Supreme Court Refuses Exxon Appeal, Allows Mass. Climate Probe to Proceed

The U.S. Supreme Court on Monday cleared the way for the Massachusetts’ attorney general to continue her investigation into possible climate change-related deception by Exxon, declining to hear the company’s appeal of a ruling by the Massachusetts Supreme Judicial Court.

The oil giant has been fighting Massachusetts Attorney General Maura Healey’s probe since she launched it in March 2016, issuing Exxon a subpoena-like request for documents that could help her determine whether the company violated state consumer protection laws by misleading consumers on the impacts of its products on climate change. She is also investigating whether the corporation deceived Massachusetts shareholders by failing to divulge potential climate change-related risks to their investments.

Exxon responded by suing Healey in Massachusetts, claiming she lacked jurisdiction and alleging that her investigation was politically motivated. The suit was dismissed in January 2017 by Massachusetts Superior Court Judge Heidi E. Brieger, who ruled that “zealously” pursuing defendants does not make Healey’s actions improper and ordered Exxon to turn over the requested documents.

Brieger’s decision was upheld by the Massachusetts Supreme Judicial Court in April 2018 and last October, Exxon asked the U.S. Supreme Court to review the ruling.

“Today’s #SCOTUS victory clears the way for our office to investigate Exxon’s conduct toward consumers and investors,” Healey wrote on Twitter.

“The public deserves answers from this company about what it knew about the impacts of burning fossil fuels, and when.”

The high court’s decision not to consider Exxon’s appeal is the company’s latest legal setback, which faces not only the continuing investigation in Massachusetts but also a lawsuit filed in October by then-New York Attorney General Barbara Underwood. Letitia James, who was sworn in as the state’s new AG on January 1, has vowed to continue the New York suit, alleging that the company has deceived investors for years by deliberately downplaying the climate risks to its business and long-term financial health.

Exxon is also defending itself against a series of climate change-related lawsuits around the country filed by communities seeking to hold various fossil fuel companies accountable for the costs of climate damages.

As part of Healey’s investigation, she has requested transcripts of investor calls, evidence of internal discussions regarding the filing of Securities and Exchange Commission reports, documentation and research to back up public statements by former Exxon chief executive and now-former Secretary of State Rex Tillerson. She has also sought evidence to substantiate or refute statements made in several Exxon reports—including the 2014 Managing the Risks Report. In it,  Exxon told shareholders it was “confident that none of our hydrocarbon reserves are now or will become stranded” due to climate change, a claim some experts have called deceptive.

Healey is asking Exxon to turn over internal scientific research, information related to public relations and media communication plans, as well as copies of communication with organizations supportive of or backed by the oil industry such as ALEC, the American Petroleum Institute, the Heartland Institute, the George C. Marshall Institute, the Heritage Foundation and others.

Exxon, which is headquartered in Texas, maintained in its appeal to the Supreme Court that it does not directly sell gasoline in Massachusetts, contending that Healey did not have jurisdiction to investigate. It said a Massachusetts court’s decision to allow Healey’s investigation to continue involves a “breathtaking assertion of personal jurisdiction of a nonresident defendant.”

Exxon argued that because its gas is sold through franchises, it does not technically do business in Massachusetts. The company also said it does not control advertisements aired by its franchisees and maintained that the Massachusetts court wrongly relied upon those ads to establish personal jurisdiction. It further argued that because the advertisements don’t discuss climate change, they “could not provide the requisite connection to requests for decades’ worth of documents regarding climate change.”

Exxon also pushed back against Healey in a separate suit filed in federal court in Texas that alleged her investigation requests were an abuse of her political position and a violation of the company’s constitutional rights. That suit also named then-New York Attorney General Eric Schneiderman, who initially launched his state’s investigation.

That suit was eventually moved to New York, where it was dismissed with prejudice in March by U.S. District Court Judge Valerie Caproni, who called Exxon’s allegations that investigations are politically motivated a “wild stretch of logic.”

In her 2017 decision, Judge Brieger denied an Exxon motion to stay the investigation and granted a motion compelling the company to hand over the documents Healey requested.

“The law is clear. The Attorney General’s Office has the authority to investigate Exxon’s conduct toward consumers and investors, and we are proceeding,” said Chloe Gotsis, spokeswoman for Healey’s office.

“The public deserves answers from this company about what it knew about the impacts of burning fossil fuels, and when.”