By Karen Savage
Officials for California municipalities that are suing Exxon for climate liability do not have to submit to discovery in Texas, a state appellate court ruled on Thursday.
Shortly after the municipalities filed their lawsuits, Exxon filed a petition in Texas seeking to force the officials and attorneys to turn over documents and submit to depositions. The company said that information could be used as evidence in future legal action against the California communities.
The oil giant alleges the defendants are part of a large-scale conspiracy by environmental activists and local government officials seeking to penalize the company for its views on climate change. Exxon also alleges that those same local government officials had downplayed climate risks in their bond-offering disclosures, which it contends is evidence that the suits “were not made in good faith.”
The California officials argued that Texas did not have jurisdiction over them, but Tarrant County District Judge R.H. Wallace, Jr. disagreed in 2018 and allowed Exxon to proceed.
The recent opinion, issued by a three-judge panel of the Second Court of Appeals in Fort Worth, reverses that ruling.
“Initiating an out-of-state lawsuit where some discoverable documents might be physically located in Texas and are under Exxon’s control does not invoke the benefits or protections of Texas’s laws,” the panel wrote in its opinion.
“This whole proceeding was an extension of Exxon’s decades-long campaign to deceive people about the role their products play in causing climate change,” Marin County counsel Brian Washington and San Mateo County counsel John Beiers, two of the of the several California officials who would have been subject to discovery, said in a joint statement.
“They’re trying to blame the victims in order to distract attention away from the harm they have caused and the massive costs they’re imposing on communities and taxpayers in California and around the country,” Washington and Beiers said.
San Francisco city attorney Dennis Herrera said Exxon is continuing a pattern in how it opposes the liability suits. “For decades Exxon has tried to mislead the public about its role in causing climate change, and deter and intimidate those who challenge the fossil fuel industry. Exxon’s filing in Texas was another example of its overreach. It was a ploy by Exxon to try to intimidate public officials from doing their job and protecting their residents and taxpayers. It failed,” Herrera said.
While the ruling clearly moved the ball out of the Texas court, the appellate court justices made it clear they did so reluctantly, confessing “an impulse to safeguard an industry that is vital to Texas’s economic well-being, particularly as we were penning this opinion weeks into 2020’s COVID-19 pandemic-driven shutdown of not only Texas but America as a whole.”
Regardless, the panel concluded that “the law simply does not permit us to agree with Exxon’s contention that the potential defendants have the purposeful contacts with our state needed to satisfy the minimum-contacts standard that binds us.”
In a concurring opinion, Justice Bonnie Sudderth lamented that “as intermediate appellate court justices, we are, on occasion, somberly reminded that our job is not to mete out justice, but to apply the law. For me, this is one such occasion.” Sudderth also urged the Texas Supreme Court to reconsider what is required in order for the state to have jurisdiction over defendants.
Exxon spokesman Casey Norton said the company is reviewing the decision and evaluating its options.
“The court recognized that municipalities suing energy companies over climate change are engaged in ‘lawfare,’ which the court described as ‘an ugly tool by which to seek … environmental policy changes,’” Norton said, referring to final thoughts by the panel bemoaning the use of the courts to “do the work that the other two branches of government cannot or will not do to persuade their constituents that anthropogenic climate change has been conclusively proved and must be remedied by crippling the energy industry.”
The justices, who described themselves as a “conservative panel on a conservative intermediate court in a relatively conservative part of Texas” acknowledged that California courts would likely take a very different philosophical approach.
The court has good reason for its view.
A New York court in 2018 dismissed similar allegations brought by Exxon against the New York and Massachusetts attorneys general, who at the time were investigating the oil giant for allegedly deceiving the public about the risks posed to their climate by their products.
That case was initially treated sympathetically by a federal court in Texas but was eventually transferred to New York, where it was dismissed by U.S. District Court Judge Valerie Caproni, who said Exxon’s claims were “implausible” and brought “on the basis of extremely thin allegations and speculative inferences.” Caproni called allegations by the company that the investigations were politically motivated a “wild stretch of logic.”
Both AGs later filed lawsuits against Exxon for fraud. A New York judge ruled last year that the state failed to prove its allegations. A suit filed by Massachusetts Attorney General Maura Healey is proceeding in state court.