Commonwealth v. Exxon Mobil Corp.

The Massachusetts Supreme Judicial Court affirmed a trial court’s denial of Exxon Mobil Corporation’s (Exxon’s) special motion to dismiss the Massachusetts Attorney General’s enforcement action alleging that Exxon’s communications with investors and consumers related to climate change constituted unfair and deceptive practices. Exxon filed the special motion under Massachusetts’s anti-SLAPP (Strategic Litigation Against Public Participation) law, which protects parties exercising their right of petition. The Supreme Judicial Court held that the anti-SLAPP law did not apply to government enforcement actions brought by the Attorney General. The court found that this interpretation was grounded in the statutory language, the rules of construction applicable to enforcement of statutes against the Commonwealth, and the legislative history and purpose of the anti-SLAPP law.

Exxon Mobil Corporation filed a brief in its appeal of a Massachusetts state trial court’s denial of Exxon’s special motion to dismiss the Commonwealth of Massachusetts’ action alleging that Exxon systematically and intentionally misled investors and consumers about climate change. Exxon filed the special motion to dismiss under the Massachusetts anti-SLAPP (Strategic Litigation Against Public Participation) statute. In its appeal, Exxon argued that by denying its motion despite recognizing that some statements challenged by the Commonwealth constituted petitioning activity, the court’s decision “jeopardizes foundational First-Amendment protections.” Exxon argued that its statements were “made to influence policymakers and the public on energy policy” and therefore fell within the definition of petitioning. In addition, Exxon argued that the trial court improperly focused on Exxon’s “motive for speaking rather than on the basis of the Commonwealth’s claims.” Exxon also contended that the trial court erred by holding that the anti-SLAPP law protects only statements, and not omissions—Exxon asserted the “omissions” in this case related to Exxon’s “refusal to adopt the Commonwealth’s preferred viewpoints on climate change” and that the Commonwealth could not use this case to compel Exxon “to publicly advocate for the Commonwealth’s views on the exigency of climate change or the merits of energy policy [Exxon] does not support.” Exxon further argued that the trial court should have at least dismissed the Commonwealth’s claims to the extent the claims related to statements the court recognized as petitioning activity.

The federal district court for the District of Massachusetts issued a decision explaining the rationale for its March 18, 2020 order remanding Massachusetts’s fraud case against Exxon Mobil Corporation (Exxon) to state court. In its lawsuit, Massachusetts asserts causes of action under the Massachusetts Consumer Protection Act based on allegations that Exxon knew for decades that greenhouse gas emissions from fossil fuels were contributing to climate change, that Exxon downplayed the risks of climate change, and that Exxon deceived investors and consumers with misrepresentations concerning the company’s products and its management of climate change risks. The district court found that Massachusetts’s well-pleaded complaint pleaded only state law claims, “which are not completely preempted by federal law and do not harbor an embedded federal question.” In doing so, the court rejected Exxon’s contention that federal common law governed and completely preempted state law claims; the court found that the complaint’s allegations were “far afield of any ‘uniquely federal interests.’” The court also rejected Exxon’s arguments that the federal-officer removal statute or the Class Action Fairness Act provided a basis for jurisdiction.

During a telephonic hearing on March 17, 2020, the federal district court for the District of Massachusetts denied Exxon Mobil Corporation’s motion to remand the Massachusetts attorney general’s consumer protection action alleging a failure to disclose climate risks and misleading marketing of products. The court <a href="https://www.bloomberg.com/news/articles/2020-03-17/massachusetts-can-keep-exxon-suit-in-state-court-judge-says">reportedly said</a> that this was “not a case where the issue is in any substantial doubt.” The judge <a href="https://www.law360.com/articles/1254126/exxon-climate-suit-headed-back-to-mass-state-court">indicated</a> he would issue a written opinion at a later date. The court denied Exxon’s request that it stay the order pending appeal.

On December 26, 2019, Massachusetts moved to remand its action against Exxon Mobil Corporation under the State’s consumer protection law back to state court. Massachusetts asserted that its complaint focused solely on alleged violations of the Massachusetts Consumer Protection Act and did not raise any federal claims. The attorney general argued that all of Exxon’s bases for removal were “implausible” and had no support in law or fact not only because the complaint alleged only violations of a single state law but also because the claims did not require the disposition of any federal issue, did not arise under federal common law, did not involve action by Exxon taken under the direction of a federal officer or agency, and did not constitute a “class action” under the Class Action Fairness Act. The attorney general also said the federal court should ignore Exxon’s allegations of conspiracy—which the attorney general characterized as “unsupported innuendo”—as a basis for removal and instead focus on the “four corners” of the complaint.

In the lawsuit brought by the Commonwealth of Massachusetts against Exxon Mobil Corporation (Exxon) under the Massachusetts Consumer Protection Act, the Massachusetts Superior Court granted the Commonwealth’s motion to compel production by the consulting company McKinsey & Company, Inc. of two documents related to McKinsey’s 2017 engagement to assess Exxon’s corporate risks and its 2019 engagement to assist with development of a corporate framework for sustainability. The documents were (1) a draft presentation that contained comments from an Exxon in-house attorney and (2) McKinsey’s notes from interviews with Exxon attorneys “about the regulatory environment in which Exxon operates and the risks Exxon faces.” The court concluded that the attorney-client privilege did not apply because Exxon did not demonstrate that McKinsey’s business consulting work or the documents at issue “were necessary to the exchange of attorney-client communications.”

In the Massachusetts Attorney General’s action alleging that Exxon Mobil Corporation (Exxon) misrepresented and failed to disclose material facts about climate change risks, a Massachusetts Superior Court denied in part and allowed in part the parties’ motions (six by Exxon and two by the Commonwealth) to compel responses to document requests and interrogatories. First, the court said it would not compel further answers to Exxon’s “extraordinarily broad” requests regarding the Attorney General’s investigation and preparation of the case. The court noted that it had previously ruled that Exxon could not pursue defenses based on selective enforcement and improprieties in the investigation. Second, the court ruled that the Commonwealth only had to produce publicly disclosed and publicly available information in response to a request for documents related to the Attorney General’s involvement in rulemaking proceedings and in <a href="https://climatecasechart.com/case/massachusetts-v-epa/">Massachusetts v. EPA</a> and <a href="https://climatecasechart.com/case/kain-v-department-of-environmental-protection/">Kain v. Department of Environmental Protection</a>, which Exxon contended would show that investors and consumers were generally aware of climate risks. Third, the court declined to require the Commonwealth to produce common interest agreements between the Attorney General and other state attorneys generation regarding actions against energy companies. The court allowed the request for documents related to communications with a private attorney the Attorney General considered hiring, but only prior to the date on which the Attorney General began to consider hiring the attorney. Fourth, the court denied Exxon’s requests for information about the Commonwealth’s use of fossil fuels and investment in energy companies but directed the Commonwealth to produce publicly disclosed or available documents responsive to the request for information about the Commonwealth’s knowledge about climate change causes and challenges posed by reducing fossil fuel use. Fifth, the court denied Exxon’s request for documents from other Massachusetts agencies. Sixth, the court directed the Commonwealth to provide additional explanations regarding allegedly deceptive statements were deceptive. Seventh, the court denied Exxon’s motion to compel disclosure of agencies’ internal emails regarding, among other things, purchase of fossil fuel products and knowledge about risks of climate change. Eighth, the court denied Exxon’s request to compel the developer of a wind energy project to disclose internal communications and documents regarding the project. The court stated that even if information about the project was relevant, there had been considerable public information about the project. The court also stated that it was “inconceivable to me that this case could involve the admission of internal information about a particular wind project as bearing on the deceptiveness of Exxon’s representations to its investors, consumers, and regulators in Massachusetts.” Regarding the Commonwealth’s motions, the court said it would require Exxon to adhere to initial agreements for production but would not compel Exxon to provide further response to interrogatories regarding the stranding of hydrocarbon reserves and regarding the statement “Keeps your engine 2x cleaner for better gas mileage.”