Healey’s kitchen-sink Exxon-Mobil lawsuit
Amended complaint brings COVID-19 into play
MASSACHUSETTS ATTORNEY GENERAL Maura Healy’s complaint against ExxonMobil rests on the exotic claim that the company’s advertising and public financial reporting purposefully misled shareholders and customers about the effects of global warming.
Initially filed in October, Healey’s office submitted an amended version in early June that went a step further, arguing the COVID-19 crisis validates the ExxonMobil lawsuit by illustrating the high stakes involved for both the company and society.
“These calamitous consequences of the coronavirus pandemic are a harbinger of the types of systemic risks posed by climate change, demonstrating the sweeping and interconnected nature of climate-driven dangers and disruptions, such as the widespread economic harms of sudden global market disruptions, supply chain interruptions, and health care system failures,” says Healey’s lawsuit.
The decision to inject the global pandemic into a fundamentally weak piece of litigation is nothing short of disturbing – and ultimately, pointless.
For years, the ExxonMobil case has been viewed in many circles as nothing more than an exercise in left-wing political pandering. Like Inspector Javert in Les Misérables, the Attorney General’s office seems prepared use any argument to support its flimsy lawsuit, however absurd. Alas, the addition of the COVID-19 pandemic into Massachusetts’ climate change lawsuit is merely offensive without providing any useful legal arguments.
The conflation of the coronavirus and climate crisis, both misleading and far-fetched, leads to an inescapable conclusion: Healey’s climate change litigation is based solely on belief. From a legal perspective, Healey cannot escape the central weakness of her complaint. In her view, fossil fuel producers lied to investors about the inevitable demise of their companies to take advantage of shareholders. This represents a preposterous premise that assumes that ExxonMobil shareholders and other fossil fuel investors remain blithely unaware that any changes created by market conditions, government regulation, technology, or business practices might diminish the value of stock holdings.
To agree with Healey is to accept the conclusion that oil and gasoline producers are prepared to abandon fossil fuel production and reserves in the near future, all while pocketing any remaining profits and leaving shareholders on the hook for billions of dollars in lost market value.
The application of logic tells a different story. There is no version of the future that can be predicted with accuracy. There is no scenario in which legitimate investors expect guaranteed earnings. Indeed, fossil fuel producers have and continue to make substantial billion-dollar investments in the renewable energy sector, which indicates a markedly different future than the version Healy has conjured.
Unfortunately for Healey, facts matter in a court of law. For example, the significant body of existing evidence points to a 20- to 30-year transition period that’s needed to develop renewable energy resources and technology at the scale and volume needed to supplant power that’s presently created by use of fossil fuels. Currently, the Organization of the Petroleum Exporting Countries, OPEC, maintains worldwide demand for crude oil will increase for the next 20 years. Healey’s complaint does not consider this evidence.
All told, the stark picture portrayed within Healey’s lawsuit cannot be supported by reality or law. There simply is absolutely no compelling proof that ExxonMobil faces any immediate or even long-term prospects of declining sales as a result of climate change.
The outcome of a similar ExxonMobil climate case in New York in November provides a harbinger of what lies ahead for Healey. Manhattan Supreme Court Justice Barry Ostrager labeled that state’s claims against ExxonMobil “hyperbolic” and dismissed them outright. The New York attorney general’s case relied on the very same arguments Healey uses. (Note: New York did not appeal the verdict.)
The recent advent of fracking provides an example where a technological advance led to unexpected and dramatic increased production of natural gas and lower pricing. A COVID-19 report published by the Center for American Progress observed the booming renewable energy industry “is suffering from the same uncertainty and impending job losses as many other sectors.” The International Energy Agency – much quoted in the AG’s complaint – recently acknowledged the pandemic has had a “major impact” on energy investments around the world, curbing industry growth and threatening development of key clean energy projects.
Healey’s decision to tie alleged climate change malfeasance to the coronavirus pandemic signals desperation. It certainly raises questions about her motivations in continuing to expend precious taxpayer resources to prosecute the ExxonMobil lawsuit,At a minimum, the decision to cry COVID does not bode well for its ongoing prosecution of ExxonMobil. There’s still time, of course, for Maura Healey to close the books on a pointless lawsuit that seeks to hold a single corporation responsible for a global crisis. Massachusetts taxpayers deserve that much.
David G. Tuerck is president of the Massachusetts-based Beacon Hill Institute.