MANHATTAN (CN) — ExxonMobil must crack open its accountant's files to comply with New York Attorney General Eric Schneiderman's investigation into whether the oil giant's denials of climate change amounted to fraud, a New York state judge ruled Wednesday.
On Nov. 4, 2015, the New York attorney general's office revealed its probe into the issue to great fanfare after the Los Angeles Times and InsideClimate News started publishing a groundbreaking series of articles reporting that ExxonMobil scientists privately confirmed the effects of a warming planet as early as the 1970s.
The series reported that the Texas-based oil giant launched a misinformation campaign decades later, enlisting think tanks, junk scientists and lobbyists to stave off government action and mislead the public and shareholders.
Since receiving the attorney general's subpoena, Exxon has produced at least one million documents, but the company has opposed production of files held by its accountants at PricewaterhouseCoopers under Texas laws protecting accountant-client privilege.
The auditing company, which trades under the acronym PwC, is based in London.
"The answer to this question turns, in the first instance, on whether New York law applies to an investigative subpoena issued by the NYAG [New York Attorney General] with respect to a New York investigation involving companies that do business in New York," the five-page order states.
Manhattan Court Justice Barry Ostrager found that New York law — and not the statutes from Exxon's home state — applied.
"New York does not recognize an accountant-client privilege, and controlling authority holds that: 'The law of the place where the evidence in question will be introduced at trial or the location of the discovery proceeding is applied when deciding privilege issues,'" the judge wrote.
Attorney General Eric Schneiderman celebrated the court's order and vowed to move "full-steam ahead with our fraud investigation of Exxon."
"Exxon had no legal basis to interfere with PwC's production, and I hope that today's order serves as a wakeup call to Exxon that the best thing they can do is cooperate with, rather than resist, our investigation," he said in a statement.
The ruling indicates that the requested files could shine a light on the company's "representations about the impact of climate change on its business, including on its assets, reserves, and operations."
In an Aug. 19 interview, Schneiderman told the New York Times that his investigation could uncover a "massive securities fraud" if he proves that ExxonMobil knew that climate change would force the company to leave vast reserves of oil in the ground.
"If, collectively, the fossil fuel companies are overstating their assets by trillions of dollars, that's a big deal," he told the paper.
A spokeswoman for PricewaterhouseCoopers declined to comment.
In a statement, ExxonMobil's spokesman Alan Jeffers said, "We respectfully disagree with the court's ruling and intend to take an immediate appeal."
Facing attorney general probes in both New York and Massachusetts, ExxonMobil has fought the investigations tooth and nail.
Earlier this year, ExxonMobil accused Massachusetts Attorney General Maura Healey of bias in an attempt to persuade a federal judge in its home state to quash her subpoena.
The company's Republican allies in Congress have subpoenaed both attorneys general and numerous civil-society groups, including the Union of Concerned Scientists, Greenpeace, Rockefeller Family Fund, Climate Accountability Institute, 350.org, and others.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.