New York ruling is a warning to Healey

A NEW YORK JUDGE last week soundly rejected a lawsuit by that state’s Attorney General that cuts the legs out from climate lawsuits by Massachusetts, Rhode Island, and other governments. The New York lawsuit, which sought up to $1.6 billion from ExxonMobil, was widely hailed as “the trial of the century” by those advocating legal action against energy manufacturers over climate change.   

Global climate change is one of the defining political issues of our time, and for good reason. There are urgent, widespread efforts to figure out how to mitigate the impacts of modern society on our planet. This includes sourcing and using traditional energy more efficiently, finding ways to capture or suppress the release of greenhouse gases, and developing sustainable renewable energy. 

Several years ago, some climate activists decided that the best way to try to steer this debate to their desired policies was to vilify energy manufacturers. Their goal, an internal email showed, was to get their friends in government to “delegitimize” the companies, their workers, and supporters as political actors. They met with then-New York Attorney General Eric Schneiderman, Massachusetts Attorney General Maura Healey, and several mayors around the country. 

What followed was a series of investigations and lawsuits seeking to reinforce this vilification—regardless of whether the allegations were true. Healey launched an investigation, saying ExxonMobil misled consumers about climate change.  Rhode Island filed a lawsuit against a bunch of oil and gas manufacturers, saying they should pay for climate-related local infrastructure projects for illegally “conceal[ing] the dangers” of climate change.  

 The problem for all of these lawsuits, though, is that their industry-blaming narrative is proving in the courts to be wrong. All of the dominoes are falling against them.  First, the US Securities and Exchange Commission, which launched an investigation into ExxonMobil’s public disclosures on climate risks, dropped all of its charges. 

 Next, the judge, in issuing last week’s New York ruling, called the allegations of deceit, fraud, and other misrepresentations “hyperbolic.” The New York case fell apart entirely.  Even before trial, the judge weeded out the most incendiary claims, limiting the case to accounting practices over the impact of potential climate-change regulations on the valuation of their assets and what it told investors about those valuations.  

By the end of the trial, the New York attorney general’s office withdrew all of its fraud claims.  It was clear to everyone who watched the trial that there was no intent to mislead or defraud. The judge confirmed this fact, stating “ExxonMobil would not have been held liable on any fraud-related claims.” 

 All that was left was a claim under New York’s Martin Act that people could have been confused by the company’s climate disclosures. The judge rejected these allegations, too, noting that the company turned over millions of documents and the court found no material concerns. 

Blaming energy manufacturers for climate change, though, is popular among the climate activists’ political base, so they keep repeating this narrative. Healey, while the New York lawsuit was mid-trial, filed her own lawsuit based on the same valuation-related allegations that have now been proven wrong. Rather than acknowledge this fact, she doubled down, saying she is going to continue the lawsuit over the alleged “misrepresentations.”  

 The lawyers in the public nuisance lawsuits are doing the same. Vic Sher, a trial lawyer for Baltimore, pushed this narrative in a hearing before the US Court of Appeals last week in a case that mirrors the Rhode Island lawsuit. He said these lawsuits are about deceptions and asked that the case be heard in state, not federal, courts in hopes of getting a friendlier judge. Two federal judges have already dismissed similar lawsuits, saying climate change is an issue for Congress and the Environmental Protection Agency, not the courts. 

 It is time for both federal and state courts to shut down this narrative once and for all. Myths do not become fact through repetition, particularly in a court of law. Law enforcement officers and governments, including Massachusetts, Rhode Island, and Baltimore, should not pursue litigation when the facts prove them wrong. Our courts are places to seek redress for actual wrongs, not make political statements. 

Philip S. Goldberg is special counsel to the Manufacturers’ Accountability Project, an effort of the National Association of Manufacturers, and office managing partner at Shook Hardy & Bacon, L.L.P. in Washington, DC.