Exxon Mobil Corp. v. Schneiderman

The federal district court for the Northern District of Texas transferred Exxon Mobil Corporation’s (Exxon’s) lawsuit challenging climate change investigations by the New York and Massachusetts attorneys general to the Southern District of New York. The Texas federal court said that the Southern District of New York was the proper venue because a substantial part of the events or omissions giving rise to Exxon’s claims occurred in New York City at the AGs United for Clean Power press conference on March 29, 2016. The Texas federal court continued to express concerns about the motives of the attorneys general for commencing their investigations, citing evidence offered by Exxon that the attorneys general acted to further their own political goals in conjunction with the 2016 national election. The court also asked whether the reluctance of the attorneys general to disclose information shared at the March 2016 meeting and information shared after state attorneys general entered into a Climate Change Coalition Common Interest Agreement suggested the attorneys general were “trying to hide something from the public.” The court also noted Exxon’s assertions that the New York attorney general’s investigation had shifted in focus from focusing on historic climate change research to Exxon’s disclosures regarding oil and gas reserves and assets, which Exxon said indicated that the attorney general was “searching for a way to have leverage over Exxon in the public policy debate about climate change.” The court indicated that if the attorney general was “genuinely concerned about seeking protection for New York’s citizens for Exxon’s possible securities fraud regarding its oil and gas reserves and assets,” then he could seek protection for them in a securities class action, <a href="https://climatecasechart.com/case/ramirez-v-exxon-mobil-corp/">Ramirez v. Exxon Mobil Corp.</a>, currently pending before the court.

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On December 15, the federal district court for the Northern District of Texas stayed all discovery pending further order of the court in Exxon Mobil Corporation’s (Exxon’s) lawsuit seeking to bar ongoing climate change-related investigations by the attorneys general of Massachusetts and New York.

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In opposing the motion to quash, Exxon characterized its efforts as a “a set of narrowly tailored party discovery requests—including requests for production, requests for admission, interrogatories, and notices of deposition.”

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The New York attorney general filed a motion to dismiss the action on the grounds that the court lacked personal and subject matter jurisdiction, that venue was improper, that action was not ripe, and that Exxon did not have a plausible claim for relief.

The New York attorney general filed a motion to quash discovery, calling Exxon’s efforts to obtain internal information about New York’s ongoing state investigation “highly improper.”

Exxon opposed Healey’s motion to vacate the deposition and discovery orders, arguing that the motion was improper and that the court had acted within its discretion to order jurisdictional discovery and Healey’s deposition.

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On November 26, Healey filed a motion to vacate both the court’s deposition order and an earlier jurisdictional discovery order in which the court expressed concern that Healey had commenced the Massachusetts investigation in “bad faith,” based in part on Healey’s participation in a press conference with other state attorneys general and climate change advocates. Healey also asked the court to stay discovery until it had ruled on Healey’s motion to dismiss the amended complaint, which was filed on November 28, and to issue a protective order prohibiting Exxon from taking her deposition. Healey also said the court should defer all activity in the case while a Massachusetts Superior Court considered Exxon’s motion to set aside the civil investigative demand (CID). Healey argued that the court had abused its discretion by ordering discovery and issuing the deposition order where the court lacked personal jurisdiction, the action was unripe, and venue was improper. In addition, Healey argued that circumstances did not warrant deposition of a top executive department official or discovery in a collateral action challenging a lawful CID, and that the court’s concerns regarding Healey’s “bad faith” in commencing the Exxon climate change investigation would not justify discovery because the concerns would not trigger the bad faith exception to abstention under the Younger doctrine. Healey also argued that it was common for state attorneys general to coordinate and to make public statements regarding coordinated investigations.

Outside of court, the organization 350.org sent a letter to Exxon’s attorneys objecting to a subpoena it had received seeking, among other things, communications between 350.org and state attorneys general and other climate activists.

On November 17, 2016, the federal district court for the Northern District of Texas ordered Massachusetts Attorney General Maura Healey to appear for a deposition in Texas on December 13 in Exxon Mobil Corporation’s action against Healey and New York Attorney General Eric Schneiderman challenging the states’ climate change investigations. The court’s deposition order also advised that Schneiderman should be available for deposition in Texas on December 13 but said that it would wait to enter an order until after Schneiderman filed an answer to the first amended complaint.

Over Massachusetts Attorney General Maura Healey’s objections, the federal district court for the Northern District of Texas granted Exxon Mobil Corporation's motion for leave to add New York Attorney General Schneiderman as a defendant and to add new claims.

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Exxon issued a subpoena to Union of Concerned Scientists, seeking documents and other materials related to communications with state attorneys general, including materials related to the press conference involving the state attorneys general, and certain materials related to other events regarding climate change litigation against fossil fuel companies, to political fundraising, and to Exxon and other fossil fuel companies.

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A Texas resident (who also filed a <a href="https://climatecasechart.com/case/goldstein-v-climate-action-network/">lawsuit</a> under the Racketeer Influenced and Corrupt Organizations Act against a number of environmental organizations) sought to intervene in Exxon Mobil Corporation’s lawsuit against the Massachusetts attorney general. The plaintiff asserted in his motion to intervene that Exxon could not adequately represent his interests, citing the “pressure” exerted on Exxon by “climate alarmist politicians at home and abroad.”

After Exxon Mobil Corporation (Exxon) filed a motion requesting that the federal district court for the Northern District of Texas expedite consideration of Exxon's motion for leave to amend its complaint to add the New York attorney general as a defendant and to add new claims, the Massachusetts attorney general asked the court to deny the request. The Massachusetts attorney general argued that the “actual but unstated reason” for the “rush” to add the New York attorney general was to avoid the jurisdiction of the New York Supreme Court, which was then considering the New York attorney general’s motion to compel Exxon and its accountant to respond to a subpoena.

Attorney General Healey asked the court to reconsider its jurisdictional discovery order, arguing that the action should be dismissed based on a lack of personal jurisdiction. Healey also argued that venue was improper, and that “ample substantive evidence” was already in the record regarding the decision to issue the civil investigative demand.

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Exxon Mobil Corporation (Exxon) filed a motion for leave to add the Attorney General of New York as a defendant in the action in the federal district court for the Northern District of Texas in which Exxon seeks to bar enforcement of a civil investigative demand issued by Massachusetts Attorney General Maura Healey. Exxon indicated that the New York attorney general’s “sweeping subpoena” issued in November 2015 seeking 40 years of climate change-related documents was issued in furtherance of the illegal objective of depriving Exxon of its constitutional rights. (Exxon’s filings included the <a href="https://climatecasechart.com/files/case-documents/2015/20151104_docket-na_subpoena.pdf">subpoena</a> itself, which had not previously been publicly available.) Exxon said that it initially cooperated with the New York attorney general’s investigation believing it would be “fair and impartial” but that subsequent events—including a March 2016 press conference at which state attorneys general pledged to use their enforcement powers to address climate change and the disclosure of a common interest agreement between state attorneys general—had revealed the political and “pretextual nature” of the investigation. In addition to adding the New York attorney general as a defendant, Exxon also sought leave to add claims of federal preemption and for conspiracy to deprive Exxon of its constitutional rights. In support of the preemption claim, Exxon contended that the attempt by the Massachusetts and New York attorneys general to impose liability on Exxon for failing to take into account future climate change regulation was at odds with Securities and Exchange Commission rules and regulations for incorporating assumptions about future events.

The federal district court for the Northern District of Texas ordered the parties to conduct jurisdictional discovery to aid the court in determining whether it lacked subject matter jurisdiction over Exxon Mobil Corporation’s (ExxonMobil’s) action seeking to block the civil investigative demand (CID) issued by Massachusetts Attorney General Maura Healey. Healey issued the CID in connection with an investigation into unfair or deceptive acts or practices in trade or commerce with respect to fossil fuel products and securities. Healey argued in a motion to dismiss that Younger abstention—which is based on a “a strong federal policy against federal court interference with pending state judicial proceedings”—should apply because ExxonMobil was pursuing a parallel action in Massachusetts state court to challenge the CID. The Texas federal court said that ExxonMobil’s allegations raised concerns that Healey had issued the CID in bad faith, which would preclude Younger abstention. The court said that Healey’s actions and remarks leading up to issuance of the CID caused the court concern and presented the question of whether Healey “issued the CID with bias or prejudgment about what the investigation of Exxon would discover.” The court cited Healey’s participation in the AGs United for Clean Power Press Conference in March 2016 and her attendance at a pre-press conference closed-door meeting with a climate change activist and a lawyer with a “well-known global warming litigation practice.” The court also cited “anticipatory” remarks made by Healey about the ExxonMobil investigation.

In Exxon Mobil Corporation’s (ExxonMobil’s) action challenging a civil investigative demand (CID) issued by Massachusetts Attorney General Maura Healey, the federal district court for the Northern District of Texas appointed a mediator and ordered Exxon Mobil Corporation and Massachusetts Attorney General Maura Healey to mediate within 16 days of the court’s order (by October 8). ExxonMobil’s lawsuit alleged that the CID—which sought up to 40 years of ExxonMobil records related to climate change—violated constitutional and common law rights. The court’s mediation order followed a hearing at which the judge encouraged the parties to attempt to resolve their dispute out of court.

Parties that interceded in the lawsuit on ExxonMobil’s behalf included 11 states that expressed concern regarding unconstitutional use of investigative powers by state attorneys general, and a Massachusetts doctor to whom the attorney general had submitted a CID in an unrelated Medicaid fraud investigation.

In the reply in support of her motion to dismiss ExxonMobil's action, Attorney General Healey stated that she was not conceding the sufficiency of ExxonMobil’s claims and argued that ExxonMobil had misapplied precedents regarding personal jurisdiction. The attorney general reiterated that the court should abstain because ExxonMobil could pursue—and was pursuing—relief in Massachusetts state court. The attorney general also reiterated that Texas was not the proper venue.

ExxonMobil filed its opposition to the attorney general’s motion to dismiss the case, arguing that the court had personal jurisdiction over the attorney general and that abstention would not be appropriate. ExxonMobil also said that the constitutional claims were ripe for adjudication and that the venue was proper, and asserted that the attorney general had not contested the adequacy of the complaint’s allegations.

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In reply to the Massachusetts Attorney General's opposition to its motion for preliminary injunction, ExxonMobil reiterated its arguments that the attorney general's civil investigative demand violated the First, Fourth, and Fourteenth Amendments of the Constitution, as well as the dormant Commerce Clause, and argued that a violation of constitutional rights constituted irreparable harm and that the public had an interest in ensuring that law enforcement powers were executed constitutionally.

Eighteen states, the District of Columbia, and the Virgin Islands submitted an amicus curiae brief supporting the Massachusetts Attorney General. They argued that Exxon could not ask a federal court to impede a state attorney general’s investigation where a process for challenging the subpoena was available in state court.

Massachusetts Attorney General Maura Healey filed a motion to dismiss Exxon Mobil Corporation’s (ExxonMobil’s) lawsuit against her in a Texas federal court. Healey argued that the federal district court for the Northern District of Texas was not the proper forum for ExxonMobil’s action, which sought to bar enforcement of a civil investigative demand (CID) issued by Healey in connection with her office’s investigation into unfair or deceptive acts or practices in trade or commerce with respect to fossil fuel products and securities. Healey said the federal court did not have personal jurisdiction over her, that abstention was warranted, that the action was unripe, and that the venue was improper.

Massachusetts Attorney General Healey also opposed ExxonMobil’s motion for a preliminary injunction, stating that ExxonMobil had not demonstrated that it would suffer irreparable harm or that it was substantially likely to prevail on its constitutional claims. Healey also argued that a preliminary injunction would undermine Massachusetts’ investigatory powers and harm the state’s consumers and investors and the public interest.

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ExxonMobil filed a complaint in the federal district court for the Northern District of Texas against the Massachusetts Attorney General, asking the court to bar enforcement of a civil investigative demand (CID) issued to ExxonMobil in April 2016 and to declare that the CID violated ExxonMobil’s rights under federal and state law. ExxonMobil also moved for a preliminary injunction in the Texas federal court, and said that it would file a protective motion in Massachusetts state court to argue that the court lacked personal jurisdiction. ExxonMobil said it would lodge its objections to the CID in state court but would ask the Massachusetts court to stay its consideration of the objections because the Texas federal court should resolve the issue of the CID’s enforceability in the first instance. ExxonMobil’s complaint in the Texas federal court said that the CID indicated that ExxonMobil was the subject of an investigation under a Massachusetts statute concerning unfair or deceptive acts or practices in trade or commerce. ExxonMobil argued that it could not have violated the statute because it had not sold fossil fuel products, operated retail stores, or sold any form of equity to the general public in Massachusetts in the past five years. ExxonMobil alleged that the CID violated its rights under the First, Fourth, and Fourteenth Amendments and Dormant Commerce Clause of the U.S. Constitution and constituted an abuse of process under common law. At the end of June, the Texas federal court granted the parties’ joint motion to enlarge the time period for the Massachusetts Attorney General to respond to the complaint and motion for preliminary injunction “[i]n light of the complex nature of the case and the extensive documents filed by ExxonMobil.”

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