The 211-page lawsuit filed in state court in Massachusetts last week largely tracks the allegations levied by New York in its own climate lawsuit, which began trial Tuesday. But Massachusetts goes further, accusing ExxonMobil of violating state consumer protection laws by portraying some of its products as producing lower greenhouse gas emissions and failing to inform consumers when they fuel up their cars that they are also warming the atmosphere.

The lawsuit contains long passages that press overtly political claims and could raise significant questions about the protections the First Amendment provides for commercial speech,. Among many other allegations, Healy accuses ExxonMobil of running op-eds in the New York Times that cast doubt on the emerging scientific consensus about human-induced global warming and issuing unacceptably rosy projections about future hydrocarbon demand.

“The gravity of ExxonMobil’s historic and continuing unlawful actions cannot be overstated; the world lost forty critical years to develop and deploy new technologies that would allow an orderly transition away from fossil fuels,” AG Healey says in the complaint. 

“ExxonMobil’s deception deprived investors and consumers of the central facts so essential to their investment and purchasing choices: the knowledge that continued investment in ExxonMobil’s fossil fuel business and production and use of ExxonMobil’s fossil fuel products would bring about cataclysmic outcomes for humankind, many of the world’s species, and the global economy.”

"The Massachusetts Attorney General‘s Office has filed a baseless complaint three years after announcing its politically motivated investigation, during which they have not interviewed a single ExxonMobil employee or gathered one piece of evidence from the company," the company said. "We look forward to refuting the meritless allegations in court."

The company’s lawyer denounced New York’s case as “ridiculous” in opening arguments Tuesday, saying claims the company lied to investors about the risks its business faces from future climate change are “false, twisted and not connected to reality.”

The lawsuits by Massachusetts and New York fit with a campaign by environmental groups and the Rockefeller Brothers Fund to use litigation as an alternative form of regulation against oil and gas producers. Former New York AG Eric Schneiderman consulted with activists before launching a highly publicized investigation of ExxonMobil in 2015. 

Healey’s office has participated in NYU’s State Impact Center, an organization funded by billionaire Michael Bloomberg that places “fellows” in state AG offices to investigate environmental litigation like the ExxonMobil suits. ExxonMobil has criticized the practice as an unacceptable conflict of interest because the AGs only get the assistance of NYU attorneys if they pursue the litigation NYU supports.

The New York lawsuit is primarily a securities case, accusing ExxonMobil of using two sets of books to track expected future global warming costs. ExxonMobil says the lawsuit is baseless, because it couldn’t have deceived investors about internal projections for judging future projects, which were closely held secrets until the AG obtained them via court order. 

The Massachusetts lawsuit includes many of New York’s securities allegations but accuses ExxonMobil more broadly of running a decades-long “greenwashing” campaign to confuse and deceive consumers about climate science. It rests its legal claims on Chapter 93A of the Massachusetts consumer protection statute, which prohibits “deceptive acts or practices,” including statements that could create a “false impression” that cause consumers to buy products they might otherwise avoid.

By presenting itself as “an environmentally responsible corporate citizen” and selling products like “green” motor oil, the Massachusetts AG says, ExxonMobil lied about the global-warming effects of its activities and deceived consumers into using climate-destroying fuels.

It’s a broad charge that opens the possibility of a First Amendment defense. The U.S. Supreme Court has repeatedly protected the free-speech rights of corporations as well as individual citizens with decisions restricting the ability of government to control advertising unless it is clearly false. 

One case that would have tested the limits of this doctrine, Nike vs. Kasky, ended inconclusively after a divided court sent it back down for further review. That 2003 case pitted Nike against activists who said the company made false statements about the treatment of its foreign workers. Nike argued its statements, much like the statements about global warming ExxonMobil has made over the years, were protected speech under the First Amendment.

Want to get notified whenever we write about any of these organizations ?

Sign-up Next time we write about any of these organizations, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

Nike, Inc.Massachusetts Attorney General's OfficeEXXONMOBIL