State v. Exxon Mobil Corp.

A Connecticut Superior Court denied Exxon Mobil Corporation’s (Exxon’s) motion to strike the State of Connecticut’s claims that Exxon violated the Connecticut Unfair Trade Practices Act (CUTPA) by engaging in a decades-long “systematic campaign of deception” regarding the connection between its products and climate change and by more recently engaging in a “greenwashing” campaign regarding the environmental benefits of its activities. First, the court concluded that federal law did not preclude Connecticut’s claims. Although the court adopted the Second Circuit Court of Appeals’ holding in <a href="https://www.climatecasechart.com/documents/second-circuit-rejected-new-york-citys-state-law-climate-claims-against-oil-companies_5cff">City of New York v. Chevron Corp.</a> that federal common law or the Clean Air Act would continue to govern regulation of interstate and international emissions, and therefore the production, sale, and use of fossil fuel products, the court found that Connecticut’s complaint did not seek that type of regulation but instead “seeks to regulate only the defendant’s marketing conduct related to those products.” Second, the court found that the complaint stated legally sufficient claims of unfair and deceptive actions or practices under CUTPA. The court noted that the law regarding the geographic reach of CUTPA was “unsettled” but concluded that it was not necessary to resolve the issue at this stage of the litigation because the complaint sufficiently alleged that some of the alleged tortious conduct (such as Exxon’s publication of “advertorials”) occurred in Connecticut. In addition, the court found that the complaint sufficiently alleged that Exxon’s statements “were intended to and did promote the sale of [its] products” and therefore were made “in the conduct of any trade or commerce” under CUTPA. The court also found that additional development of the factual record was required to determine certain issues relevant to whether Exxon’s statements fell within CUTPA’s scope. For example, the court found that “[a]dditional context” was needed to determine whether Exxon’s statements regarding climate change and fossil fuels’ role in producing climate change could be interpreted as statements of fact. Other issues that the court said it could not resolve on a motion to strike included (1) whether the complaint’s allegations were sufficient to give rise to a duty for Exxon to disclose information regarding aspects of its business that ran counter to statements it made about its efforts to reduce its carbon footprint and (2) whether the alleged greenwashing statements were likely to mislead a reasonable consumer. Third, the court found that it could not determine at this stage of the litigation whether Exxon’s statements constituted commercial speech or protected noncommercial speech under the First Amendment or whether some or all of Exxon’s alleged misconduct constituted protected petitioning activity under the Noerr-Pennington doctrine. Fourth, the court rejected Exxon’s contention that Connecticut’s request for an order requiring Exxon to fund a “corrective education campaign” to remedy alleged disinformation violated the First Amendment. The court also found that additional development of the factual record would be necessary to support Exxon’s argument that allowing Connecticut to pursue civil penalties and disgorgement of profits for more than five decades of allegedly unlawful conduct would violate due process.

A Connecticut trial court determined that it had personal jurisdiction over Exxon Mobil Corporation (Exxon) and denied Exxon’s motion to dismiss the State of Connecticut’s lawsuit under the Connecticut Unfair Trade Practices Act. The State alleges that Exxon engaged in a “systematic campaign of deception” regarding its products’ impacts on climate. First, the court concluded that under Connecticut Appellate Court precedent Exxon consented to jurisdiction by registering to do business in Connecticut as a foreign corporation. The court further concluded that a due process analysis was unnecessary under Supreme Court and other federal precedents. Second, the court concluded that long arm jurisdiction applied to Exxon and that exercising such jurisdiction comported with due process. The court noted that its determinations regarding long arm jurisdiction were subject to the State’s “ultimate burden” to establish jurisdiction by a preponderance of the evidence.

Connecticut filed a lawsuit against Exxon Mobil Corporation in Connecticut Superior Court alleging that Exxon “misled and deceived Connecticut consumers about the negative effects of its business practices on the climate.” Connecticut alleged that Exxon executives and other agents knew as early as the 1950s that fossil fuel combustion contributed to global warming and that when Exxon had the opportunity in the 1980s “to responsibly contribute to public understanding of climate change and its potentially catastrophic consequences,” Exxon instead “began a systematic campaign of deception” to undermine climate science and maximize its profits. The complaint listed “myriad negative consequences in Connecticut” to which the State alleged the “campaign of deception” contributed, including sea level rise, flooding, drought, increases in extreme temperatures and severe storms, decreases in air quality, contamination of drinking water, increases in spread of diseases, and severe economic consequences. The State asserted eight counts under the Connecticut Unfair Trade Practices Act and sought injunctive and equitable relief; civil penalties; restitution for State expenditures attributable to Exxon to respond to the effects of climate change; disgorgement of revenues, profits, and gains; disclosure of research and studies on climate change; and funding of a corrective education campaign.