"The First Amendment does not protect false and misleading statements in the marketplace," the office of Massachusetts Attorney General Maura Healey (pictured here) said in response to Exxon's June 15 lawsuit. Credit: MANDEL NGAN/AFP/Getty Images
The company asks a federal court in Texas to block the investigation by Massachusetts prosecutors, citing its constitutional rights...
ExxonMobil has sued to derail a second attorney general's investigation of the oil giant's climate record.
The company filed a complaint in federal district court in Fort Worth on Wednesday against Massachusetts Attorney General Maura Healey. Her office subpoenaed Exxon records going back 40 years in an investigation of whether the company committed consumer or securities fraud by misrepresenting its knowledge of climate change.
In the same court, Exxon has a similar suit pending against Claude Walker, the attorney general of the U.S. Virgin Islands, who has launched a similar probe. Healey and Walker are part of a coalition of Democratic attorneys general trying to hold fossil fuel companies legally accountable for their conduct on climate change. The group was organized by New York State Attorney General Eric Schneiderman, whose office initiated an Exxon inquiry last year.
In its lawsuit, Exxon said the Massachusetts investigation under consumer and securities fraud statutes is "nothing more than a weak pretext for an unlawful exercise of government power to further political objectives." The attorney general is "abusing the power of government to silence a speaker she disfavors," according to the lawsuit.
Exxon asked the court to either issue an injunction halting the investigation or rule that the investigation is without legal merit.
Exxon strikes the same themes in the suit against Healey as it does in its action against Walker: The investigation is a violation of the company's constitutional rights, including the First and Fourth amendments that protect free speech and prohibit unreasonable searches.
"The CID (civil investigative demand) is an impermissible viewpoint-based restriction on speech, and it burdens ExxonMobil's political speech," according to the lawsuit. "Attorney General Healey issued the CID based on her disagreement with ExxonMobil regarding how the United States should respond to climate change.
"And even if the CID had not been issued for that illegal purpose, it would still violate the First Amendment, because it burdens ExxonMobil's political speech, and its demands are not substantially related to any compelling governmental interest," Exxon argued in the filing.
In addition, Exxon said the investigation violates Massachusetts' four-year statute of limitations. Exxon argued there is nothing to investigate because the company hasn't sold fuel, owned a retail location or sold securities in Massachusetts in the past four years.
"For many months, Exxon Mobil has engaged in an unprecedented effort to limit the ability of state attorneys general to investigate fraud and unfair business practices," said Cyndi Roy Gonzalez, Healey's communications director.
"Our investigation is based not on speculation but on inconsistencies about climate change in Exxon documents which have been made public," Gonzalez said. "The First Amendment does not protect false and misleading statements in the marketplace. Exxon's assertion that we cannot investigate it because the company has not engaged in business here in Massachusetts is completely preposterous."
In the Healey suit, Exxon also continued to criticize the alliance of attorneys general, saying the prosecutors were caving in to "thoroughly political goals" of climate activists.
The Healey complaint closely mirrors Exxon's court battle against a subpoena issued in March by the Virgin Islands' Walker. The demand covers a broad swath of records as part of an investigation into whether the oil company conspired to cover up its understanding of climate change in violation of the territory's anti-racketeering law.
Virgin Islands authorities are conducting their probe under the territory's "Baby RICO" statute. After Congress passed the Racketeer Influenced and Corrupt Organizations Act, known as RICO, in 1970, the Virgin Islands was one of more than two dozen states and territories that adopted similar legislation. The laws were intended to give officials stronger weapons for prosecuting organized crime.
Exxon contends that subpoena is invalid because it seeks records beyond the baby RICO law's five-year statute of limitations, violates the company's constitutional rights and "constitutes an abuse of process."
Walker recently revoked a related subpoena to the Competitive Enterprise Institute, a libertarian think tank in Washington that received Exxon funding while leading efforts to sow doubt about climate change. In a letter to CEI's lawyers, the law firm representing Walker said the subpoena will be reissued if Walker decides to pressure CEI to surrender documents. The subpoena of a third-party supporting industry had been criticized by CEI and its allies, and some legal experts, as a violation of its First Amendment rights.
"This subpoena was a constitutional outrage from the very beginning, violating our right to free speech and our donors' right to confidentiality," CEI's general counsel, Sam Kazman, said in a statment. It "was an abuse of process, plain and simple, and we're determined to see that Walker faces sanctions for his illegal actions that he refuses to recognize," he said.
Exxon has not balked at a subpoena from New York Attorney General Schneiderman issued last year seeking documents on what Exxon knew about climate change and what it told shareholders and the public.
Matt Mittenthal, a spokesman for Schneiderman, said Exxon is continuing to cooperate with New York's investigation, which delves back four decades into the company's climate history. The company has turned over thousands of pages of documents in response to the subpoena, he said.
"It is deeply troubling that Exxon has taken the extraordinary step of refusing to comply with a lawful subpoena sent in the course of a serious fraud investigation," Mittenthal said in response to the suit against Healey. "The law is clear: The First Amendment does not give any corporation the right to commit fraud."
By filing its lawsuits in Fort Worth, Texas-based Exxon may be seeking a home-court advantage, according to Thomas McGarity, a University of Texas at Austin law professor. "You would expect to see more business-favorable judges on the bench in Texas than you might in Massachusetts. That's a legal realism."
Also on Wednesday, the attorney general of Texas and of 12 other states, wrote a letter to the coalition of the 17 attorneys general working on climate change issues, urging them to drop any climate fraud investigations of fossil companies.
"Investigatory subpoenas were issued to at least one company and one non-profit believed to have made statements minimizing the risks of climate change," they wrote.
"We think this effort by our colleagues to police the global warming debate through the power of the subpoena is a grave mistake."
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