By Karen Savage
After an anticlimactic hearing on whether the New York attorney general’s office hurt Exxon’s reputation when it dropped two of four fraud charges against it at the end of the oil giant’s climate fraud trial, New York Supreme Court Judge Barry Ostrager said he expects to rule on both Exxon’s motion and the two remaining charges by the end of next week.
The hearing itself went quickly, with both sides opting to forego oral arguments and let their court filings speak for themselves.
New York Attorney General Leticia James initially charged Exxon with four fraud-related claims, including violations of New York’s powerful Martin Act. Her office dropped two of the charges—claims of equitable fraud and common law fraud—during closing arguments of the trial.
Exxon is alleging that the AG harmed the company’s reputation by dropping those charges. The company is asking Ostrager to issue an order dismissing the two discontinued fraud charges with prejudice, meaning the charges cannot be refiled—which Ostrager already said he would do.
Exxon is also asking Ostrager to state in the order that the evidence shown at trial did not indicate the company intended to defraud shareholders, nor did the evidence show that shareholders relied on potentially deceptive information when making investment decisions. Alternately, the company wants Ostrager to order the AG to issue a stipulation that includes the same statement.
The AG’s office rejects that notion and says Exxon violated the Martin Act and another statute when it deceived shareholders about the risk posed to their investments by climate change. Therefore, it contends, the company’s reputation couldn’t have been harmed.
The AG’s office has asked the court to hold the company liable for between $476 million and $1.6 billion in shareholder losses. It is also asking the court to order an examination of Exxon’s past and future accounting methods and to appoint an independent monitor to supervise the process.
Exxon has also been forced to turn over years of internal documents, which could also be used by others to bring more civil suits. The company is already facing fraud allegations in Massachusetts, where Attorney General Maura Healey filed suit in October. Exxon has already filed a motion to move that case to federal court.