By Karen Savage
Massachusetts will become the second state to file suit against Exxon, accusing the oil giant of climate fraud.
Massachusetts Attorney General Maura Healey told Exxon in a letter last week that her office intends to charge the oil giant with violations of the Massachusetts Consumer Protection Act. She said the AG’s office believes Exxon has engaged in unfair or deceptive acts in marketing and selling of its products to consumers in her state. Healey said the company has engaged in similar deception when marketing and selling Exxon securities to investors in the state.
Healey’s letter was first reported by Bloomberg Environment. It comes as Exxon prepares to face trial in New York next week for allegedly defrauding investors by deliberately misleading them about the risks posed to its business by climate change. The company is also facing numerous climate liability lawsuits filed by municipalities across the country.
Healey served Exxon with a Civil Investigative Demand (CID) in April 2016 as part of an investigation into whether the company deceived Massachusetts shareholders by failing to divulge potential climate change-related risks to their investments. Healey has also investigated whether the corporation violated Massachusetts consumer protection laws by misleading consumers on the impacts of its products on climate change.
Exxon has tried for years to shake the investigation, contending that Healey lacks jurisdiction, is violating its First Amendment rights and that the examination is politically motivated. Those premises have been rejected by both state and federal courts, which have ruled that Healey has the authority to conduct the examination. The Supreme Court declined to hear Exxon’s appeal.
One appeal—of a New York court’s ruling that Healey has the authority to issue the CID—is still outstanding before the Second Circuit and Healey agreed to pause her efforts to enforce the CID until that ruling.
Exxon said Healey’s letter to inform it of the pending suit was “highly unusual” and accused the AG of making a “tactical” decision to serve the notice on the eve of its New York trial, which is scheduled to start next week.
“ExxonMobil has not provided your office with any discovery,” said Theodore V. Wells, lead attorney for Exxon.
“To the extent you intend to obtain that discovery now through a civil suit, your action would violate the letter and spirit of the tolling agreement. It would be an improper attempt to obtain the discovery requested in the CID and therefore a breach of the agreement,” Wells said, theorizing that the timing of the notice is further evidence that Healey’s investigation is part of a conspiracy against the oil giant.
Healey’s office fired back, telling Exxon that there is sufficient other evidence to launch the suit, which “does not seek to enforce the CID as issued and does not violate a prior agreement.”
“Throughout the three and a half years during which ExxonMobil has delayed enforcement of the CID issued to it, our office has continued its investigation through numerous other avenues and has sufficient grounds for the Commonwealth’s complaint,” Richard A. Johnston, chief legal counsel for the AG’s office wrote in an email on Wednesday.
Johnston said the AG’s office would be available to meet with the company on either Thursday or Friday to resolve its claims against the company. Under state law, the AG is required to provide potential defendants an opportunity to meet with the AG’s office at least five days before a suit is filed.
Johnston’s letter and proposed meeting times prompted Exxon to file an emergency motion requesting the Massachusetts Superior Court extend the time it has to meet with Healey’s office until after its New York trial concludes on Nov. 12. The company alleges that the timing of Healey’s letter is intended to “interfere” with, “disrupt and disturb” the company’s ability to prepare for its New York trial. A hearing on the emergency motion is scheduled for next Thursday.
Healey’s office said after three years of investigating, it is ready to move forward.
“ExxonMobil’s continuing, baseless challenges to the CID are not, as you suggest, a reason that the Commonwealth must accept more delay in filing suit.”