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Massachusetts’ Climate Suit Vs. Exxon Belongs in State Court, AG Argues

December 26, 2019 Filed Under: Exxon Climate Investigation, Mass. v. Exxon

Massachusetts' attorney general argues her climate fraud case against Exxon belongs in state court

By Karen Savage

Massachusetts’ climate fraud case against Exxon belongs in state court because it alleges only violations of Massachusetts consumer protection law, according to Attorney General Maura Healey’s office. The AG made its latest arguments to keep the case in state court in a motion filed Thursday in U.S. District Court. 

The AG filed the lawsuit against Exxon in Massachusetts Superior Court in October, alleging the company has long known its products drive climate change and has misled consumers with deceptive advertising, failed to disclose climate-related risks to its investors and failed to disclose how catastrophic climate impacts from continued fossil fuel burning could threaten the global economy. 

Exxon moved the suit to federal court earlier this month. Fossil fuel defendants—which  are facing an increasing number of climate liability lawsuits across the country—believe they will be more successful in federal court.

Suits filed by state attorneys general however, typically involve claims based on state law.

“Contrary to Exxon Mobil Corporation’s self-serving and distorted description of the Commonwealth’s exclusively state-law-based complaint, this case does not concern carbon taxes, prohibitions on the sales of gasoline, or international climate agreements,” attorneys for the AG’s office wrote in the motion.

“The Commonwealth’s complaint does not allege that Exxon has violated any environmental laws or caused a public nuisance, and it seeks no damages for the climate change harms caused by greenhouse gas emissions attributable to Exxon’s operations and products,” the AG’s office  wrote, referring to Exxon’s reasoning for moving the case to federal court.

Exxon also says the Class Action Fairness Act (CAFA) dictates that cases like this, which are in essence class action suits,  belong in federal court, a premise the AG flatly rejects.

“No fewer than four federal courts of appeal and numerous district courts (none cited by Exxon) have held that CAFA does not apply to consumer protection actions brought by state Attorneys General,” the AG wrote. 

Exxon completely failed to prove the suit belongs in federal court, according to the AG’s office, which said Exxon’s removal of the case to federal court “misrepresents the Commonwealth’s detailed allegations, fails to cite controlling precedents, and recycles the same tired conspiracy theories regarding the Commonwealth’s investigation that have been rejected by state and federal courts.”

The court is expected to rule on the motion early next year. 

Filed Under: Exxon Climate Investigation, Mass. v. Exxon

Exxon Wants Massachusetts Climate Fraud Suit Moved to Federal Court

December 3, 2019 Filed Under: Exxon Climate Investigation, Liability Litigation, Mass. v. Exxon

Massachusetts Attorney General Maura Healey can proceed with Exxon climate probe, court rules.

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.

Filed Under: Exxon Climate Investigation, Liability Litigation, Mass. v. Exxon

Massachusetts Becomes Second State to Sue Exxon for Climate Fraud

October 24, 2019 Filed Under: Exxon Climate Investigation, Mass. v. Exxon

Massachusetts Attorney General Maura Healey's climate investigation into Exxon was cleared by the Supreme Court

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.

Filed Under: Exxon Climate Investigation, Mass. v. Exxon

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