Exxon pushing back against city’s climate change lawsuit
SANTA CRUZ >> In December, the city and county of Santa Cruz joined a wave of coastal California communities suing fossil-fuel companies for climatechange related damages. But last week, ExxonMobil pushed back against what it called “abusive law enforcement tactics and litigation,” threatening to file its own legal action and accusing the local jurisdictions of hypocritically omitting reference to climate change damages from their own bond disclosures.
“The stark and irreconcilable conflict between what these municipal governments alleged in their respective complaints and what they disclosed to investors in their bond offerings indicates that the allegations in the complaints are not honestly held and were not made in good faith,” reads the 60-page motion, which was filed Monday in a Texas court.
Santa Cruz and county officials named by Exxon include City Manager Martín Bernal, City Attorney Anthony P. Condotti, Santa Cruz County Chief Administrative Officer Carlos Palacios and County Counsel Dana McRae.
Exxon is seeking to depose — interview under oath — each official to investigate a potential lawsuit, taking advantage of a uniquely flexible Texan rule that allows pre-lawsuit depositions in certain cases. Officials from San Francisco, Oakland, San Mateo County, Marin and Imperial Beach are also named.
Condotti called the move by Exxon “a sham” and “obviously a pretext for harassment.”
“The notion that the city provided some misleading information in its bond disclosures is preposterous,” he said.
Exxon’s filing details a number of claims made in the respective complaints filed in Santa Cruz County Superior Court on Dec. 20. Among them are the county’s claim of a 98 percent likelihood of a three-foot flood by 2050, and its estimate that $742 million in property is at risk due to climate-change related storms, fires and floods.
“None of these dire and specific warnings of climate change-induced sea level rise or wildfires appear in the disclosures provided to investors in Santa Cruz City and County bond offerings,” Exxon’s attorneys wrote, referencing recent bond disclosures filed by each jurisdiction in 2016 and 2017, which detail relevant financial information and how the bonds will be repaid. “Indeed, their disclosures lack any express reference to climate change, global warming, or changes in Santa Cruz’s hydrologic regime.”
City Manager Bernal said that such information was not included in the bond documents because they include only a near-future snapshot of risks. He said he has not seen climatechange related estimates on any such disclosures.
If those projections were of interest to investors, he said, the information is readily available on the city’s website.
“The idea that somehow we’re conspiring or hiding just doesn’t make sense,” Bernal said.
Daniel Farber, who co-directs the UC Berkeley Center for Law, Energy and the Environment, said in an email that he hadn’t reviewed the filing in detail but that at first blush it didn’t appear as if Exxon had a strong case.
Condotti said that while he believes Exxon’s claims are without merit, he is not surprised by the development. “We’re filing this lawsuit against 29 major international corporations,” he said. “The fact that they would try to bring counteractions or take other procedural maneuvers is certainly something that we contemplated.”
The city’s ongoing lawsuit against the companies will be unaffected, he said. No date has been set for a hearing in that case.
On Tuesday, New York City joined the legal fray by filing its own climatechange related lawsuit against Exxon, BP, Chevron, Conoco-Phillips and Royal Dutch Shell.