State v. American Petroleum Institute

A Minnesota District Court denied fossil fuel industry defendants’ motions to dismiss all but one of the claims brought by the State of Minnesota alleging that the defendants misled consumers and the public regarding fossil fuels’ contributions to climate change. The court denied American Petroleum Institute’s and ExxonMobil defendants’ motions to dismiss for lack of personal jurisdiction, concluding both that the defendants consented to general jurisdiction by registering to conduct business in the state and also that specific personal jurisdiction was consistent with the notion of fair play and substantial justice. The court rejected the defendants’ contentions that federal common law or the Clean Air Act preempted the State’s claims. The court concluded that the Clean Air Act had displaced federal common law governing interstate air pollution but further concluded that even if federal common law still existed it would not preempt the state law consumer deception and failure-to-warn claims, which were not attempts to regulate transboundary air pollution. In addition, the court held that the Clean Air Act did not preempt the state law claims based on conflict preemption because the State’s claims of failure to warn and deceptive marketing would not interfere with Congress’s objective of federal regulation of air pollution under the Clean Air Act. The court also rejected the argument that the foreign affairs doctrine preempted the State’s claims, finding that the claims would not be an obstacle to climate change-related negotiations with foreign nations. In addition, the court found that the case did not present nonjusticiable political questions and that the dormant Commerce Clause did not preclude the State’s claims. The court also found, at the pleadings stage, that the First Amendment did not protect the defendants’ allegedly misleading and fraudulent speech. In addition, the court declined to dismiss the State’s claims as time-barred. The court also found that the State sufficiently pled that the defendants’ alleged deception resulted in climate-related harms; sufficiently pled a failure to warn; alleged fraud with sufficient particularity; and sufficiently pled misrepresentation, fraud by omission, and intent to deceive. The court found that the State did not sufficiently allege that the defendants’ statements were made “in connection with the sale of any merchandise” and therefore did not State a claim under the Minnesota Consumer Fraud Act. But the court found that the State did adequately state statutory consumer fraud claims under the Minnesota Deceptive Trade Practices Act and the Minnesota False Statement in Advertisement Act and had sufficiently alleged a conspiracy. The court also rejected an argument that Minnesota’s anti-SLAPP (Strategic Litigation Against Public Participation) barred the State’s case. The court concluded that the anti-SLAPP law did not apply to enforcement actions brought by the Attorney General.

The State of Minnesota filed a lawsuit in state court against the American Petroleum Institute, Exxon Mobil Corporation (Exxon), Koch Industries, Inc. (Koch), and Exxon and Koch subsidiaries, alleging that the defendants caused a “climate-change crisis” in the state through a “campaign of deception.” The State alleged that it sought “to hold Defendants accountable for deliberately undermining the science of climate change, purposefully downplaying the role that the purchase and consumption of their products played in causing climate change and the potentially catastrophic consequences of climate change, and for failing to fully inform the consumers and the public of their understanding that without swift action, it would be too late to ward off the devastation.” The complaint asserted a claim under the Minnesota Consumer Fraud Act as well as claims of strict and negligent liability for failure to warn; common law fraud and misrepresentation; deceptive trade practices under Minnesota Statutes § 325D.44; and violation of Minnesota’s False Statement in Advertising Act. Minnesota asked the court to order the defendants to publish all research conducted by the defendants and their agents that relates to climate change and to “fund a corrective public education campaign in Minnesota relating to the issue of climate change.” In addition, Minnesota sought civil penalties, restitution “to remedy the great harm and injury to the State resulting from Defendants’ unlawful conduct,” and disgorgement of profits resulting from unlawful conduct. In addition, Minnesota asked the court to award attorney’s fees and other costs of investigation and litigation.