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Massachusetts High Court Rejects ExxonMobil Bid to Quash Climate Change Probe

The Massachusetts Supreme Judicial Court (SJC) on Friday ruled that Attorney General (AG) Maura Healey has jurisdiction to seek records involved in an investigation of whether ExxonMobil Corp.’s marketing of fossil fuel products violates the state’s consumer protection law.

The high court’s 32-page ruling rejected a bid from ExxonMobil to block Healey from obtaining the records.

In reaction, ExxonMobil spokesman Scott Silvestri told NGI, “We are evaluating the court’s ruling and considering our next steps.”

Healey in part has been working with New York AG Eric Schneiderman, who in late 2015 launched an investigation of ExxonMobil’s internal research and shareholder communications on fossil fuels. Healey and more than a dozen other state AGs joined the probe in 2016.

Internal ExxonMobil documents were released by various media outlets in 2015 that purported to show the company hid internal scientific information for decades and established its knowledge of climate risks.

Following a review of the documents, Healey began pursuing another legal route from Schneiderman’s case, arguing that ExxonMobil’s marketing/sale of fossil fuel products in Massachusetts may have violated the state's primary consumer protection law. The AG issued a civil investigative demand (CID), i.e. a state administrative subpoena, in 2016 seeking the relevant documents.

Appeals went back and forth as ExxonMobil sought to set aside or modify the CID. It argued in part that, as a nonresident corporation, it is not subject to personal jurisdiction in Massachusetts. It also argued that Healey is biased against the company and should be disqualified, that the CID violates statutory and constitutional rights, and the case should be stayed pending a federal court ruling.

The motion was denied. When ExxonMobil appealed, the SJC transferred the case to its court [SJC-12376].

There are more than 300 Exxon- and Mobil-branded retail motor fuel outlets in Massachusetts, and the CID arose from that fuel network, the SJC said. Company affiliates also control advertising through its state franchise network, the court noted.

“We conclude that there is personal jurisdiction over Exxon with respect to the attorney general's investigation, and that the judge did not abuse her discretion in denying Exxon's requests to set aside the CID, disqualify the attorney general, and issue a stay. We affirm the judge's order in its entirety.”

ExxonMobil last month also lost in U.S. District Court for the Southern District of New York regarding its case to end the Schneiderman-led probe. Judge Valerie Caproni in a 48-page ruling, said ExxonMobil was “running roughshod over the adage that the best defense is a good offense.” She ruled that a federal lawsuit may not be used to fight state investigations that question whether climate change statements made by the corporation amount to fraud (No. 17-CV-2301).

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