The State of New York sued Exxon Mobil for fraud on Wednesday, claiming that the fossil fuel company hid the potential impact of climate change from its investors.
The lawsuit follows three years of investigation, started under disgraced former Attorney General Eric Schneiderman, who resigned in May over allegations that he abused women.
The suit also comes just four months after a federal judge in California threw out a similar case by San Francisco against Exxon Mobil and other fossil fuel companies.
The New York Times reported:
The suit does not charge Exxon with playing a role in creating climate change, though the burning of fossil fuels is a major contributor to human-driven global warming. Rather, it says the company engaged in a “longstanding fraudulent scheme” to deceive investors, analysts and underwriters “concerning the company’s management of the risks posed to its business by climate change regulation.”
Exxon told the world that it was prepared for the more stringent regulations that would inevitably be required to combat climate change, the attorney general’s office said. But in reality, according to the complaint, the company “employed internal practices that were inconsistent with its representations, were undisclosed to investors, and exposed the company to greater risk from climate change regulation than investors were led to believe.”
In June, however, U.S. District Judge William Alsup — a Bill Clinton appointee — told the City of San Francisco:
The problem deserves a solution on a more vast scale than can be supplied by a district judge or jury in a public nuisance case. … While it remains true that our federal courts have authority to fashion common law remedies for claims based on global warming, courts must also respect and defer to the other co-equal branches of government when the problem at hand clearly deserves a solution best addressed by those branches.
New York may hope to prevail where because of a unique state law called the Martin Act. As Breitbart News’ financial editor John Carney wrote for CNBC:
The Martin Act’s fearsomeness comes from the vast discretionary powers it grants New York prosecutors and the relative ease of proving a case under the law. New York prosecutors can subpoena almost any document from anyone doing business in New York.
…
[The Attorney General’s office can use it in either criminal or civil cases.
Perhaps even more importantly, the Martin Act doesn’t require proof of fraudulent intent or even fraudulent effect. Even if no one involved in the transactions was actually deceived, it is possible to prove a Martin Act violation so long as someone was harmed.
In a curious twist, one of the attorneys who signed the complaint against Exxon Mobil is Matthew Eisenson, who holds the office of “Special Assistant Attorney General” (SAAG). As the Competitive Enterprise Institute noted in a report in August, “Law Enforcement for Rent: How Special Interests Fund Climate Policy through State Attorneys General,” SAAGs are “Research Fellows” funded by former New York City major Michael Bloomberg:
Led and funded by former New York Mayor Michael Bloomberg, this scheme hires “Research Fellows,” which it then places as activist “Special Assistant Attorneys General.” All of the participating OAGs [offices of attorneys general] had to promise that this work would not get done but for this private funding. All OAGs also certified they are not violating the law by accepting privately funded prosecutors. At best, as several OAGs tacitly admit, this unprecedented arrangement operates in a gray area with neither prohibition nor authority. One state where the scheme is arguably illegal is New York, where disgraced former Attorney General Eric Schneiderman had a leading and organizing role at every stage of the campaign this paper describes.
Last month, the Washington Free Beacon reported that the State of Oregon’s legislative analyst had concluded that a similar SAAG arrangement “does not comply” with Oregon law governing the payment and supervision of state employees.
Joel B. Pollak is Senior Editor-at-Large at Breitbart News. He is a winner of the 2018 Robert Novak Journalism Alumni Fellowship. He is also the co-author of How Trump Won: The Inside Story of a Revolution, which is available from Regnery. Follow him on Twitter at @joelpollak.
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