Climate Change: California Hypocrisy Turned up to 11

Readers may be vaguely aware that New York Attorney General Eric Schneiderman and two other AGs filed suit again ExxonMobil alleging that “they knew” about climate change decades ago, but have been practicing “deception” ever since. These lawsuits all came with subpoena demands for thousands of pages of documents, no doubt hoping to turn up . . . what exactly? This is a transparent attempt to turn policy disagreements into legal culpability. In fact there is considerable evidence that this legal action was part of a political strategy hit upon by environmentalists to replicate the experience of tobacco litigation.

ExxonMobil has not been taking this attack supinely. In a legal filing (PDF file) yesterday in Texas, the company notes:

Even though it has long acknowledged the risks presented by climate change, supported the Paris climate accords, and backed a revenue-neutral carbon tax, ExxonMobil has nevertheless been targeted by state and local governments for pretextual investigations and litigation intended to cleanse the public square of alternative viewpoints.

The motion ExxonMobil filed yesterday in Texas identifies 16 individuals who it believes conspired to get the attorneys general to bring this action. Some evidence of this collaboration may have been destroyed. ExxonMobil wishes to depose these 16. The filing continues:

This abuse of government power to impose a uniform perspective on climate policy was hatched over five years ago at a conference of special interests in La Jolla, California. The participants advocated for government investigations and litigation against energy companies to “pressure” the targets to provide “support for legislative and regulatory responses to global warming.”

State attorneys general in New York, Massachusetts, and the Virgin Islands eagerly implemented the La Jolla “playbook.” At a March 2016 press conference promoting their actions against ExxonMobil, state officials spoke openly about their use of law enforcement tools to restrict the scope of permissible public debate about climate change. Eric Schneiderman, the Attorney General of New York, declared there was “no dispute” about climate change policy, only “confusion, and confusion sowed by those with an interest in profiting from the confusion and creating misperceptions in the eyes of the American public that really need to be cleared up.” Maura Healey, the Attorney General of Massachusetts, pledged that those who purportedly “deceived” the public—by disagreeing with her about climate change policy—“should be, must be, held accountable.” Claude Walker, the Attorney General of the Virgin Islands, proclaimed, “We have to look at renewable energy. That’s the only solution.” All three attorneys general issued burdensome subpoenas or investigatory document demands to ExxonMobil, just as the La Jolla playbook had recommended.

But this isn’t even the best part. This is:

Implementing a different page of the La Jolla playbook, a number of California municipal governments recently filed civil tort claims against ExxonMobil and 17 other Texas- based energy companies. In those lawsuits, each of the municipalities warned that imminent sea level rise presented a substantial threat to its jurisdiction and laid blame for this purported injury at the feet of energy companies.

One of the lawsuits, from San Mateo, claims: “[T]here is a 93% chance that the County experiences a devastating three-foot flood before the year 2050, and a 50% chance that such a flood occurs before 2030. Average sea level rise along the County’s shores are expected to rise by almost three feet by the year 2100, causing multiple, predictable impacts, and exacerbating the impacts of extreme events.”

Notwithstanding their claims of imminent, allegedly near-certain harm, none of the municipalities disclosed to investors such risks in their respective bond offerings, which collectively netted over $8 billion for these local governments over the last 27 years. To the contrary, some of the disclosures affirmatively denied any ability to measure those risks; the others virtually ignored them. At least two municipal governments [one of them San Mateo] reassured investors that they were “unable to predict whether sea-level rise or other impacts of climate change or flooding from a major storm will occur, when they may occur, and if any such events occur, whether they will have a material adverse effect on the business operations or financial condition of the County and the local economy.”

So which is it, San Mateo—serious climate risk or not? What happened to those certain probabilities in your lawsuit?

The ExxonMobil filing makes the obvious point:

The stark and irreconcilable conflict between what these municipal governments alleged in their respective complaints and what they disclosed to investors in their bond offerings indicates that the allegations in the complaints are not honestly held and were not made in good faith. It is reasonable to infer that the municipalities brought these lawsuits not because of a bona fide belief in any tortious conduct by the defendants or actual damage to their jurisdictions, but instead to coerce ExxonMobil and others operating in the Texas energy sector to adopt policies aligned with those favored by local politicians in California.

That’s putting it mildly. The more direct way is that these California cities are lying in one of these legal matters—the lawsuit claim or their bond disclosures. The courts should not take kindly to this kind of behavior. I think bondholders might have a cause of action here.

Good for ExxonMobil in defending themselves and fighting back. As their filing aptly sums it up:

Regulating debate over public policy, even when styled as clearing up “confusion” and “deception,” is not a legitimate law enforcement function.

P.S. Here’s another example from Oakland:

Also this:

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