After four years and three attorneys general, New York finally brought ExxonMobil to court Tuesday on charges of “climate fraud,” a case expected to decide whether the sputtering “Exxon knew” campaign still has something in the tank — or if that vehicle has run out of gas.
Climate activists have long accused Exxon of hiding crucial global-warming research from the public, which Exxon denies, but the case going before New York Supreme Court Justice Barry R. Ostrager is considerably less splashy.
New York Attorney General Letitia James alleges that Exxon defrauded investors in violation of the state’s Martin Act by keeping two sets of numbers to assess the impact of climate regulations, while Exxon insists there was nothing remarkable about the separate cost metrics.
“The New York Attorney General’s case is misleading and deliberately misrepresents a process we use to ensure company investments take into account the impact of current and potential climate-related regulations,” said Exxon spokesman Scott J. Silvestri in a statement.
The trial could see an appearance on the stand by former Exxon CEO Rex Tillerson, who served as President Trump’s first secretary of state. Real money is at stake: The state estimated the damages to shareholders at between $476 million and $1.6 billion.
“We are not telling Exxon how to run its business, it was and always is free to change its business practices. But it has to be honest with investors,” said Kevin Wallace, acting chief of the Investor Protection Bureau, in Tuesday’s opening argument, as reported by the New York Post.
An accounting dispute isn’t quite what was promised when then-Attorney General Eric Schneiderman — with former Vice President Al Gore riding shotgun — announced at a March 2016 press conference that a coalition of liberal attorneys general would pursue fossil-fuel companies and their supporters for downplaying climate-change risks.
Since then, however, only Massachusetts has joined New York in conducting a full-fledged investigation, while most of the 17 attorneys general involved in AGs United for Clean Power have done nothing, or at least nothing publicly.
The New York probe appeared to run aground with the May 2018 resignation of Mr. Schneiderman amid physical-abuse allegations, but his replacement, Barbara Underwood, filed the lawsuit in October under pressure from the court either to drop the probe or take action.
With the case now in court, Democrats, climate-change groups, friendly media outlets, and the Rockefeller Family Fund have jumped in to show support.
House Democrats plan to hold a hearing Wednesday on the oil industry’s “efforts to suppress the truth about climate change.” Protesters from 350.org gathered outside the courtroom Tuesday with a “Make Them Pay” banner, chanting “Exxon knew!”
“We’re not in this climate mess because we heat our homes or drive cars, which is what fossil fuel companies want us to think,” said Rockefeller CEO Lew Wasserman in a New York Times op-ed. “We’re victims of a small group of gargantuan companies that ignored their own science on global warming.”
Critics in the industry describe the case as an “orchestrated campaign” backed by Rockefeller and other leftist foundations to bring down Exxon by weaponizing sympathetic state prosecutors, using the blueprint provided by the tobacco litigation.
“It’s been well established that the New York Attorney General’s investigation and resulting civil lawsuit were politically motivated and resulted from a coordinated effort by anti-fossil fuel groups and contingency-fee lawyers involved in other lawsuits against industry,” Mr. Silvestri said.
Energy in Depth’s Spencer Walrath noted that Mr. Schneiderman emphasized that the case is “not what the company knew about climate change and when it knew it.”
“To the dismay of the many activist groups who been trying to get a court of law to agree with their manufactured #ExxonKnew narrative since the beginning, neither ExxonMobil’s climate research nor its alleged role in hiding climate science from the public will be on trial,” said Mr. Walrath.
Tom Stebbins, executive director of the Lawsuit Reform Alliance of New York, called the case “an abuse of the Martin Act,” New York’s tough anti-financial fraud statute.
“The idea that the attorney general is bringing this on behalf of ExxonMobil investors is laughable,” Mr. Stebbins said. “That is not the intent of this lawsuit at all. The intent of this lawsuit is to make a political statement about climate change.”