An issue of particular importance to long-term investors

October 22, 2019 1:07 AM

An unprecedented climate change lawsuit against American oil giant Exxon Mobil is set to go ahead in New York. "Exxon's trial on the fraud claims will start on Tuesday and is expected to last 15 days. Former US Secretary of State Rex Tillerson, who led Exxon for a decade, is among those likely to appear in court." E&E News article. InsideClimateNews article. CBS.

Complaint (PDF) by the New York Attorney General. The complaint alleges four causes of action, all of which are some variation of fraud:

• Martin Act securities fraud,
• persistent fraud and illegality under the New York Executive Law, and
• common-law causes of action for actual and equitable fraud.

Sample quote from the complaint:

Exxon’s fraud was sanctioned at the highest levels of the company. For example, former Chairman and Chief Executive Officer (CEO) Rex W. Tillerson knew for years that the company’s representations concerning proxy costs were misleading. In particular, Mr. Tillerson knew that the company was using lower, undisclosed proxy cost figures in its internal guidance, rather than the higher, publicly disclosed proxy cost figures in its public representations, in its investment decisions and business planning. Yet despite this knowledge, and despite the recognition that the publicly disclosed proxy costs more accurately reflected the risk of future climate change regulation, Mr. Tillerson allowed the significant deviation between the higher proxy cost figures in Exxon’s public representations and the lower proxy cost figures in Exxon’s undisclosed internal guidance to continue uncorrected for years.

ExxonMobil fraud previously. See also Downside: A potentially uninhabitable Europe.

posted by Not A Thing (11 comments total)

The federal contrast to state action is interesting: Juliana v. United States. Tillerson et al. might just get nailed in a state court for the fiduciary equivalent of Al Capone-like fraud charges, but corrupted federal courts seem to have decided there is no right to a clean environment under the core Constitutional principles of life, liberty, and the pursuit of happiness — even if allowing the shared commons of an environment to be ruined plainly violates those inalienable rights.
posted by They sucked his brains out! at 1:59 AM on October 22, 2019 [4 favorites]

I suppose this is the best we can expect in the U$A. They really should be charged with murdering the planet.
posted by Kirth Gerson at 3:37 AM on October 22, 2019 [7 favorites]

the core Constitutional principles of life, liberty, and the pursuit of happiness

that's in the Declaration of Independence, not the Constitution
posted by thelonius at 4:01 AM on October 22, 2019 [10 favorites]

$LAWYER$$
posted by DJZouke at 5:18 AM on October 22, 2019

that's in the Declaration of Independence, not the Constitution

The large print giveth and the small print taketh away.
posted by pompomtom at 5:33 AM on October 22, 2019 [10 favorites]

Obligatory as always t-shirt
posted by lalochezia at 5:58 AM on October 22, 2019 [3 favorites]

even if allowing the shared commons of an environment to be ruined plainly violates those inalienable rights.

Phhhtthhp "commons." You probably think air should be free, and that you have some kind of "right" to breathe.
posted by Aardvark Cheeselog at 6:33 AM on October 22, 2019 [3 favorites]

In retrospect, I probably should have put scare quotes around the title, which is taken from paragraph 53 of the complaint. It's a little too easy to read it non-ironically otherwise...
posted by Not A Thing at 8:57 AM on October 22, 2019

that's in the Declaration of Independence, not the Constitution

You're right, just trying to point out the irony of going after these guys on what amounts to technicalities.
posted by They sucked his brains out! at 11:00 AM on October 22, 2019

Worth noting that the right to a clean environment was well-established under the common law at the time the US Constitution was written. See e.g. Blackstone:

[I]t is a nuisance to stop or divert water that uses to run to another’s meadow or mill; to corrupt or poison a water-course, by erecting a dyehouse or a lime-pit for the use of trade, in the upper part of the stream; or in short to do any act therein, that in its consequences must necessarily tend to the prejudice of one’s neighbor. So closely does the law of England enforce that excellent rule or gospel-morality, of "doing to others, as we would they should do unto ourselves."

Industry has been working for centuries to wear those protections down to nothing, and this campaign has borne considerable fruit -- not least in the fact that US law students today learn about nuisance, if at all, only as a sort of embarrassing appendage to the law of torts or property. But it's striking that, even as public nuisance continues to be at the heart of a considerable amount of climate-change litigation, "environmental rights" are still often treated as something new and strange, a "cutting edge" legal theory rather than part of the bedrock on which the whole US constitutional order was built.
posted by Not A Thing at 11:24 AM on October 22, 2019 [9 favorites]

And speaking of nuisance law, SCOTUS has just allowed Baltimore's public nuisance claim against various fossil-fuel giants to move forward in Maryland state court (by denying a stay).
posted by Not A Thing at 12:06 PM on October 22, 2019 [3 favorites]