The state of New York sued American oil giant Exxon Mobile for withholding the “true costs” of climate change from investors. In fact, the charges used to be much broader when the suit was filed by the New York attorney general 4 years ago. At that time, Attorney General Eric Schneiderman claimed that Exxon knew about the impact of climate change but failed to inform shareholders.
But even the reduced charges didn’t fly with the judge. New York Supreme Court Justice Barry Ostrager not only ruled that Exxon did not mislead investors, but that the AG office lied about producing investors as witnesses who had actually been harmed by the company’s “lies.”
“The Office of the Attorney General failed to prove, by a preponderance of the evidence, that ExxonMobil made any material misstatements or omissions about its practices and procedures that misled any reasonable investor,” Ostrager wrote in his ruling.
“The office of the Attorney General produced no testimony from any investor who claimed to have been misled by any disclosure, even though the Office of the Attorney General had previously represented it would call such individuals as trial witnesses,” he added. (Emphasis added)
Not proving that any investor had been materially harmed by Exxon’s actions was critical. It basically meant that the state had absolutely no grounds to bring the suit in the first place.
The $1.6 billion suit brought by New York Attorney General Letitia James alleged that Exxon deceived investors about the true cost of climate change. The trial, which began in October and was the first climate fraud suit to go to trial, was the result of a four-year investigation.
“Today’s ruling affirms the position ExxonMobil has held throughout the New York Attorney General’s baseless investigation,” Exxon spokesperson Casey Norton said in a statement. “We provided our investors with accurate information on the risks of climate change. The court agreed that the Attorney General failed to make a case, even with the extremely low threshold of the Martin Act in its favor,” he added.
The AG was aided by anti-fossil fuel groups and contingency-fee lawyers who helped trump up the charges against Exxon.
When he took the stand on Oct. 30, former Exxon CEO Rex Tillerson said that the company tried to understand the impact of climate change, and tried to accurately communicate this impact to shareholders. Exxon said the case was misleading and politically motivated, and the result of a coordinated effort by anti-fossil fuel groups.
“Lawsuits that waste millions of dollars of taxpayer money do nothing to advance meaningful actions that reduce the risks of climate change. ExxonMobil will continue to invest in researching breakthrough technologies to reduce emissions while meeting society’s growing demand for energy,” Norton added.
The legal fight to force fossil fuel companies out of business is just starting. There are dozens of similar lawsuits brought by other states and cities as well as liability suits brought by class action lawyers. This is lawfare writ large and it remains to be seen how successful any of them will be.