People of State of New York v. PricewaterhouseCoopers LLP

The New York Appellate Division affirmed a trial court order requiring Exxon Mobil Corporation’s (Exxon’s) accounting firm to comply with a subpoena from the New York State Attorney General in its investigation into Exxon’s climate change-related disclosures. The Appellate Division ruled that the court below had properly found that New York law on privilege applied and did not recognize an accountant-client privilege. The appellate court rejected Exxon’s contention that courts should apply an “interest-balancing analysis” to decide whether New York or Texas choice of law should govern the evidentiary privilege.

Exxon Mobil Corporation (Exxon) filed a brief arguing that the New York Appellate Division should reverse a trial court ruling that an evidentiary accountant-client privilege created by Texas law did not bar the trial court from ordering Exxon's accounting firm to produce certain documents.

At a hearing on August 29, 2018, a New York trial court ordered Exxon to produce 14 “readily available” or “easily produceable” spreadsheets that the New York attorney general sought in its investigation into Exxon’s climate change-related disclosures (but not 12 other spreadsheets requested by the attorney general that Exxon said would require extensive work). Exxon must also respond to an interrogatory to be served by the attorney general, which the attorney general indicated would concern whether Exxon applied a directive to use an “alternate methodology” to for accounting for greenhouse gas costs to assets and businesses across the company. In addition, Exxon agreed to provide documents it had already provided to the Securities and Exchange Commission but not to the attorney general. At the outset of the hearing, the judge told the attorney general that “this cannot go on interminably” and that “you’ve been investigating for two years. So you’re either going to file a case or you’re not going to file a case.” The attorney general indicated it was coming to an end of the investigation. Exxon told the court, “If they have a theory, they should bring a case. They should either put up or shut up.”