Today’s decision in New York v. Exxon held that, in its public statements from 2014 to 2016 on how it priced carbon risk in making investment decisions (known as “proxy costs”), Exxon did not make “any material misstatements or omissions about its practices and procedures that misled any reasonable investor.”
That’s it. There was no reference regarding what Exxon has been saying about climate since 2016, and nothing about what Exxon knew about climate disruption and failed to disclose–or knew and affirmatively lied about–for the previous 60 years.
But you would not be able to glean this from a cursory glance at the depressingly predictable reaction to the decision. Exxon “won,” so the fossil fuel spin factory is in a giddy tizzy about how this shows that Exxon tells the truth about climate. According to this narrative, anyone who claims otherwise is either a fool, part of the radical climate mob who wants to destroy Western civilization, or a greed-crazed trial lawyer trying to cash in with one of the climate nuisance cases, which feature prominently in those commentaries. If New York had won, it would have been no better, but the spin factory would sound more like: “Exxon has always lied about climate.”
In truth, both of these reactions are reductive and misleading. Lawyers on both sides of the climate nuisance cases know that this decision does not have the least relevance to any of those claims. Therefore we will note it in passing, and go back to dealing with the actual issues in front of us. (Full disclosure: I am one of the lawyers representing Boulder County, San Miguel County and the City of Boulder (pro bono) in one such case, Boulder v. Suncor.)
As Judge Ostrager pointed out:
Nothing in this opinion is intended to absolve ExxonMobil from responsibility for contributing to climate change through the emission of greenhouse gases in the production of its fossil fuel products. ExxonMobil does not dispute either that its operations produce greenhouse gases or that greenhouse gases contribute to climate change. But ExxonMobil is in the business of producing energy, and this is a securities fraud case, not a climate change case.
That is not to say that the decision has no relevance to any other cases out there. The Massachusetts Attorney General has sued Exxon for a range of climate-related behavior, and one of the claims in that case is that those same Exxon statements about carbon proxy costs between 2014 and 2016 misled Massachusetts investors. You can bet that the AG’s office would have had people in the New York courtroom, and will be going through today’s decision with the finest of fine-toothed combs. It will be interesting to see whether they continue to assert that claim. Meanwhile, the climate nuisance cases will continue wending their way through the judicial system (e.g., the Fourth Circuit hears argument on the appeal of the remand order in Baltimore v. B.P. on Thursday) and we look forward to when our clients get their day in court.