Search Results for ‘exxon new york’

Exxon beats the New York rap

“If a state like New York can bend and twist legal concepts like that of securities fraud to carry on an essentially political vendetta against a corporate enemy, how safe are other businesses?” My new Cato post reports on a judge’s scathing rejection of a case that should never have been brought, the New York Attorney General’s attempt to hang fraud charges on Exxon over its statements on climate change.

The downfall of #ExxonKnew

It was a hashtag prosecution, a social media campaign posing as a legal case: #ExxonKnew. And like yesterday’s media balloon become today’s litter, its deflated remains floated back down to earth last week in a New York courtroom.

National Review asked me to write a longer piece on last week’s Exxon acquittal (earlier, and previously):

In a 2003 case called Nike v. Kasky, no less a liberal authority than Supreme Court Justice Stephen Breyer warned that it was dangerous to freedom of speech to arm ideological adversaries with legal power to bring fraud charges against businesses based on those businesses’ public statements about contentious issues….

In his full, scathing opinion, Judge Ostrager rejected each of the state’s themes. “ExxonMobil’s public disclosures were not misleading.”…

New York’s prosecution of Exxon — a legal vendetta against a target chosen for essentially political reasons — deserves to be studied in law schools for years to come. But not for the reasons its authors once hoped.

Whole thing here.

John Baker on the AGs’ Exxon campaign

“Warning to Corporate Counsel: If State AGs Can Do This to ExxonMobil, How Safe Is Your Company?” Prof. John Baker in the Georgetown Journal of Law and Public Policy, excerpt:

Nation-states have long fought wars for control of oil. In a novel development, American states are now fighting a war over control of oil—not with one state attempting to take oil from another, but with some states attempting to deny its use to other states. In 2015, New York’s Attorney General, Eric Schneiderman, began an investigation of ExxonMobil. Then, at a news conference held in New York City on March 29, 2016, Schneiderman said that he and a group of other attorneys general were looking at “creative legal theories” to bring about “the beginning of the end of our addiction to fossil fuel.” The group is comprised of seventeen attorneys general, representing fifteen states, the District of Columbia, and one territory. Opposing these attorneys general from mostly “blue states” are attorneys general from twenty-seven mostly “red states.”

We’ve covered one angle of the investigation — its attempt to attach legal consequences to wrongful climate advocacy, and use subpoena power to investigate advocates — at length. Baker writes about many others, including the murky origins of the multi-state investigation and related professional responsibility questions, Exxon’s subdued public response, and the prospect of an ideological “War Between the States.”

“ExxonMobil has a right to its opinion”

The editorial board of USA Today sees New York attorney general Eric Schneiderman’s probe as an “exercise in politics” and says it raises “serious First Amendment concerns” [USA Today] Concur, more or less: Washington Post editorial board (“Exxon deserves criticism, but it didn’t commit a crime…. Legitimate scientific inquiry depends on allowing strong, even unfair, criticism of the claims that scientists make.”) Related: Adam Freedman, City Journal (“bid to criminalize skepticism.”)

Another step toward climate speechcrime: New York subpoenas

Months of agitation promoting a government investigation of supposedly wrongful advocacy on the issue of climate change have begun to pay off. As Holman Jenkins [paywall] notes, purportedly levelheaded Democrats and environmentalists are now jumping on the bandwagon for a probe of possible unlawful speech or non-speech by energy companies and advocacy groups they’ve backed. Perhaps the most remarkable name on that list is Hillary Clinton, who said the other day in New Hampshire, referring to Exxon, “There’s a lot of evidence that they misled people.” That’s right: Hillary Clinton, of all people, now wants to make it unlawful for those who engage in public controversy to mislead people.

The first high-profile law enforcer to bite, it seems, will be Eric Schneiderman, whose doings I’ve examined at length lately. “The New York attorney general has launched an investigation into Exxon Mobil to determine whether the country’s largest oil and gas company lied to investors about how global warming could hurt its balance sheets and also hid the risks posed by climate change from the public,” reports U.S. News. Show me the denier, as someone almost said, and I will find you the crime: “The Martin Act is a nearly empty vessel into which the AG can pour virtually any content that he wants,” as Reuters points out. More on the Martin Act here and here.

At Forbes, Daniel Fisher notes the possible origins of the legal action in an environmentalist-litigator confab in 2012 (“Climate Accountability Initiative”) in which participants speculated that getting access to the internal files of energy companies and advocacy groups could be a way to blow up the climate controversy politically. Fisher also notes that Justice Stephen Breyer, in the Nike v. Kasky case dismissed 12 years ago on other grounds, warned that it will tend to chill advocacy both truthful and otherwise by businesses if opponents can seize on disagreements on contentious public issues and run to court with complaints of consumer (or presumably securities) fraud.

Perhaps in this case chilling advocacy is the whole point. And very much related: my colleague Roger Pilon’s post last week, “Whatever Happened to the Left’s Love of Free Speech?“; Robert Samuelson (“The advocates of a probe into Exxon Mobil are essentially proposing that the company be punished for expressing its opinions.”)

January 15 roundup

Climate change roundup

  • I was part of an informative panel discussion of “Climate Change Litigation and Public Nuisance Lawsuits” organized by the Rule of Law Defense Fund [watch here] Podcast and transcript of an October update on state and municipal climate litigation with Boyden Gray [Federalist Society] And because it’s still relevant, my 2007 WSJ piece (paywalled) on how contingency fees for representing public-sector plaintiffs are an ethical travesty;
  • New York securities case against ExxonMobil goes to trial [Daniel Fisher, Legal Newsline; earlier] At last minute, NY Attorney General Letitia James, successor to Eric Schneiderman, drops the two counts requiring proof of intent, which the state had earlier deployed to accuse Exxon of deliberate misrepresentation. Still in play is the state’s unique Martin Act, which allows finding fraud without proof of intent [Nicholas Kusnetz, Inside Climate News]
  • Ninth Circuit panel hears “children’s” climate case, Juliana v. U.S. [Federalist Society podcast with James May, Damien Schiff, and Jonathan Adler; related commentary, James Coleman]
  • Bernie Sanders doesn’t really need legal arguments for retroactive criminal prosecutions if he’s got Jacobin on his side, right?
  • “Lawyers are unleashing a flurry of lawsuits to step up the fight against climate change” [Darlene Ricker, ABA Journal]
  • Who’s backing Extinction Rebellion, the lawbreaking group that blocked intersections in Washington, D.C. and elsewhere this fall? “The answer, in part, is the scions of some of America’s most famous families, including the Kennedys and the Gettys.” [John Schwartz, New York Times]

Banking and finance roundup

  • Gov. Jerry Brown signs into law California bill imposing minimum quota for women on corporate boards: “it’s very hard to see how this law could be upheld” [Emily Gold Waldman, PrawfsBlawg, earlier, more: Alison Somin, Federalist Society] “The passage of this law resulted in a significant decline in shareholder value for firms headquartered in California.” [Hwang et al. via Bainbridge]
  • Martin Act, part umpteen: “New York Attorney General Overreaches in Climate-Change Complaint Against Exxon” [Merritt B. Fox, Columbia Blue Sky Blog]
  • “Now he tells us! You’d think that maybe Bharara would have publicly acknowledged this ambiguity and haziness [in insider trading law] before bringing a series of cases that destroyed careers and imposed huge costs on the individuals who were accused.” [Ira Stoll]
  • “Because [Florida agriculture commissioner-elect Nikki Fried] took donations from the medical marijuana industry, Wells Fargo and BB&T banks closed her campaign accounts briefly, citing policies against serving businesses related to marijuana, which is still prohibited under federal law.” [Lori Rozsa, Washington Post, Erin Dunne, Washington Examiner (“fix the marijuana banking mess”)]
  • Survey: “Average cost of a settled merger-objection claim has increased 63% to $4.5 million over four years, with little benefit to shareholders” [Chubb] “Time for Another Round of Securities Class Action Litigation Reform?” [Kevin LaCroix, D&O Diary on U.S. Chamber paper, and more on trends in Australia]
  • “Congress Can’t Create an Independent and Unaccountable New Branch of Government” [Ilya Shapiro on Cato cert amicus in State National Bank of Big Spring v. Mnuchin, on constitutionality of Consumer Financial Protection Bureau (CFPB)]

Environment roundup

Boulder joins suits demanding climate damages from energy companies

The litigation campaign had previously recruited several California cities and New York City, and now three local governments in Colorado, the City of Boulder, Boulder County, and San Miguel County, are joining in demanding recoupment of moneys spent because of climate change. I’m quoted in Michael Sandoval’s account in Western Wire:

Walter Olson, a Senior Fellow at the Cato Institute, told Western Wire that besides pushing for settlement, an additional objective is implementing new regulation via the courts, rather than legislation or administrative rulemaking….

The multi-state, multi-pronged approach is key, Olson said, given the differences between states on everything from recovery to discovery procedures.

“The strategy in these cases is typically to recruit as many plaintiffs as possible, with an emphasis on actions in different states. States have, e.g., different consumer laws to sue under that may allow different theories of recovery, or different procedures each of which may place the defendants at some particular kind of disadvantage,” Olson said….

“Typically the government plaintiffs are offered a deal of ‘no fee unless successful,’ just as in the ads on late-night TV,” Olson said….

Olson said that the approach in Colorado may be slightly different, given the reaction to the lawsuits filed in California and New York City that have been viewed simply as money-grabs.

“The first wave of these climate suits have gotten a reputation in the press as organized by law firms seeking contingency fees who intend to run the actions for maximum cash payout,” Olson said. “Involving EarthRights and a community like Boulder could be an effort to change this image by introducing more of an idealistic non-profit tone and maybe a suggestion that the goal isn’t just to squeeze money out in a settlement and then return to business as usual, which is basically what happened with the tobacco settlement,” he concluded.

I also mention that speculative litigation of this sort is made vastly easier by our lack of a loser-pays rule.

A very different view — and one with which, needless to say, I disagree — from the Niskanen Center, which is participating in the suits.