This article is written by Kushang, a student from Himachal Pradesh National Law University (HPNLU). This article talks about the rise in climate litigation in the U.S. with a special emphasis on Exxon Mobil, one of the biggest oil corporations in the world.
Table of Contents
Introduction
“Climate change is no longer some far-off problem; it is happening here, it is happening now.” This was rightly said by the former president of the United States, Barack Obama. The world has to realize the need to prevent climate change. Lately, there have been some positive signs on the issue. There has been an increase in climate change litigation in the world, particularly in the United States of America. Suits have been filed against many big oil companies. The Exxon Mobil company has been most highlighted in this issue of climate change.
Exxon Mobil
It is an American company headquartered in Irving, Texas. It is a multinational oil and gas corporation and was formed in 1999 by the merger of Exxon (standard oil company of New Jersey) and Mobil (standard oil company of New York). It is one of the largest companies in terms of revenue. The company is one of the largest oil companies. The company is involved in the production of millions of barrels of oil daily. The company produces about 3 percent of the world’s oil and about 2 percent of the world’s energy. The company has four famous brands Esso, Exxon, Mobil, and ExxonMobil Chemical. Exxon Mobil has faced criticism on its environmental impacts. This has led to various suits being filed against the company for promoting malpractices against the environment.
The controversy related to climate change
The controversy is related to Exxon Mobil activities concerned with global warming. It was claimed that the company was engaged in climate research and started delaying widespread acceptance and action on global warming. The company started research on the impact of global warming. The company was involved in funding various research for developing a scientific approach. They supported various universities in this work from 1970 to 1980.
From 1980, the company shifted its focus on climate change. The company started opposing various regulations related to preventing global warming. The company was a leader in climate change denial. The company then funded many projects which oppose the climate change and global warming issue.
Supporting climate change denial
Exxon Mobil has been very vocal about climate change denial. The company started questioning the concept in the 1990s. One possible reason for such action was the potential impact that new climate change policies could have on the oil sector. The company contradicted the concern of global warming and climate change. The company also started climate change denial on the international level. It was because of the role played by Exxon Mobil that prevented the ratification of the Kyoto Protocol by the United States of America. The protocol aimed at reducing greenhouse gases and preventing global warming. The company funded various organizations to conduct critical research of the Kyoto Protocol. The main motive of the organization behind this move was to undermine the public opinion that global warming is caused by the burning of fossil fuels. Exxon Mobil founded the Global Climate Coalition. A group that aimed to oppose greenhouse gas emission regulations. It is estimated that Exxon Mobil has spent more than 20 million dollars on organizations that supported climate change denial.
The company also granted 2.9 billion dollars to organizations to misinform the public about climate change through their websites. It was also said that the company had sought to misrepresent scientific evidence related to global warming and climate change. Exxon Mobil also supported the Science & Environmental Policy Project, founded by climate change denial advocates which said that most global warming is caused due to solar variation. The company reportedly granted 10000 dollars to the project.
Stand against emission regulations
The former CEO of Exxon Mobil, Lee Raymond was among the most outspoken executives of the US that spoke against regulations related to global warming. The company worked towards delaying the response toward climate change.
Investigations on Exxon Mobil
In 2015, two prominent politicians of the United States of America wrote a letter to the United States Attorney General (US AG) to investigate whether Exxon Mobil violated any federal law by failing to disclose truthful information about climate change. The representative of the company denied such claims. In October 2015, more than 40 environmental and social justice organizations wrote to the United States Attorney General (US AG) to investigate whether Exxon Mobil was engaged in providing wrong information to the public on climate change. The issue was highlighted.
The company’s donation to Donors Trust, a group that funds climate change denial was also highlighted. The New York Attorney General initiated an investigation to find whether Exxon Mobil’s statement to investors was consistent with the company’s decades of extensive scientific research. In October 2018, the company was sued by the State of New York after investigation.
The California Attorney General also initiated an investigation on Exxon Mobil. In 2016, investigations were started by the attorneys general of Massachusetts and the United States Virgin Islands. However, the latter withdrew from the investigation after months. Exxon Mobil challenged the action of the attorney general of Massachusetts however, in 2019 the Supreme Court of United States allowed the investigation of the attorney to go forward. This meant that Exxon Mobil could no longer withhold records that AG needed.
The New York lawsuit
The case was initiated after an investigation by the New York Attorney general against the Exxon Mobil Corporation. People of the State of New York v. Exxon. Mobil Corp. is one of the popular cases that dealt with climate change mitigation. The suit was about the representation made by Exxon Mobil to its shareholders about potential future costs related to the crisis.
This also indicated towards security fraud on part of the company. It was claimed that the company hid important facts and details which were essential for shareholders to make a rational choice. The information that Exxon Mobil fossil fuel business and production of fossil fuel products would lead to a disastrous impact on humankind and the environment. If the court agreed with the charges then the company would have to pay damages up to 1.6 billion dollars.
To win the case, the attorney general had to show that Exxon Mobil made false statements in its public disclosures to shareholders. He also needed to show that the information not disclosed by the company was important for investors to make a decision while buying and selling the stock. The attorney general failed to prove both the points. There was a lack of evidence. The judge stated that the evidence provided revealed that Exxon Mobil executives were uniformly committed to discharging their duties in the most comprehensive and meticulous manner possible.
Exxon affirmed the stand of the company stating that the investigation was baseless. Thus, although the company was able to dodge the New York suit on grounds of lack of evidence against the company, it still did not counter all the challenges. There have been various cases levied against the company in different states. The charges are not similar to the case of New York. Thus, it faces a threat from the investigations.
The rise in climate change litigation
There are other suits that Exxon Mobil is facing or the investigation that has been ordered into the working of the company. Some of them are:
Massachusetts
The state of Massachusetts sued Exxon Mobil in October 2019. They accused that the company misled its shareholders and consumers for various decades about the role fossil fuels play in global warming and climate change. The suit is similar to the New York suit however, in this case, consumers have also been added. The New York case dealt with the shareholders only. The case includes consumer fraud allegations and alleged that the company failed to disclose information that would have allowed the consumers to make a rational choice of purchasing Exxon Mobil products. The Exxon Mobil tried to shift the jurisdiction of the case. However, in March 2020 the U.S. district judge ordered that litigation should be carried out in Suffolk County Superior Court, where Massachusetts AG sued the company. The case is still pending before the court and it would be interesting to see if Exxon Mobil gets relief in this case which involves a consumer and investor fraud lawsuit.
Connecticut
Various climate lawsuits are being filled by various states against not only Exxon Mobil but other oil and gas industries as well. However, the Connecticut lawsuit has only named Exxon Mobil in the suit. The AG said that they have enough evidence to show that Exxon knew that climate change was occurring but they deliberately decided to deceive or mislead people over the years. The lawsuit stated that the activities of Exxon Mobil had a very catastrophic effect on Connecticut. These negative effects had an impact on sea level, floods, drought, increase in the temperature and severe storms, decrease in air quality, contamination of drinking water, increase in the spread of diseases, and severe economic consequences. The lawsuit seeks money for defending against climate change, civil penalties, and disclosure of all climate research. It also demands the creation of a climate change fund and an end to the false and misleading information from the Exxon Mobil side. Connecticut is suing Exxon Mobil under the Connecticut Unfair Trade Practices Act, the law that the state used to make a similar successful claim against the tobacco industry.
Delaware
The Delaware lawsuit lists 31 fossil fuels entities and trade groups. The suit is against negligent failure to warn, trespass, public nuisance, and multiple violations of Delaware’s Consumer Fraud Act. it seeks monetary damages to compensate the state. This includes 10000 dollars per violation of the Consumer Fraud Act. The lawsuit states that the companies misled consumers through their advertising campaigns.
Charleston
The Charleston lawsuit seeks to hold more than 24 major oil and pipeline companies responsible for climate change damages to the city. The lawsuit states that the false information about the products has caused disastrous flooding in the city. Charleston is South Carolina’s largest city. The lawsuit seeks action against public and private nuisance, strict liability and negligent failure to warn, trespass, and violation of South Carolina’s Unfair Trade Practices Act. The flooding incidents have increased in Charleston. There is an increase of more than 20% in flooding incidents in recent years when compared to incidents 50 years back.
Others
The city of Hoboken also filed a lawsuit against multiple oil companies which included Exxon Mobil. The lawsuit is based on a similar base of providing wrong information about climate change to the people. The Minnesota AG also sued three major oil companies in the US stating that they have deceived consumers over the effects of climate change. The lawsuit is filed on claims that include violation of Minnesota laws like fraud, deceptive trade practices, and false statements in advertising.
There are close to 20 cities that are seeking to hold fossil fuel companies liable for damages as a result of increased flooding, droughts, an increase in sea level, and stronger hurricanes. These cities include Baltimore, San Francisco, Washington DC, and Oakland.
Conclusion
The oil companies have started to feel the heat of the situation with a quick rise in climate change litigation in the world. Fossil fuels are considered as a major reason for climate change and global warming. Big companies like Exxon Mobil may have tried to disrupt the information relating to climate change as they would have suffered a loss due to various regulations. The oil companies are facing the threat of being sued on various grounds. They are being seen as the cause of various natural disasters like floods, droughts, etc.
The companies need to show enough evidence that they have followed the regulations and have disclosed all correct information to the consumer as well as the shareholders. The rise in climate change litigation is a good sign for the world. It shows that people and the government have become serious about the consequences of global warming and climate change. The litigations would enable the companies to get more serious and thus would help the world in the long run. The companies involved in the use of fossil fuels have to realise that profit in the short run is not a good option. They need to think about the future and take steps that are environmentally friendly.
References
- https://www.reuters.com/article/us-exxon-mobil-lawsuit-massachusetts/massachusetts-accuses-exxon-in-lawsuit-of-climate-change-deceit-idUSKBN1X32GA#:~:text=The%20lawsuit%20in%20Suffolk%20County,play%20in%20causing%20climate%20change.
- https://www.bloomberg.com/news/articles/2020-03-17/massachusetts-can-keep-exxon-suit-in-state-court-judge-says
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