Exxon Wants Massachusetts Climate Fraud Suit Moved to Federal Court

By Karen Savage

Exxon wants Massachusetts’ climate fraud case against it moved to federal court.

In a motion filed Monday in U.S. District Court, Exxon contends the suit, which says the oil giant violated Massachusetts consumer protection laws, instead involves federal statutory, regulatory and constitutional issues. It says the federal court should consider those issues and dismiss the case.

The Massachusetts complaint alleges Exxon repeatedly violated state laws and regulations by deceiving investors on risks posed to the oil giant by climate change and by misleading consumers on the harm done to the climate by the use of its products. It was filed in Suffolk County Superior Court in October. The lawsuit is similar to the one New York filed against Exxon, whose trial concluded last month and is awaiting a verdict in New York Supreme Court. Exxon did not attempt to move that suit to federal court.

“It is not common for that to happen,” said Paul Nolette, a political science professor at Marquette University, adding that most suits filed by AGs are heard in state courts. “Typically these lawsuits that state AGs are bringing either individually or as part of a broader coalition are based squarely on state law, so state consumer law or anti-trust law.”

Exxon, however, is following a pattern of trying to move as many cases as possible to federal court, where it believes it will be more successful in fending off climate-related claims.

“It is clear that although nominally premised on state law and cloaked as consumer protection, this lawsuit at its core seeks to restrict the production, sale, and use of fossil fuels, attempting to usurp policy and foreign affairs roles properly reserved to the federal government,” Thomas C. Frongillo, an Exxon attorney wrote in a notice of removal filed Friday in U.S. District Court for the District of Massachusetts.

Exxon also said the state’s suit is “in essence” a class action suit.

The jurisdictional issue has been central to climate liability suits filed against Exxon and other fossil fuel companies by dozens of municipalities across the country, but this the first climate fraud-related case to be bumped to federal court. 

Exxon is alleging the suit is removable under the Class Action Fairness Act (CAFA) which states that certain class action suits belong in federal court, a strategy Nolette said was recently—and unsuccessfully—tested in Mississippi ex rel. Hood v. AU Optronics Corp.

In that case, the defendants, an electronics and technology company, sought to have an antitrust lawsuit filed by the Mississippi attorney general removed to federal court, contending the AG was acting as a class action attorney. When the suit was remanded to state court, the defendants appealed to the Supreme Court, which ruled the case belonged in state court and said state AGs don’t fall under CAFA when bringing certain types of cases.

Nolette said Exxon’s argument appears to be somewhat similar.

“They’re making a more specific argument, that ‘We’re not saying the Massachusetts attorney general, anytime that they’re using a consumer claim should be in federal court. What we’re saying is when they try to use state consumer protection law to regulate climate, which is something the federal government should do in its jurisdiction, that’s going beyond the AG’s power and should be in federal court,’” Nolette said. He added that Exxon likely didn’t use that strategy in New York because the New York AG alleged violations of the Martin Act, which is more clearly rooted in state law.

Healey’s office said it intends to file a motion to remand the suit back to state court.

The fossil fuel industry has fought to move climate liability suits to federal courts, where precedent has favored their cases for dismissal, a strategy that worked in getting  cases brought by Oakland/San Francisco and New York City dismissed.

More recently, however, federal courts have returned cases to state courts, where the majority have been filed. Suits filed by Colorado municipalities, Baltimore and the state of Rhode Island  are currently proceeding in state court, while the companies appeal the remand orders in circuit courts. The Ninth Circuit is also considering the same jurisdictional question for several cases brought by California communities. 

Nolette said he believed the Massachusetts case would be returned to state court. 

“Cities have had some success at pushing back against removal and if anything, I think state AGs have an even stronger case to put it back into state court since they have the long history of bringing consumer protection, antitrust and other state law claims and not getting removed to federal court,” he said.