The judge who oversaw the New York Attorney General’s (NYAG) fraud case against ExxonMobil is allowing for discussions to proceed about whether or not the court should rule on all original counts after two charges were abruptly dropped at the close of trial. The NYAG’s office surprised many when it decided to no longer prosecute two of the more egregious charges against the company right before diving into closing statements earlier this month.

ExxonMobil’s legal team took issue with the 11th hour changes, which emerged after the attorney general failed to provide convincing evidence, and filed a post-trial motion objecting to the NYAG’s request to discontinue its fraud counts.

Recall that on the last day of the trial the NYAG abruptly admitted to the court that it intended to drop its common law fraud and equitable fraud claims. In response, ExxonMobil lawyer Ted Wells argued that such a maneuver should not be allowed, asserting that it was “a very serious issue” and he was going to “go to the library” to see if he could find any legal precedent that pushed back on the NYAG’s retreat on its fraud claims. According to a separate document also filed last Monday, it would seem that Mr. Wells did.

In the filing, ExxonMobil argued that the NYAG “directly and repeatedly impugned the corporate reputation of ExxonMobil and the personal reputations of its employees… NYAG cannot now erase these past four years because its fraud theory was completely debunked at trial.” (emphasis added)

ExxonMobil also filed a Post-Trial Memorandum of Law, which described how the NYAG failed to identify even a single investor who claimed to be deceived by the company’s disclosures on how it factors climate change into its business operations.

The memo argued that the NYAG should concede that ExxonMobil did not violate the Martin Act – the powerful law the NYAG is pursuing its remaining charges under. Such a violation would require evidence of a material misstatement, and the NYAG failed to provide any evidence during trial to support this claim.

“After three weeks [of trial], the record is as barren as it was on the first day of trial when NYAG delivered its opening statement and laid out its theory.” (emphasis added)

In the filing, ExxonMobil said that none of the witnesses provided by the NYAG testified to investing in ExxonMobil stock or reading the company’s Managing the Risks or Energy and Climate reports, two of the key disclosures at issue. The NYAG also failed to offer evidence of any instance in which ExxonMobil factored a greenhouse gas cost of carbon into capital investment decision projections impacted ExxonMobil’s income statement, balance sheet or other financial disclosures.

“The record is clear. Not a single investor claimed to have invested in ExxonMobil stock consistent with NYAG’s theory. Even though ExxonMobil has over four billion shares outstanding and millions of shareholders, NYAG did not offer testimony from any investor in ExxonMobil stock, let alone one who claimed GHG cost disclosures purportedly affected his or her investment decisions.” (emphasis added)

ExxonMobil called on Justice Barry Ostrager to render an opinion on the NYAG’s fraud charges. Specifically, the company asked Justice Ostrager to both “dismiss with prejudice NYAG’s common law and equitable fraud claims, and acknowledge that the evidence did not show the requisite intent or reliance elements for fraud.”

After a four year investigation, and 11 days in the courtroom during trial, it is evident that the initial perceived fraud is nonexistent. ExxonMobil is now asking the Court to recognize this and not to let other state attorneys general or public officials launch copycat lawsuits that are based on clearly false, politically-motivated and unsubstantiated claims.

Justice Ostrager has ordered the NYAG to respond to ExxonMobil’s motion and both parties are to appear for oral arguments on this matter on December 6th. Justice Ostrager’s verdict in the case is expected by December 18th.