Exxon Mobil Corp. filed a notice of appeal to the U.S. Court of Appeals for the Second Circuit Friday, challenging the dismissal last month of its suit against the attorneys general of New York and Massachusetts over allegations their action over whether the energy giant committed fraud by withholding its research on climate change was solely motivated by politics.
U.S. District Judge Valerie Caproni dismissed the suit on March 29, stating from the outset that Exxon was “[r]unning roughshod over the adage that the best defense is a good offense” in its suit against the attorneys general.
As Caproni noted, the suit’s basis was that the investigations amounted to retaliation against Exxon over the company’s views on climate change, and, therefore, violations of the company’s constitutional rights.
The suit was originally brought in Texas and then transferred to New York in March 2017. Exxon’s suit was an attempt to “stop state officials from conducting duly-authorized investigations into potential fraud,” Caproni said.
“It has done so on the basis of extremely thin allegations and speculative inferences,” Caproni continued, adding later in her opinion, “Exxon’s allegations that the AGs are pursuing bad faith investigations in order to violate Exxon’s constitutional rights are implausible and therefore must be dismissed for failure to state a claim.”
Beginning in 2015, New York Attorney General Eric Schneiderman’s office opened up an investigation into Exxon’s public statements about climate change. Brought under the state’s powerful Martin Act blue sky law, the investigation is probing whether the energy company lied about its own findings publicly and to investors, committing consumer and securities fraud. Massachusetts Attorney General Maura Healey announced her own investigation under that state’s blue sky laws in April 2016.
While the respective suits have played out in state courts, Exxon attempted to have a federal judge put an end to the investigations. Initially assigned to U.S. District Judge Ed Kinkeade of the Northern District of Texas, Exxon’s suit claimed the attorneys general were conducting “improper and politically motivated investigations … in a coordinated effort to silence and intimidate one side of the public policy debate on how to address climate change.”
Kinkeade, who had allowed the suit to substantially proceed, transferred the case on his own motion in large part because much of the alleged activity—namely a March 2016 press conference and a subsequent closed-door meeting between the attorneys general and climate activists that Exxon claims revealed the attorneys general’s true motivations—took place in the Southern District of New York.
Caproni proved far less accepting of Exxon’s claims that it was targeted in an effort to improve the political standing of Schneiderman and Healey.
In a statement, Schneiderman spokeswoman Amy Spitalnick said the Attorney General’s Office expects the appeal to be dismissed.
“Last month, a federal judge made clear that Exxon’s lawsuit was nothing more than ‘legal jiu jitsu’ that resulted in a ‘huge waste’ of time and money,” she said.
Paul, Weiss, Rifkind, Wharton & Garrison partners Theodore Wells Jr. and Daniel Toal are leading the appeal on Exxon’s behalf. Neither could be reached for comment. A spokeswoman did not provide a comment.