- New York’s climate lawsuit targeting ExxonMobil for allegedly duping investors is coming to a close and the oil company’s attorney’s closing remarks lambasted the state’s pursuit.
- New York AG Letitia James’s office dropped two of its four fraud claims against Exxon as company executives and engineers itch to prove they did not dupe investors about the risk posed by climate change.
- The state is basing the rest of its case on an obscure law that does not require proof that Exxon intended to dupe investors.
ExxonMobil’s attorney spared no expense in his closing arguments Thursday explaining why he believes New York’s attorney general’s climate lawsuit targeting the company is tantamount to a political hit job.
New York AG Letitia James’s lawsuit is a “cruel joke,” attorney Ted Wells said as the trial wrapped up. Wells also chastised New York for what he says is falsely accusing the company’s scientists of conducting a massive ploy to dupe investors about the consequences of climate change.
“Just because there is a serious problem relating to climate change, and we acknowledge that that problem is real and must be addressed, it does not give a regulator the right to bring a meritless case that hurts people’s reputations,” he said of James’ lawsuit, which was a long time in coming. The state has spent nearly three years investigating the company’s climate record.
James dropped two of the AG office’s four fraud claims, instead basing the remainder of the lawsuit on an arcane New York law that allows the state’s top law officer to go after virtually any offense. She is now using the Martin Act, a state law that does not require proof of intent, to take on Exxon.
Exxon’s alleged deception “exposed the company to greater risk from climate change regulation than investors were led to believe,” according to the lawsuit, which was filed in October 2018. Massachusetts filed a similar lawsuit in October alleging Exxon duped investors and the public about how climate change regulations might affect their investments.
The New York lawsuit focuses on Exxon’s use of an internal “proxy” price for global warming regulations, which was lower than prices put forward in reports to investors and the public. Exxon said it’s been internally pricing carbon dioxide emissions since 2007.
Former CEO Rex Tillerson was one of the executives who testified during the trial. He retired in 2017 and became President Donald Trump’s first secretary of state.
Wells also reminded the New York Supreme Court Justice that the state’s investigation shifted multiple times throughout the last three years. (RELATED: New York’s Anti-Trump AG Is Preparing To Grill Rex Tillerson About Exxon’s Supposed Climate Sins)
“I have lived with this case, I’ve watched the three-year investigation where they changed from theory to theory to theory,” Wells noted before comparing the state’s pursuit of Exxon to the fictional whale in 19th century novelist Herman Melville’s Moby Dick.
Wells also hit the attorney general for not allowing Exxon’s engineers and executives to clear their names.
“I mean it was like, you know, somebody in Moby Dick going after the great white whale. They were trying to get ExxonMobil. We started with climate science. We went to another theory. Went to stranded assets. We ended up with this theory,” he noted before saying that Exxon did something it rarely does: submit to a trial and ask investigators and prosecutors to put up or shut up.
Wells conclude his remarks with a quip suggesting the trial was a type of comedy. “We were entertained by the New York AG’s two expert witnesses. I say entertained, because Dr. Bartov was entertaining,” he said, referring to Eli Bartov, an accounting professor at New York University and one of the state’s witnesses. “Somewhat like a skit on Saturday Night Live or something the way he conducted himself. But the two expert witnesses produced by the State.”
New York’s initial investigation stems from research conducted by Inside Climate News, an environmental news outlet that reported in 2015 that the company downplays whatever role it contributes to man-made global warming. Federal regulators have also sniffed around Exxon but determined the company was not engaging in any unlawful acts.
The Securities and Exchange Commission (SEC), for instance, investigated the company in 2018 for overvaluing assets in the face of future climate regulations. The SEC eventually dropped the probe in August and noted in a letter that it would not recommend enforcement actions. The message included a disclaimer stating the probe could be reopened at a later dated.
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