What Does the ‘Most Feared Plaintiffs’ Firm Stand To Gain By Probing Exxon?

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Michael Bastasch DCNF Managing Editor
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U.S. Virgin Islands Attorney General Claude Walker has outsourced the legal work in his investigation into Exxon’s stance on global warming to a law firm specializing in high-dollar-value class action suits.

That D.C.-based firm, Cohen Milstein Sellers & Toll PLLC, has a reputation of getting huge financial rewards from its class action suits, and the firm recently helped Walker get an $800 million settlement with the owner of an oil refinery who was being sued under the same anti-racketeering law Exxon is being investigated under.

Walker made headlines when he issued a subpoena for 20 years of records from ExxonMobil and a libertarian think tank, after he joined a broader investigation started by New York Attorney General Eric Schneiderman into the oil giant’s disclosure of global warming risks to investors.

But Exxon has fired back. The company recently filed suit against Walker in Texas, seeking to get the subpoena quashed, specifically targeting Walker’s hiring of Cohen Milstein attorney Linda Singer. Exxon believes Walker is violating their constitutional rights by hiring Singer and her firm since they are already steeped in another lawsuit against the company.

“This flagrant misuse of law enforcement power is further illustrated by Attorney General Walker’s outsourcing of the Virgin Islands’ ‘investigation’ to Defendants Cohen Milstein and Singer, likely on a contingency-fee basis,” Exxon’s legal team wrote in a lawsuit recently filed in a Texas court, alleging Walker’s subpoena violates their constitutional rights

Cohen Milstein’s handling of the refinery case on a contingency-fee basis reportedly netted her firm $15 million. It’s one of many lucrative financial rewards they’ve won working with attorneys general suing big companies.

Singer, the former attorney general for the District of Columbia, is an expert on getting business from cash-strapped attorneys general in exchange for a share of the financial rewards. A major legal publication ranked Cohen Milstein as one of the “most feared plaintiffs firm” in 2013. As of 2015, Cohen Milstein was still on that list for their $500 million settlement with JP Morgan Chase in what has been called the largest mortgage-backed securities class action settlement ever.

The New York Times detailed in a 2014 article how Singer goes about getting AGs to sue — or threaten to sue — all sorts of industries, from pharmaceuticals to big banks, for huge sums of money. Her firm pays the upfront legal costs in exchange for a share of the rewards — usually between 15 to 25 percent of a settlement.

For example, Singer won a massive settlement with Bank of america in 2009, netting Nevada an extra $38 million. As part of their contingency-fee, her firm got an extra $5.6 million, according to the Times.

Singer has struck up a similar arrangement with Walker. She recently handled a case for the Virgin Islands AG against Hess Oil over the closure of a refinery in the Virgin Islands. That settlement and the resulting sale of the refinery netted the Virgin Islands government $800 million.

Singer’s handling of the case on what’s called a contingency-fee basis netted her firm $15 million, according to Exxon’s legal filing. The Virgin Islands government got some $220 million (which they’ve already spent) as part of the deal, with the rest to be paid out through 2040.

Exxon attorneys believe she is handling their case for Walker on a contingency-fee basis. Walker, however, has defended his office’s use of outside law firms.

“My office has a statutory responsibility—and duty—to protect the residents of the Virgin Islands, and bringing in a private law firm to assist in our investigation of this well-resourced corporation is both necessary and entirely proper,” Walker told the New York Law Journal.

Walker recently served the Competitive Enterprise Institute, a D.C.-based free market think tank, with a subpoena, in an apparent effort to tie the think tank into allegations Exxon was trying to cover up global warming science while funding skeptics. Walker also subpoenaed Exxon.

Walker joins three other attorneys general from California, Massachusetts and New York who are investigating Exxon based on reporting by InsideClimate News and Columbia University. Those reports purport to show Exxon knew oil production would make global warming worse, but continued to conduct business and fund groups skeptical of global warming regulations.

For months, Democrats and environmentalists have been calling for the federal Department of Justice to launch a Racketeer Influenced and Corrupt Organizations Act, or RICO, investigation into groups skeptical of catastrophic global warming.

“Financial damages alone may be insufficient,” Schneiderman said during the event in New York City in March. “The First Amendment does not give you the right to commit fraud.”

Now, Walker is using Cohen Milstein’s resources — likely on a contingency-fee basis, according to Exxon — to go after America’s largest oil company over allegations it deceived the public about global warming science.

Exxon is not going to allow Walker to subpoena them without a fight. The company has also raised concerns about Cohen Milstein’s involvement in another case against them in their lawsuit against Walker.

Cohen Milstein, Singer’s firm, has been engaged litigation with Exxon for the last 15 years over alleged human rights abuses committed by Indonesian soldiers during the country’s civil war. Singer’s involvement with Walker could put more pressure on Exxon to settle in Indonesia.

“Cohen Milstein has pursued bitterly contested and contentious litigation in an unrelated lawsuit against ExxonMobil now pending in federal court in the District of Columbia, which could result in a substantial fee award if Cohen Milstein’s client were to prevail,” Exxon noted in its legal filing.

Cohen Milstein claims Exxon “aided and abetted” human rights abuses while the company operated a natural gas facility in the country during the civil war. Exxon has denied the allegations.

“That litigation record and Cohen Milstein’s receipt of a $15 million contingency-fee payment from Attorney General Walker in another unrelated case raise substantial doubts about whether that firm should be permitted to serve as the ‘disinterested prosecutor’ whose impartiality is demanded by law and expected by the public,” the company argued.

Exxon has no employees or physical assets in the U.S. Virgin Islands, so it’s unclear on what grounds they could have specifically violated the territory’s anti-racketeering law. Exxon’s legal team is also concerned the use of a law firm specializing in class action lawsuits “deprives ExxonMobil of due process of law and fundamental fairness.”

Neither Walker’s office nor Singer responded to The Daily Caller News Foundation’s request for comment.

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