Exxon calls Massachusetts fraud suit punishment for opinion

Exxon Mobil Corp. told a judge that a fraud lawsuit filed by Massachusetts last year amounts to illegal punishment for the energy giant’s views about fossil fuels, the latest twist in their bitter clash over climate change.

The suit by Massachusetts Attorney General Maura Healey should be dismissed because it violates a state law prohibiting litigation that has the effect of punishing a defendant for statements on public policy matters, Exxon said in a July motion made public Wednesday in state court in Boston.

Exxon’s filing revisited allegations it has made repeatedly against Healey and other state officials who’ve investigated the company’s public statements on climate change and its potential impact on the business as well as government efforts to go green.

“Those, like Exxon Mobil, who decline to parrot the attorney general’s call for an immediate transition to renewable energy are not simply diverse viewpoints in a public debate with state, federal, and global policy implications, but targets who must be silenced through ‘lawfare,’” the Irving, Texas-based oil and gas producer said.

Healey’s office rejected the oil company’s claim.

“These baseless motions are nothing more than another attempt by Exxon to evade responsibility for its illegal ongoing campaign to deceive Massachusetts consumers about the impacts of its products on the environment and our investors about the massive risk climate change poses to its business and the global market,” the attorney general said in a statement. “Exxon is not above the law and we’re going to continue our fight to stop its illegal actions.”

The suit, filed in October 2019, alleges Exxon hid its early knowledge of climate change and misled investors in Massachusetts about the projected financial impact of global warming on its business. It also accuses Exxon of misleading consumers by suggesting in marketing materials that some of its gasoline and motor oil products were good for the environment.

Healey, in a court filing responding to Exxon’s motion, said the company was improperly invoking a law that was “intended to shield people of modest means from meritless suits by large private interests that seek to punish those people for exercising their right to petition the government.”

“But Exxon Mobil is not a person of modest means and the Commonwealth is not a large private interest,” Healey said in an Oct. 30 response that was also made public Wednesday. The motion to dismiss “is the most recent in a series of baseless procedural maneuvers -- repeatedly rejected by state and federal courts -- designed to forestall first the attorney general’s investigation of Exxon Mobil and now litigation of the Commonwealth’s claims.”

According to the complaint, Exxon went so far as to disregard the findings of one of its own scientists, who decades ago correctly predicted the amount of carbon dioxide in the atmosphere in 2019 and said that climate change would become “catastrophic.”

Exxon has long argued that such actions illegally target free speech by punishing the company for views about the future of fossil fuels that differ from those of environmentalists. The company has previously said the probe was politically motivated and accused Healey of conspiring with other Democrats and wealthy environmentalists. Healey has rejected such claims.

Healey, who’s been investigating Exxon since 2016, previously overcame Exxon’s attempt to have the case moved to a federal court.

An earlier securities-fraud suit by New York, filed in 2018, accused Exxon of lying to shareholders about its use of a “proxy cost” for carbon in its internal accounting to prepare for future climate-change regulations, allegedly to trick the public into thinking Exxon was being more prudent about climate risks than it really was.

But a judge tossed that case in a crucial win for Exxon, even as states and municipalities across the country have been filing more lawsuits against the company and its peers over the costs of climate change.

The case is Commonwealth of Massachusetts v. Exxon Mobil Corp., 1984-CV-03333-BLS1, Commonwealth of Massachusetts Superior Court, Suffolk County (Boston).

© 2020 Bloomberg L.P.

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