Exxon Climate Fight With ‘Green’ States Heats Up in Court

(Bloomberg) -- Exxon Mobil Corp.'s battle with New York and Massachusetts over their probes into the company's use of climate change data is heating up, and a key element of the national dispute is now in the hands of a Texas judge.

The states are investigating whether Exxon for years misled investors by hiding how climate change may affect its business. Massachusetts Attorney General Maura Healey issued a subpoena in April, and Irving, Texas-based Exxon sued Healey on the company's home turf to block it.

New York and Massachusetts, backed by a dozen other states, on Tuesday urged U.S. District Judge Judge Ed Kinkeade in Fort Worth, Texas, to throw out Exxon's suit on the grounds that the company is using the federal court system to trample the rights of states to investigate corporate wrongdoing.

“Exxon's lawsuit in Texas is nothing more than an attempt to put its practices beyond the reach of state prosecutors,” New York Attorney General Eric Schneiderman said in an e-mailed statement.

The states are probing whether Exxon violated securities laws and consumer-protection rules by withholding information allegedly obtained as early as the 1970s that man-made emissions were changing the climate.

States, Cities

They're part of a broader coalition of 25 states, cities and counties that has intervened to defend President Barack Obama's Clean Power Plan against legal challenges. That spawned claims in Congress that the probes are politically motivated and may stifle free speech by suppressing findings that question climate change.

Exxon spokesman Alan Jeffers declined to comment on the brief, saying the company would do so “via the court process.”

Exxon has been providing documents to New York's Schneiderman under that state's separate subpoena, according to the filing on Tuesday. The brief was backed by states including Mississippi, New Mexico, Oregon, Rhode Island and Vermont.

“Proper respect for the states' sovereign interests has long dictated that the federal courts should not needlessly impede this core duty of state Attorneys General to detect and halt misconduct,” the states said in the filing.

Spurning Congress

New York and Massachusetts in July said they won't comply with a demand by Congress for information on their Exxon probes, widening a partisan divide over the dispute. The demand from the House Committee on Science, Space and Technology is an “unconstitutional and unwarranted interference” in a legitimate state investigation, the states said.

Attorneys general from more than a dozen states have joined forces to fight global warming and look into whether companies have understated its effects in violation of state business, consumer and securities fraud laws. The group may jointly investigate the climate-change disclosures of oil and natural-gas companies, Schneiderman said in a statement in March.

The case is Exxon Mobil Corp. v. Healey, 4:16-cv-469, U.S. District Court, Northern District of Texas (Fort Worth).

To contact the reporter on this story: Erik Larson in New York at elarson4@bloomberg.net. To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Charles Carter, Andrew Martin