Exxon Mobil seeks to derail climate-change lawsuits by going after local governments
WASHINGTON – Exxon Mobil Corp. and other fossil-fuel giants are taking legal action against local governments, seeking to undermine a key part of their finances – their relationship with lenders.
Exxon Mobil’s targets are several California cities and counties that have filed state lawsuits, claiming that the oil and coal industries worked for decades to cover up their roles in climate change and the consequences. The local governments want the industries to pay for damage and adaptation costs resulting from climate change, including sea-level rise and more extreme storms.
Exxon Mobil responded last month by petitioning a state court in Tarrant County, Texas, to subpoena California officials and lawyers involved with the lawsuits. In a novel legal tactic, Exxon Mobil alleges that the local government officials are defrauding buyers of municipal bonds by not disclosing to lenders the climate risks they have claimed in their lawsuits.
It is unlikely that Exxon Mobil will ultimately win in court, but the tactic may succeed in discouraging other cities and states from filing similar lawsuits. That may be the point.
“We knew they were going to deliver a counterpunch, but we didn’t know what it would be,” said Ryan Coonerty, a supervisor in Santa Cruz County, one of the local governments suing the oil companies. Exxon Mobil’s response, he said, “is particularly outrageous and clearly an effort of intimidation.”
It is not the first time Exxon Mobil has attempted to pre-empt climate change litigation and investigations that could expose it to court damages. After New York and Massachusetts attorneys general issued subpoenas to investigate Exxon Mobil’s practices, the company sued both of them, claiming they were part of politically motivated conspiracy against the company.
“The reasons our investigations came to light was because Exxon actually sued us to shut down our investigations,” Massachusetts Attorney General Maura Healey said last week.
Healey called the Exxon Mobil lawsuits an “unprecedented step” to “squash the prerogative of state attorneys general to do their jobs.” Since then, no other state has joined New York and Massachusetts in going after the company.
For both sides in the ongoing litigation, the stakes are considerable. Climate activists have been preparing for more than a decade to launch mass litigation against the oil industry and other companies responsible for large emission of greenhouse gases. They compare their litigation to lawsuits that eventually cost the tobacco industry billions of dollars.