- 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)]
- So many private actors, from Michael Bloomberg on down, helped steer New York AG office to sue Exxon [John Solomon, The Hill; Tom Stebbins, Crain’s New York Business; Francis Menton, RealClearEnergy; earlier here, here, here, here, etc. ] “Whatever the merits of the plaintiffs’ policy objectives, their campaign to circumvent the political branches poses a serious threat to the rule of law and the constitutional principle of separation of powers.” [Jim Huffman, Quillette] “Emails Show Law Firm Pitched San Francisco on Idea of Suing Energy Producers” [Todd Shepherd, Free Beacon]
- Supreme Court heard oral argument last month on the dusky gopher frog habitat case, Weyerhaeuser v. U.S. Fish & Wildlife Service [Faimon Roberts, The Advocate; Rick Hills, PrawfsBlawg; earlier here and here]
- High court has ordered reargument on cemetery-trespass takings case Knick v. Township of Scott, Pennsylvania [Gideon Kanner; earlier here, here, here, and here; Ilya Somin and more and yet more on what’s at stake]
- Reduction or no, damage award against Monsanto in Roundup/glyphosate case is likely headed to appeal [Helen Christophi, Courthouse News and more, earlier]
- Behind push for European regulatory crackdown on cadmium levels in fertilizer, “a Russian fertilizer giant that has ties to the Kremlin” [Matt Apuzzo, New York Times]
- “No, LaCroix Isn’t Poisoning You Like You’re A Giant Cockroach” [Christie Aschwanden, Five Thirty-Eight, earlier] There’s Drano in your eye drops, and it’s okay to relax about that [Josh Bloom, ACSH]
- Biggest recruit yet for climate recoupment suits: NYC Mayor Bill De Blasio sues blaming five oil companies for Superstorm Sandy [Seth Barron/City Journal, John Timmer/ArsTechnica, WSJ; Stephen Bainbridge on parallel divestment effort]
- California cities/counties suing oil companies: climate change will be our ruin. Same cities/counties selling bonds to investors: risk? what risk? [Andrew Scurria/WSJ; John O’Brien/Forbes] Santa Cruz joins several other Bay Area counties in action [Nicholas Ibarra, Santa Cruz Sentinel]
- Can’t spell “Oedipal” without “O-i-l”: Rockefeller heirs bankroll #ExxonKnew crusade against great-granddad’s company [Reeves Wiedeman, New York mag]
- Same article takes disbelieving tone about possibility that state AGs’ campaign might trample anyone’s First Amendment rights [memory refresher] More about that in this Margaret (Peggy) Little and Andrew Grossman 2016 Federalist Society podcast and my Twitter thread about it;
- National Association of Manufacturers launches legal initiative to push back against industrywide and attorney-general tort, nuisance, and public-recoupment suits, notably on climate and lead paint [John Siciliano, Washington Examiner; Linda Kelly, The Hill; NAM’s Manufacturing Accountability Project and its coverage of the art of “climate attribution,” the early failed Kivalina suit (more on which), origins of Global Warming Legal Action Project]
- Pssst, Vice — in profiling Steve Berman you might want to be aware that a few other attorneys claim some minor role in also having “won a $200 billion settlement from tobacco companies in the 90s” [compare claims of lawyers organizing opioid suits]
“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.”
- “Rockefeller Foundations Enlist Journalism in ‘Moral’ Crusade Against ExxonMobil” [Ken Silverstein] Massachusetts was using courts to investigate heretics back before the oil industry was even whale oil [Reuters on subpoena ruling] Washington Post shouldn’t have run Sen. Sheldon Whitehouse (D-R.I.) on climate politics without noting his brutal efforts to subpoena/silence opponents on that topic;
- “Should you go to jail if you can’t recognize every endangered species?” [Jonathan Wood]
- Sandy Ikeda reviews Robert H. Nelson, Private Neighborhoods and the Transformation of Local Government [Market Urbanism]
- D.C. Circuit shouldn’t let EPA get away again with ignoring cost of power plant regs [Andrew Grossman on Cato amicus brief]
- Under what circumstances should libertarians be willing to live with eminent domain in the construction of energy pipelines? [Ilya Somin and earlier] Economic benefits of fracking are $3.5 trillion, according to new study [Erik Gilje, Robert Ready, and Nikolai Roussanov, NBER via Tyler Cowen]
- “Dramatically simpler than the old code…[drops] mandates for large amounts of parking.” Buffalo rethinks zoning [Aaron Renn, City Journal] Arnold Kling on California’s housing shortage; John Cochrane on an encouraging Jason Furman op-ed; “Zoning: America’s Local Version Of Crony Capitalism” [Scott Beyer]
Promoters of the “Exxon Knew” climate denial subpoena campaign have made a point of saying they intend to repeat the playbook of the 1990s multi-state and federal tobacco litigation, this time with the energy industry and its various trade associations, allies, and non-profit/university well-wishers as targets. But what does it mean to repeat the tobacco playbook? As one who has written at length about that episode (along with various other authors including Cato’s Robert Levy, the late Martha Derthick, and Margaret Little) I can help spell out what that means. The public-sector tobacco litigation fell out of favor as a policy model because it was the scene of vast corruption fueled by the availability of billions in fees to politically favored private lawyers; because of its grotesque violations of elemental legal fairness, such as the enactment of statutes retroactively knocking out legal defenses for the state’s opponents; because of its quick-change remake of purported initial idealism into cash on the barrelhead as the primary driver of settlement; and because of its grave civil liberties violations such as the federal government’s assertion of a right to close down industry trade associations and seize their files. Are advocates of the new climate-denial litigation hoping for it to follow the same path? [Valerie Richardson, Washington Times, thanks for quoting me]
At the Federalist Society blog, Margaret (Peggy) Little, practicing attorney and director of The Federalist Society’s Pro Bono Center, has published a summary and analysis (parts one, two) of the ongoing criminal investigation of Exxon and its relations with dozens of advocacy groups, university scholars, trade associations and others with whom it is said to have collaborated in the supposedly improper cause of climate “denial.”
As one of the shrewdest analysts of the outrageous tobacco litigation saga, Little is particularly well situated to spot the parallels:
…Nearly every speaker [at the “AGs United for Clean Power” press conference] expressly cited the state AGs’ successful victory over the tobacco industry as a template for this action. One AG called upon other countries, states, communities and individuals to join in this effort. Why the public announcement before the facts come in? Why the global call to arms by this minority of state AGs?
An alert observer will recognize that this press conference follows right on the heels of drastic fiscal crises in many states. The state AGs’ wildly successful settlement with the tobacco industry in the 1990s –which incidentally also deployed foreign countries, dissenting states, cities, towns and health insurers to amass industry-busting claims– shifted a quarter of a trillion dollars to the states and their attorneys, leading to fiscal and governmental bloat that, to borrow a term from the climate activists, is unsustainable. New targets need to be identified and demonized so that this state regulatory confiscation from private industry can continue.
Another echo is the role of private law firms angling for what could be stupendously large contingency fees, a phenomenon that was the driving force of the state tobacco litigation. Little notes the role of prominent class action and tort firm Cohen Milstein, which “has a state AG practice headed by partner Linda Singer, former AG of the District of Columbia. The New York Times has profiled [its] solicitation of state AGs to bring class action and mass tort suits.” Another private attorney involved in the new affair, Matt Pawa, is likewise deep in contingency-fee representations of state attorneys general to pursue ostensibly governmental claims in which public officials would ordinarily be expected not to take a personal financial interest. If the AGs’ press conference was characterized by “hot,” accusatory, prejudicial rhetoric more often associated with plaintiff’s lawyers than with professional prosecutors, this might be why, Little notes.
She also makes clear the deep political illegitimacy and unaccountability of the regulation-through-litigation Fourth Branch these suits are intended to set up:
These extortionate suits are cynically Made to Settle. Professor G. Robert Blakey, a RICO consultant engaged by the Department of Justice to plan the federal tobacco lawsuit, frankly admitted, “this case is not made to win, it’s made to settle.” Both the state and its contingency fee outside financiers are thus in a position to reap enormous rewards with no risk of judicial precedents that would stem the tide of other, like initiatives against other industries. A state is a subsidized political plaintiff, driven by interest groups and ideology and its officers’ political ambitions; it can afford to bring a weak case and pursue it more vigorously than could any private plaintiff. Further, the arsenal of remedies at its disposal—consent decrees, injunctive relief, enforcement powers available under its consumer protection, trade practices and antitrust statutes—are simply not available to a private tort plaintiff. All of which underscores why these contingency arrangements violate the targets’ due process rights.
I wrote a whole book in 2003 — The Rule of Lawyers — on the pretensions of this emerging Fourth Branch of litigators and why they were not consistent with American self-government. For a while — as one after another attempt at a “next tobacco,” from guns to soft drinks, failed to take off — it looked as if maybe our system had learned the lesson and that the scandals would not repeat. If only that were so!
- “…the open, naked promise to use prosecutorial powers as a political weapon is a prima facie abuse of office. In a self-respecting society, every one of those state attorneys general would have been impeached the next day.” [National Review editorial]
- Lefty foundations funded investigative report that kicked off the prosecute-climate-deniers push, and even funded the group that then gave an award to that ostensibly independent report [Jon Henke, earlier on Columbia School of Journalism role here and here; Jillian Kay Melchior on Inside Climate News]
- Grand public announcement by attorneys general and former Vice President Al Gore made no mention of huddles with Rockefeller philanthropies that led up to it [Reuters; summaries of conversations via pro-CEI public records request]
- Major angle not yet widely publicized is that ALEC, hugely demonized on Left, likely to be in cross hairs: “In his remarks, Maryland Attorney General Brian Frosh made a point of adding … [the] American Legislative Exchange Council as potential targets.” [Climate Investigations]
- What’s private class action law firm Cohen Milstein doing in the middle of all this? Three guesses [National Review editorial; note “place of production” commanded in subpoena text]
- “Climate Investigations” website seeks to promote idea of giving private lawyers what could prove wildly lucrative contingent-fee role in crusade against climate deniers; note that such private lawyers not only drove tobacco Medicaid recoupment litigation from the start, but (a tale told in Chapter 1 of my book The Rule of Lawyers) helped shape the epic corruption of that tobacco caper;
- Reactions by the targets: a statement from incoming CEI president Kent Lassman vows to fight; “Exxon Fires Back at Climate-Change Probe” [WSJ; AP/U.S. News via Virgin Islands Free Press on move to quash subpoena]
- “Federal law makes it a felony ‘for two or more persons to agree together to injure, threaten, or intimidate a person in any state, territory or district in the free exercise or enjoyment of any right or privilege secured to him/her by the Constitution or the laws of the Unites States, (or because of his/her having exercised the same).'” It doesn’t exempt state attorneys general [Glenn Reynolds, USA Today]
As we noted on Friday, New York Attorney General Eric Schneiderman, more recently joined by several other state attorneys general, has pursued an investigation of the ExxonMobil corporation and its links to “climate denial” that has now resulted in a subpoena (from the attorney general of the U. S. Virgin Islands, Claude E. Walker) demanding ten years’ worth of internal documents from the Competitive Enterprise Institute. CEI, which issued a statement last week (with the text of the subpoena) vowing to resist the legal attack, has a further statement and links here; CEI’s Myron Ebell also recorded a Cato podcast (“fishing expedition… threatens our future… designed to shut us up”) with interviewer Caleb Brown.
Megan McArdle, Bloomberg View, calls the new developments “an attempt to criminalize advocacy”:
State attorneys general including Walker held a press conference last week to talk about the investigation of ExxonMobil and explain their theory of the case. And yet, there sort of wasn’t a theory of the case. They spent a lot of time talking about global warming, and how bad it was, and how much they disliked fossil fuel companies. They threw the word “fraud” around a lot. But the more they talked about it, the more it became clear that what they meant by “fraud” was “advocating for policies that the attorneys general disagreed with.”
New York Attorney General Eric Schneiderman gave the game away when he explained that they would be pursuing completely different theories in different jurisdictions — some under pension laws, some consumer protection, some securities fraud. It is traditional, when a crime has actually been committed, to first establish that a crime has occurred, and then identify a perpetrator. When prosecutors start running that process backwards, it’s a pretty good sign that you’re looking at prosecutorial power run amok….
The rule of law, and our norms about free speech, represent a sort of truce between both sides. We all agree to let other people talk, because we don’t want to live in a world where we ourselves are not free to speak. Because we do not want to be silenced by an ambitious prosecutor, we should all be vigilant when ambitious prosecutors try to silence anyone else.
This investigation is intended to silence and chill any opposition. It is disgraceful and contemptible behavior by public officials who are willing to exploit their power to achieve ideological ends….
Given the coalition that has been formed by state attorneys general to conduct a grand inquisition against climate change deniers, this subpoena from the Virgin Islands attorney general is probably just the first assault in their quasi-religious war against unbelievers. Researchers, scientists, think tanks, universities, and anyone else who works or speaks in this area should be aware that they may soon become a target of these malicious investigations.
As the Washington state supreme court noted in Rickert v. State Pub. Disclosure Commission (2007), our forefathers “did not trust any government to separate the true from the false for us” in the realm of politics.
A sobering aspect of the state AGs’ crusade is what is taking place outside of courtrooms: they are pressuring companies to cut off donations to nonprofit groups that employ “climate-change deniers.” … New York’s and California’s attorneys general have investigated Exxon for making donations to think tanks like the American Enterprise Institute and lobbying groups like the American Legislative Exchange Council. Schneiderman complains that these two specifically are “even more aggressive climate change deniers” than the run of the mill. (Ironically, while these large organizations include a few people labeled as “climate change deniers,” they focus mostly on issues having nothing to do with climate change.)
…even if being a “climate change denier” were a crime (rather than constitutionally protected speech, as it in fact is), a donation to a nonprofit that employs such a person would not be a crime.
In February we noted Bader’s strong argument that a “prolonged investigation in response to someone’s speech can violate the First Amendment” in itself even when “eventually dropped without imposing any fine or disciplinary action.”
I’m also quoted in a piece in Vermont Watchdog by Michael Bielawski and Bruce Parker that came out just before the subpoena report, on some of the issues in the investigation.
The campaign to attach legal consequences to supposed “climate denial” has now crossed a fateful line:
The Competitive Enterprise Institute (CEI) today denounced a subpoena from Attorney General Claude E. Walker of the U.S. Virgin Islands that attempts to unearth a decade of the organization’s materials and work on climate change policy. This is the latest effort in an intimidation campaign to criminalize speech and research on the climate debate, led by New York Attorney General Eric Schneiderman and former Vice President Al Gore….
The subpoena requests a decade’s worth of communications, emails, statements, drafts, and other documents regarding CEI’s work on climate change and energy policy, including private donor information. It demands that CEI produce these materials from 20 years ago, from 1997-2007, by April 30, 2016.
CEI General Counsel Sam Kazman said the group “will vigorously fight to quash this subpoena. It is an affront to our First Amendment rights of free speech and association.” More coverage of the subpoena at the Washington Times and Daily Caller.
A few observations:
- If the forces behind this show-us-your-papers subpoena succeed in punishing (or simply inflicting prolonged legal harassment on) groups conducting supposedly wrongful advocacy, there’s every reason to think they will come after other advocacy groups later. Like yours.
- This article in the Observer details the current push to expand the probe of climate advocacy, which first enlisted New York AG Eric Schneiderman and then California’s Kamala Harris, into a broader coalition of AGs, with Massachusetts and the Virgin Islands just having signed on. More than a dozen others, such as Maryland Attorney General Brian Frosh, seem to be signaling support but have not formally jumped in. More: Peggy Little, Federalist Society.
- CEI people, many of them longtime friends of this site, have been active critics of the Schneiderman effort, with Hans Bader, a senior attorney there, highly critical just a week ago.
- In these working groups of attorneys general, legal efforts are commonly parceled out among the states in a deliberate and strategic way, with particular tasks being assigned to AGs who have comparative advantage in some respect (such as an unusually favorable state law to work with, or superior staff expertise or media access). Why would one of the most politically sensitive tasks of all — opening up a legal attack against CEI, a long-established nonprofit well known in Washington and in libertarian and conservative ideological circles — be assigned to the AG from a tiny and remote jurisdiction? Is it that a subpoena coming from the Virgin Islands is logistically inconvenient to fight in some way, or that local counsel capable of standing up to this AG are scarce on the ground there, or that a politician in the Caribbean is less exposed to political backlash from CEI’s friends and fans than one in a major media center? Or what?
- I recommend checking out the new Free Speech and Science Project, which intends to fight back against criminalization of advocacy by, among other things, organizing legal defense and seeking to hold officials accountable for misusing the law to attack advocacy.
- This is happening at a time of multiple, vigorous, sustained legal attacks on what had been accepted freedoms of advocacy and association. As I note in a new piece at Cato, Sen. Elizabeth Warren has just demanded that the Securities and Exchange Commission investigate several large corporations that have criticized her pet plan to impose fiduciary legal duties on retirement advisors, supposedly on the ground that it is a securities law violation for them to be conveying to investors a less alarmed view of the regulations’ effect than they do in making their case to the Labor Department. This is not particularly compelling as securities law, but it’s great as a way to chill speech by publicly held businesses.