MANHATTAN (CN) — Two months after ducking civil liability over its climate crisis policies, Exxon took the fight to the Second Circuit on Tuesday, vying to turn the tables on the state attorneys general who accused it of fraud.
“That trial should never have happened,” Exxon’s attorney Justin Anderson argued, referring to recent high-profile case where the company fended off claims that it had deceived investors about global warming.
Justice Barry Ostrager ultimately cleared Exxon of liability after a 12-day bench trial in Manhattan Supreme Court, but the December ruling was hardly a ringing endorsement of the oil giant’s environmental impact.
“Nothing in this opinion is intended to absolve ExxonMobil from responsibility for contributing to climate change through the emission of greenhouse gases in the production of its fossil fuel products,” the 55-page decision states. “ExxonMobil does not dispute either that its operations produce greenhouse gases or that greenhouse gases contribute to climate change. But ExxonMobil is in the business of producing energy, and this is a securities fraud case, not a climate change case.”
In the appeal now before the Second Circuit, meanwhile, Exxon seeks to revive claims that the attorneys general of New York and Massachusetts discriminated against its views on climate change.
Throughout today’s hearing in Manhattan, attorney Anderson pointed to Massachusetts Attorney General Maura Healey’s subpoenas concerning the company’s statement that poverty presented a greater global challenge than climate. Healey also requested information on Exxon’s rhetorical question: “What good is it to save the planet if humanity suffers?”
“Those are not questions about our product,” Anderson told the three-judge panel. “Those are questions about policy.”
That argument appeared to resonate with two Trump appointees on the panel: U.S. Circuit Judges Richard Sullivan and Joseph Bianco.
“The questions in your request seem to have nothing to do with fraud,” Sullivan told New York’s Assistant Attorney General Anisha Dasgupta, who emphasized that Exxon seeks a court review of claims that the state rejected.
“Exxon fully litigated those claims in state court,” Dasgupta said.
The ruling under appeal treated Exxon’s lawsuit as an example of the adage “the best defense is a good offense.”
“The relief requested by Exxon in this case is extraordinary: Exxon has asked two federal courts — first in Texas, now in New York — to stop state officials from conducting duly-authorized investigations into potential fraud,” U.S. District Judge Valerie Caproni wrote in 2018. “It has done so on the basis of extremely thin allegations and speculative inferences.”
Exxon bases its allegations of political prosecution on a conference held eight years ago in San Diego where activists discussed how to pressure the company on climate change. Some of those activists later shared internal Exxon documents with the attorneys general, who rolled out their lawsuits to great fanfare.
Former Vice President Al Gore helped announce the New York lawsuit at the press conference with then-Attorney General Eric Schneiderman, describing a plan for “progressive action to address climate change.”
“Some statements made at the press conference were perhaps hyperbolic, but nothing that was said can fairly be read to constitute declaration of a political vendetta against Exxon,” Caproni, an Obama appointee, wrote in 48-page ruling at the time.
On appeal, Judge Bianco suggested such a such a finding was premature.
“This is not the type of determination we make a motion to dismiss,” Bianco said.
Massachusetts Assistant Attorney General Richard Johnston told the judges that Exxon’s arguments already failed in state court.
“It had every right at the state court proceeding to quash that request,” Johnston noted.
Exxon has not been shy in its counteroffensive, suing in three states and seeking to disqualify Attorney General Healey from the investigation. The protracted litigation may prove to be a hurdle for Exxon on appeal.
“Why is it not moot?” Judge Sullivan asked Exxon’s attorney at one point, referring to the company’s recent victory in Manhattan Supreme Court.
The third member of the panel, Senior U.S. Circuit Judge Amalya Kearse, is a Carter appointee who remained silent throughout oral arguments. Some four years ago, Kearse shielded a different oil colossus, Chevron, from having to pay a more than $9.5 billion judgment against them in Ecuador, upholding a ruling that found the award fraudulent.
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