Trial date set for AG’S case vs. Exxon

State arguing oil giant misled investors about impact of climate change

Former Attorney General Eric Schneiderman may be gone from office, but the lawsuit he began against oil giant Exxon Mobil Corp. is back in the spotlight.

Stemming from an investigation that started four years ago, the state’s lawsuit against Exxon Mobil alleging the company mislead investors is set to go to trial in state Supreme Court in Manhattan on Oct. 23.

Schneiderman abruptly stepped down in May 2018 amid allegations of abuse against four women he knew. Now his successor, Attorney General Letitia James, is carrying on with the ambitious, potentially high-risk, high-reward suit that alleges Exxon Mobil failing to disclose to investors how the cost of climate change could impact the company’s bottom line.

James is using the Martin Act, an expansive statute designed to protect against stock fraud, to allege that the oil giant should have disclosed the downsides to its future profits in light of the environmental challenges and subsequent costs that fossil fuel use is having on the environment.

Environmentalists have praised the filing, but opponents see it as an example of attempts to use the courts to change social or economic policy that should be left to elected lawmakers.

“This is an important case,” said Boyden Gray, a lawyer and former Bush Administration diplomat who spoke about the issue Monday during a teleconference with the Federalist Society, a group of conservative, states-rights lawyers of whom Gray is a member.

Court records indicate that the case could drag on for a while and has already grown highly complex.

“If you’re contemplating introducing 12,000 documents in evidence, you should rethink that, and if you are contemplating introducing 1,200 documents you should rethink that too,” state Supreme Court Justice Barry Ostrager told the two parties during a pre-trial hearing in August in which the opposing lawyers tussled over what would be introduced into evidence and how.

The precise number of documents or evidence to be used in the case wasn’t immediately clear. But in one filing, Exxon Mobil noted that it has already provided four million pages of documents.

The Attorney General’s office will try to prove Exxon mislead investors in part by relying on a raft of experts who try to predict how the

various trends in oil and gas use would be impacted by climate change and how that would affect the company’s profits. Exxon will in return have their own experts and predictions.

“Exxon built a facade to deceive investors into believing that the company was managing the risks of climate change regulation to its business when, in fact, it was intentionally and systematically underestimating or ignoring them, contrary to its public representations,” Acting Attorney General Barbara Underwood said when the case was filed in 2018.

“Since it launched this groundless investigation nearly three years ago, OAG has publicly pursued an ever-shifting array of failed investigative theories in search of one that will stick,” Exxon lawyers wrote in one of their responses.