Eric T. Schneiderman
Eric T. Schneiderman ()

Attorney General Eric Schneiderman‘s push to compel Exxon­Mobil to produce additional documents as part of its fraud case against the energy company has been clipped, at least for the time being, by Manhattan Supreme Court Justice Barry Ostrager.

On Friday, Ostrager agreed with Paul, Weiss, Rifkind, Wharton & Garrison partner Theodore Wells Jr. that the attorney general’s May 8 subpoena for, among other items, a new production of material “seems unreasonable on its face,” according to the transcript of the June 16 hearing.

“I am of the view, which may be one that the AG disagrees with, that the deposition process in this case and interrogatory process in this case is a much more productive, efficient and cost-effective means of securing information that the Attorney General is legitimately entitled to pursue in its investigation,” Ostrager said in response to concerns raised by ExxonMobil’s counsel.

According to John Oleske, senior enforcement counsel in the attorney general’s office, the new, multipronged subpoena was necessary due to ExxonMobil’s “contemptible history of compliance” in an initial subpoena that generated close to 3 million documents for state prosecutors. In particular, a review of documents held by ExxonMobil’s accountants at Pricewaterhouse­Coopers allegedly showed a separate internal process used by the company to calculate the cost of greenhouse gasses on its business.

“We learned that Exxon, contrary to its representations to the public, never applied the proxy costs when it came to this apparent analysis,” Oleske told the court. “We learned it through the PricewaterhouseCoopers documents, but we still don’t have Exxon documents.”

Ostrager appeared determined, however, to keep the attorney general’s office from launching a new documents search. Instead, he affirmed that ExxonMobil should continue to be responsive with the request in the first subpoena as the investigation continues.

“You don’t need to propound any additional document requests because they know what their obligations are and they are going to comply with their obligations,” the judge told Oleske.

However, Ostrager also ruled that the government would be limited to documents through the end of 2016. “You can’t keep moving the goal posts,” the judge said.

While he directed the parties to try to work together on the production of documents issues—refusing to either quash or approve Schneiderman’s new subpoena—the attorney general’s office was granted the ability to interview nine witnesses.

Four of them are ExxonMobil employees who the attorney general’s office considers fact witnesses, including Bill Colton, the author of the company’s Energy Outlook publication. Another fact witness, Jason Iwanika, is a senior accounts executive of the Canadian-based ExxonMobil subsidiary Imperial Oil Limited. The attorney general’s office will also interview four ExxonMobil employees involved in producing material for the previous subpoena about allegedly missing documents.

The interviews are scheduled to begin next week, according to the parties.

Ostrager also ordered the two sides to work through “reasonable interrogatories” requested by the attorney general’s office, stating that he would handle them one-by-one in an all-day session if the parties couldn’t agree.

The case is People v. PricewaterhouseCoopers, 451962/2016.