By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.
As California burns, Massachusetts separately moves on climate change.
Last Thursday, following a three-year investigation, Massachusetts attorney general Maura Healey sued Exxon for climate liability fraud (see complaint here).
Massachusetts is the second state to file such a claim, and its lawsuit was filed during the same week that Exxon confronts fraud claims in another state trial, currently ongoing in New York (see Climate Change: New York AG Takes Exxon to Trial This Week; Massachusetts Poised to Follow).
As Climate Liability News reports in Massachusetts Becomes Second State to Sue Exxon for Climate Fraud:
“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.”
In addition, the Massachusetts AG alleges that Exxon has engaged in a greenwashing marketing campaign, according to Inside Climate News, Massachusetts Sues Exxon Over Climate Change, Accusing the Oil Giant of Fraud, as well as castigates the company’s role in contributing to global warming:
The lawsuit further calls out Exxon over “hypocritically touting itself as an exemplary environmental corporate steward” when the company is among the largest corporate contributors to global warming.
“Collectively, as with its historic and ongoing deception campaigns about the science, the objective of ExxonMobil’s efforts is to preserve the company’s short-term profits in a carbon-dominated world economy no matter the dire long-term consequences for the company’s investors or for the consumers who buy its products,” the 211-page complaint states.
Impact of NY and Mass Lawsuits
The NY and Massachusetts lawsuits, taken together, serve as reminders that Trump’s pro-fossil fuel policy is not the only climate change game in town. State AGs wage formidable legal clout. These lawsuits are much more than token harassment of fossil fuel companies such as the instant target Exxon, and instead serve as an alternative form of regulation, as Legal Newline reports, While New York goes to trial, Massachusetts AG finally sues ExxonMobil over climate change statements
The lawsuits by Massachusetts and New York fit with a campaign by environmental groups and the Rockefeller Brothers Fund to use litigation as an alternative form of regulation against oil and gas producers. Former New York AG Eric Schneiderman consulted with activists before launching a highly publicized investigation of ExxonMobil in 2015.
Healey’s office has participated in NYU’s State Impact Center, an organization funded by billionaire Michael Bloomberg that places “fellows” in state AG offices to investigate environmental litigation like the ExxonMobil suits. ExxonMobil has criticized the practice as an unacceptable conflict of interest because the AGs only get the assistance of NYU attorneys if they pursue the litigation NYU supports.
Alas, I think the lawsuits, which by their nature, are retrospective in their outlook, fall far short of the extensive, prospective regulation that’s necessary to confront the climate change crisis. But the Trump administration has no interest in addressing that colossal problem, meaning that these state-level lawsuits loom larger than they should in the regulatory arsenal for confronting climate change.
Yet lest you think they are irrelevant in the face of that calamity, they’ve attracted the ire of climate change denialists, such as the following screed in the Boston Globe, The climate change shakedown (which should really be read in full, to be believed and be aware, this is the Globe, and not the Herald.):
Democratic politicians in Massachusetts and New York are not the only government entities seeking to punish Big Oil for the public problem of climate change. A number of cities and counties have also filed climate claims against energy companies.
The state and local suits are the by-product of a 2012 summit in La Jolla, Calif., where activists cooked up a scheme to regulate energy and generate cash windfalls through litigation. Put simply, the goal of the campaign, hatched in La Jolla, is to “establish in [the] public’s mind that Exxon is a corrupt institution that has pushed humanity (and all creation) toward climate chaos and grave harm.”
Activists openly admit that the point of such climate lawsuits is to make the oil and gas industry “less competitive with wind, solar and other renewable energy sources and thus accelerat[e] the transition to a clean-energy economy.”
Thankfully, some judges still have some respect for the separation of powers. In 2018, a federal court in California threw out a lawsuit by the cities of San Francisco and Oakland that sought monetary damages from oil companies for the effects of climate change. Judge William Alsup acknowledged the scientific consensus that fossil fuels have “materially” accelerated climate change, but he held that the cities could not prove the companies created an unauthorized public nuisance.
“Our industrial revolution and the development of our modern world has literally been fueled by oil and coal,” Alsup wrote, and it is the job of the legislative and executive branches of government — not the courts — to “balance the social utility against the gravity of the anticipated harm” of climate change.
A federal court in Manhattan likewise dismissed nuisance claims by New York City on the grounds that federal regulation of greenhouse gas emissions by the Clean Air Act preempts common-law nuisance claims. In other words, Congress is the appropriate place to set climate policy. Not the courts.
Sadly, these rulings haven’t stopped politicians in Rhode Island from pursuing frivolous public nuisance claims.
Nor have they discouraged the attorneys general of New York and Massachusetts from advancing intellectually dishonest new theories to legally harass and extort the energy companies.
These state cases should also fail. But that won’t stop hypocritical politicians, all of whom use gasoline to get them to their campaign fund-raisers, from continuing their coordinated campaign against the companies that power our world.
Any effort that can attract such hysteria from the denialist side of the climate change spectrum should be applauded.