Theodore Wells, of Paul, Weiss, Rifkind, Wharton & Garrison. Courtesy photoTillerson Expected to Testify as Trial Begins in NY AG's Lawsuit Against Exxon
The attorney general's office has argued that the cost models were inconsistently and confusingly applied, which led investors to pay more than they should have paid for Exxon securities.
October 22, 2019 at 05:24 PM
2 minute read
The original version of this story was published on New York Law Journal
Former Exxon Mobil CEO, chairman and onetime U.S. Secretary of State Rex Tillerson is expected to testify during a three-week trial in Manhattan Supreme Court, Exxon lawyer Theodore Wells said during his opening statement Tuesday afternoon.
Tillerson will be a "live witness," said Wells, a partner at Paul, Weiss, Rifkind, Wharton & Garrison.
Former New York Attorney General Barbara Underwood sued Exxon in October 2018, saying the company deceived its investors about the effects of climate change on its business and value.
The former CEO's statements were highlighted by the New York attorney general's office during opening arguments.
Wells defended Exxon's practices during opening arguments and accused the attorney general's office of pursuing a political fight on behalf of climate activists.
Wells showed Manhattan Supreme Court Justice Barry Ostrager an agenda from a 2015 meeting at the Rockefeller Family Fund, where he said climate activists mapped out how to fight Exxon. A line on the agenda suggested that they discussed how to get attorney generals involved, Wells said. Exxon's lawyers have said that then-New York Attorney General Eric Schneiderman was successfully targeted by the activists.
Exxon had two different kinds of cost assumptions related to climate change, Wells said. One dealt with direct costs such as emissions taxes and the other was related to a projected decline in demand for oil and gas as global regulations increased, according to Wells. Employees were told to apply cost assumptions "where appropriate," Wells said.
The attorney general's office has argued that the cost models were inconsistently and confusingly applied, which led investors to pay more than they should have paid for Exxon securities.
Wells dismissed the idea that Exxon would not want the most accurate models for its own business.
"Why the heck would you want to lowball yourself?" he said in court. "You would be cheating yourself … you want to use the most accurate cost assumptions."
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