Commonwealth v. Exxon Mobil Corp.

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.”

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In two decisions, a Massachusetts Superior Court denied Exxon Mobil Corporation’s (Exxon’s) motions to dismiss an action brought by the Massachusetts Attorney General asserting that Exxon systematically and intentionally misled investors and consumers about climate change. In the first decision, the court declined to dismiss the action on personal jurisdiction grounds or for failure to state a claim. With respect to personal jurisdiction, the court found that the Commonwealth sufficiently alleged that its investor deception claim arose from Exxon’s contacts with Massachusetts. Regarding the consumer deception claims, the court found that the claims arose from Exxon’s advertisements through its Massachusetts franchisees, and that the court therefore could assert personal jurisdiction over Exxon based on the Supreme Judicial Court’s <a href="https://climatecasechart.com/wp-content/uploads/case-documents/2018/20180413_docket-SJC-12376_opinion.pdf">previous determination</a> that Exxon’s franchise network of retail service stations satisfied the “transacting any business” prong of the Massachusetts personal jurisdiction statute. The court also found that the exercise of jurisdiction over Exxon satisfied the Massachusetts long-arm statute and due process requirements. In rejecting Exxon’s arguments that Massachusetts failed to state a claim, the court found that Massachusetts’s allegations regarding statements to investors that climate change risks did not pose a meaningful threat were sufficient to survive a motion to dismiss. The court rejected Exxon’s characterization of the allegations as based on failures to disclose information readily available to the public. The court also found that the allegations plausibly alleged that Exxon deliberatively misrepresented and omitted information about the risks of climate change and that Exxon was engaged in trade or commerce when it made the allegedly deceptive statements. The court also found that the Commonwealth’s deceptive advertising claims did not have to be based on allegations that Exxon’s representations about particular fuel products were false, only that the representations were misleading. In addition, the court found that it could not conclude at this stage of the litigation that Exxon’s representations would not mislead a “reasonable consumer”; the court also was not persuaded by Exxon’s argument that the claims involved a “pure omission” not subject to liability. Regarding the Commonwealth’s “greenwashing” claims, the court concluded that it would not be appropriate to determine at the motion to dismiss stage whether the alleged misrepresentations were “inactionable puffery.” The court also declined to rule at this stage on whether any of the allegedly misleading statements to investors and customers constituted speech protected by the First Amendment.

In the second decision, the court denied Exxon’s special motion to dismiss under the Massachusetts anti-SLAPP (Strategic Litigation Against Public Participation) statute. The court found that Exxon failed to meet the threshold burden of showing that the Commonwealth claims were based on “petitioning activity” protected by the anti-SLAPP law. The court was not persuaded by Exxon’s contentions that its statements to investors were issued in a manner likely to reach or influence regulators and members of the public, and that its allegedly deceptive statements about its products constituted advocacy of climate policy choices and attempts to enlist public participation in policy debate. The court found that Exxon did not show that it made the statements “solely, or even primarily, to influence, inform, or reach any governmental body, directly or indirectly. Instead, the statements appear to be directed at influencing investors to retain or purchase Exxon’s securities or inducing consumers to purchase Exxon’s products and thereby increase its profits.”

On October 24, 2019, the Massachusetts attorney general filed a complaint in Massachusetts Superior Court asserting that Exxon Mobil Corporation (Exxon) committed deceptive practices against Massachusetts investors and consumers by failing to disclose climate change risks, misrepresenting its business practices related to use of proxy costs of carbon, misleadingly advertising its products, failing to disclose its products’ impacts on climate change, and engaging in greenwashing campaigns. The complaint said Exxon’s actions and practices violated the Massachusetts Consumer Protection Act. The attorney general seeks injunctive relief, penalties, the costs investigation, and attorneys’ fees. Prior to the filing of the lawsuit, the Superior Court denied an emergency motion by Exxon for an extension of time in which to initiate a meet-and-confer with the attorney general’s office. Exxon <a href="https://www.climateliabilitynews.org/2019/10/24/massachusetts-exxon-climate-fraud-maura-healey/">reportedly</a> argued that it had a right to confer in person and that it could not do so until November due to its attorneys’ involvement in the ongoing trial in the New York attorney general’s fraud action against Exxon.

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