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A New Front Has Opened Up in the Legal Battle Over Climate Change

ExxonMobil is facing increasing pressure as members of the US Congress, Democratic Party presidential contenders, and New York's attorney general support investigations of whether may it have committed fraud.

by Rob Verger
Nov 12 2015, 9:05pm

Image via Flickr

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Last week, news broke that New York attorney general Eric Schneiderman had launched a climate-change focused investigation into the ExxonMobil Corporation.

He appeared on PBS Newshour on Monday and explained that his office had issued what he described as "a broad subpoena" against the oil giant.

Schneiderman explained that Exxon once had a strong climate research program, but then "changed tactics for some reason" and began a campaign of climate change skepticism.

"We're interested in what [science] they were using internally, and what they were telling the world," Schneiderman said.

News of the investigation comes on the heels of two reports on Exxon's scientific activities, revealing that while the company conducted early research on the effects of climate change, it fostered doubt about the link between human activities — primarily the burning of fossil fuels — and rising global temperatures. One internal 1988 memo published by The Los Angeles Times showed that it was company policy to "emphasis the uncertainty" about climate change.

In July, the Guardian reported that Exxon mobile scientists knew as early as 1981 about climate change and the risks it posed to the company.

Michael Gerrard, who directs the Sabin Center for Climate Change Law at Columbia University, said it was premature to say whether or not the attorney general has a strong case, since Schneiderman is only investigating at this point.

"It's fair to call this the opening of a new front in the legal battles against climate change," Gerrard said.

Related: Former ExxonMobil Scientist Says the Company Has Long Known of Its Climate Change Impacts

He stressed that there are two questions to consider when exploring whether or not Exxon acted illegally.

"One question is whether they misled investors, concerning the effect of climate change and the possibility that climate regulation would have on the value of the company," he said. "A second question is whether they misled their consumers about the impacts of the product they were buying."

Exxon could respond to the subpoena with a motion to quash, Gerrard said. But, if they do release documents, it would be the first time a court compels a fossil fuel company to turn over evidence in a case about climate change.

"Many people are curious what will come out," Gerrard said.

The Exxon investigations fall with the domain of investor and securities law, as opposed to environmental law, said Sean Hecht, a co-executive director of the Emmett Institute on Climate Change and Environment at UCLA Law School.

The Martin Act, for example, requires companies to provide information to investors that is "factually correct," Hecht said.

"There is certainly an argument to be made, based on the information that's publicly available now, that Exxon may have had and used information internally, specifically about the business risks that it faced due to climate change," Hecht said.

"There's certainly the possibility that a judge or a jury could become persuaded," Hecht added, "or a regulator could become persuaded, that Exxon did not provide the information that it ought to have provided in order to inform shareholders of those risks."

Ceres, founded after the 1989 Exxon Valdez accident, is a nonprofit organization that encourages companies to become more environmentally and socially responsible. Andrew Logan, who directs the group's work in the oil and gas sector, said Ceres has been urged Exxon to be more transparent about climate-change risks.

"This is a moment that investors had been warning Exxon about for decades," Logan said."We've been telling the company since the '80s that it needs to disclose more, be more transparent about its stance on climate change and the risks, and just tell us what [it's] doing to manage those risks, and instead what we got was obfuscation and denial."

Exxon, which he described as "obstinate and frustrating to deal with," could have taken a different tack, Logan said.

"Early on, what really would have been helpful would have been for Exxon to come out, and just have come clean on the facts — on the fact that climate change is a risk, that it presents a complicated set of risks for [the] company, and to sort of explain what they were doing to manage those risks," he said.

"It would have been great as well if they didn't use their influence to actively try to slow down progress on climate policy," he added. That's because, financially speaking, gradual work towards fighting climate change is easier than dramatic change.

Related: Hillary Clinton Says There's a Lot of Evidence ExxonMobil Misled the Public on Climate Change

Brandon Garrett, a law professor at the University of Virginia Law School, pointed out that the contents of the attorney general's subpoena to Exxon aren't publicly known. He said that it is "risky" to comment on cases when they are this new.

"There are many investigations that run into dead ends because the company simply committed no misconduct," Garrett said. "Other times, investigations last years, and they uncover more damaging fraud than the public had any idea existed. There's really no way to predict from the outside what a company was doing or knew."

Meanwhile, Democratic members of the US Congress are urging the Department of Justice to launch a fraud investigation into what Exxon knew about climate change. And Democratic Party presidential candidates Hillary Clinton, Martin O'Malley, and Bernie Sanders have all called for an investigation.

Kenneth Cohen, vice president of public and government affairs for ExxonMobil, appeared on the PBS program after Attorney General Schneiderman. Host Judy Woodruff asked, "Has Exxon in any way misled or been dishonest with the public about what it knows about climate change?"

"The answer is a simple no," Cohen said. 

Follow Rob Verger on Twitter: @robverger

Image via Flickr

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