By Dana Drugmand

Massachusetts Attorney General Maura Healey sued ExxonMobil on Thursday in the first state lawsuit alleging both consumer and investor fraud over climate risks. 

Healey said that while Exxon has long known its products drive climate destabilization, the world’s largest publicly traded oil and gas company has misled consumers with deceptive advertising and failed to disclose climate-related risks to its investors. The AG said Exxon has also failed to disclose how catastrophic climate impacts from continued fossil fuel burning could be a larger risk to the global economy. 

“Exxon has known for decades about the catastrophic climate impacts of burning fossil fuels—its chief product,” Healey said. “Yet, to this day, Exxon continues to deceive Massachusetts consumers and investors about the dangerous climate harms caused by its oil and gasoline products and the significant risks of climate change—and efforts to address it—to Exxon’s business. We are suing to stop this illegal deception and penalize the company for its misconduct.”

The complaint, filed in Suffolk County Superior Court, follows a three-year investigation that Exxon has vigorously fought. The suit was filed just two days after the start of the trial in New York State’s similar lawsuit against the oil giant, which is being heard in New York Supreme Court. The New York attorney general’s office filed its lawsuit, which alleges only investor fraud in violation of the state’s anti-fraud law, the Martin Act, on this same date a year ago.

The Massachusetts complaint alleges Exxon repeatedly violated state laws and regulations regarding consumer and investor protections. The suit, while similar to New York’s case, has additional claims including the broader claim that Exxon misled investors about systemic financial risks relating to climate change. 

“Exxon has not been honest with investors,” Healey said after the suit was filed. “Exxon knows that continued burning of fossil fuels presents a systemic risk to the global economy.” 

The Massachusetts lawsuit also alleges Exxon misled consumers and engages in extensive green-washing—claiming its products are somehow compatible with a clean environment— in advertising and the marketing of its products. For example, Exxon claims that its gasoline and diesel oil products like “Synergy” and “green” Mobil 1 oil reduce CO2 emissions and enhance environmental performance, when in fact they are fossil fuels that contribute to transportation-sector emissions—the largest source of greenhouse gas emissions in the state. 

“Exxon’s products are a leading cause of climate change, not a solution,” Healey said. And while Exxon has contended her investigation and similar legal proceedings against it are “politically motivated” and part of a conspiracy, Healey told reporters that the case is simply about fraud. 

“It’s about the deception and misrepresentation made to every investor and every consumer,” she said. “That deception we allege continues to this day.”

Healey said her suit seeks relief in the form of civil penalties, attorney and investigation fees and monetary damages as well as an injunctive order to force Exxon to stop its alleged deception. The lawsuit is brought under the Massachusetts Consumer Protection Act and will be prosecuted by the AG’s Energy & Environment Bureau, with assistance from the Insurance & Financial Services Division and Consumer Protection Division. 

Judge Rejects Exxon’s Emergency Motion, Lawsuit Follows 

Massachusetts Superior Court Judge Heidi Brieger cleared the way for the suit earlier Thursday by denying Exxon’s emergency motion for a time extension. She ruled from the bench after a hearing to consider Exxon’s motion, which it filed one week after Healey’s office notified Exxon of its intent to sue. That Oct. 10 notification opened a five-day window for Exxon to respond and for the parties to initiate a “meet and confer” to discuss allegations before a lawsuit is filed. Exxon asked to put off the meeting until mid-November because its core attorneys would not be available until after the New York trial. 

Brieger denied that motion, saying,  “I don’t believe the extension is necessary for the reasons offered.”

“We’re not trying to block a lawsuit, at all,” Exxon attorney Thomas Frongillo said. “But we do have a statutory right to confer in person,” referring to a section of the Massachusetts Consumer Protection Act that requires an intended defendant to have “an opportunity to confer with the attorney general in person or by counsel or other representative as to the proposed action.”

“But that’s somewhat misleading,” Brieger responded, voicing skepticism at Exxon’s excuse that it could not meet in person right away. She said that there is surely someone from Exxon who could come and confer, though it may not be the company’s preferred representation. Exxon, she reasoned, is a large multinational corporation with many lawyers, not a “mom-and-pop shop” or sole proprietor. 

The legal process began when Healey served the company with a Civil Investigative Demand (CID) in April 2016. That followed a series of journalistic investigations that revealed the company’s decades-long history of sowing doubt about climate science. Exxon countered by trying to stop the investigation in both state and federal courts and Exxon has still not responded to the CID, which it is appealing in Massachusetts court.

“Exxon fights every effort to hold the company accountable,” Healey said. “We know this case isn’t going to be easy.” 

Despite Exxon’s resistance, the AG’s office said it has enough evidence to file the suit without the documents demanded in the CID. 

“We’re in a position having compiled sufficient information to file a complaint against Exxon,” Richard Johnston, chief legal counsel for the AG’s office, said during Thursday’s hearing. “We would like to move forward with our plan to sue Exxon as soon as we can.” 

Minutes later, they had.

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.”