(Bloomberg) — Exxon Mobil Corp.’s attempt to derail a multistate fraud investigation into the company’s public comments about climate change flamed out in a New York court.
U.S. District Judge Valerie Caproni in Manhattan on Thursday dismissed Exxon’s lawsuit claiming officials in New York and Massachusetts conspired with environmental groups in planning the securities-fraud probe and made up their minds about its outcome before it started.
In its tactic of suing in federal courts in New York and Texas to stop the state probes, Exxon was “running roughshod over the adage that the best defense is a good offense,” Caproni said in her ruling.
The win provides headway for New York Attorney General Eric Schneiderman and his counterpart in Massachusetts, Maura Healey, to finish their investigations, which have been delayed by legal wrangling. They’ll ultimately decide whether there’s enough evidence of wrongdoing by Exxon to sue the energy giant and seek damages.
Exxon spokesman Scott Silvestri said the company is reviewing the judge’s decision and evaluating next steps.
“We believe the risk of climate change is real and we want to be part of the solution,” Silvestri said. “We’ve invested about $8 billion on energy efficiency and low-emission technologies such as carbon capture and next generation biofuels.”
The attorneys general argued that Exxon was improperly attempting to use the federal court system to impinge their state investigatory powers.
The states have been investigating since 2015 whether Exxon misled the public and investors about the reality of climate change, including the ways it could impact the company’s finances. They’re also examining whether Exxon properly valued its reserves based on what its scientists projected.
Exxon claimed the evidence of political motivation includes meetings the attorneys general had with environmental groups and Schneiderman’s claim at the press conference that former President Barack Obama’s environmental agenda was being opposed by “morally vacant” forces.
The judge said the company offered “extremely thin allegations and speculative inferences.”
“The factual allegations against the AGs boil down to statements made at a single press conference and a collection of meetings with climate-change activists,” she wrote. “Some statements made at the press conference were perhaps hyperbolic, but nothing that was said can fairly be read to constitute declaration of a political vendetta against Exxon.”
Healey said in a statement that Thursday’s ruling is a turning point in an investigation that’s been hindered by Exxon’s refusal to cooperate.
“Massachusetts customers and investors deserve answers from Exxon about what it has known about the impact of burning fossil fuels on its business and the planet, and whether it hid this information from the public,” Healey said.
Schneiderman was also pleased with the ruling.
“As the court noted, Exxon’s claims in this lawsuit were ‘implausible’ and unsupported, while its strategy amounted to a type of ‘legal jiu-jitsu’ that resulted in nothing more than a ‘huge waste’ of time and money,” he said in a statement.
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