On Friday, Massachusetts Attorney General Maura Healey filed an amended complaint in her lawsuit against ExxonMobil for allegedly deceiving Massachusetts investors and consumers about climate change-related risks. Most notably, the attorney general dropped one of the two claims of investor deception, which was largely copied and pasted from the New York attorney general’s securities fraud lawsuit – a lawsuit that failed after a less than three-week long trial in November 2019.

In the amended complaint, the Massachusetts attorney general included additional allegations, connecting one to the current COVID-19 outbreak as an example of how the company isn’t accounting for “expected changes to fossil fuel demand” such as climate change, and is therefore misleading investors.

“The coronavirus pandemic also illustrates how, as ExxonMobil has long known, changes in expected global fossil fuel demand … can imperil the economic value of the fossil fuel industry, and of ExxonMobil itself, to the detriment of ExxonMobil investors.”

In the face of bringing a weak case forward, it seems that Attorney General Healey is attempting to tie outlandish legal claims to current events in order to drum up media attention.

The Dropped Claim

In its original pleading, filed (likely not by coincidence) on the third day of the trial between the New York attorney general and ExxonMobil in October 2019, the Massachusetts attorney general asserted four claims against the company, split evenly between investor and consumer deception. With respect to the two investor-related claims:

  1. The first alleged ExxonMobil misrepresented and failed to disclose material facts regarding systemic climate change risks to Massachusetts investors.
  2. The second, using language largely copied and pasted from the New York attorney general’s lawsuit against the company, accused ExxonMobil of specifically misrepresenting its efforts to incorporate climate risk into its business planning through its use of a proxy cost.

In the amended complaint filed on June 5th, Healey’s office dropped the second claim, and instead repurposed its underlying subject – ExxonMobil’s use of a proxy cost of carbon – to support the remaining count of investor deception.

After the proxy cost argument was rebuffed by a New York Supreme Court Justice in December, the Massachusetts attorney general’s office reworked its allegations. Instead of claiming that ExxonMobil’s use of proxy costs itself was at issue, Healey is now claiming that it was the company’s “inconsistent and haphazard” application of proxy costs that was misleading:

“Through recent disclosures in litigation in New York state court, including trial testimony by current and former Company managers and executives, it has become apparent that ExxonMobil’s repeated assurances to investors in this regard were—as with its misrepresentations about climate change risks more broadly—highly misleading. ExxonMobil did not, in fact, apply the proxy cost of carbon internally in the amounts or manner it represented, and in some cases did not apply it at all.”

As Healey is still, for the most part, relying on the same documents and potential witnesses produced through the failed New York case, the latest assertation remains at odds with New York Supreme Court Justice Barry Ostrager’s final ruling:

“What the evidence at trial revealed is that ExxonMobil executives and employees were uniformly committed to rigorously discharging their duties in the most comprehensive and meticulous manner possible…The testimony of these witnesses demonstrated that ExxonMobil has a culture of disciplined analysis, planning, accounting, and reporting.” (emphasis added)

Read the (Media) Room

In addition to readjusting her proxy cost allegations, the attorney general has sprinkled in a variety of recent developments to support her remaining investor fraud claim – and no doubt drum up media attention – including the economic decline caused by the COVID-19 pandemic:

“[The] calamitous consequences of the coronavirus pandemic are a harbinger of the types of systemic risks posed by climate change, demonstrating the sweeping and interconnected nature of climate-driven dangers and disruptions.”

While Healey’s office is largely focused on the demand shock that resulted from a once-in-a-generation global pandemic, her office is omitting the important role that the oil and gas industry has played in the recovery and response.

The oil and gas industry, from the start, has generally been deemed “essential” by governments and has been mostly exempt from lockdown measures, as companies produce the energy and materials needed to face this crisis.

For example, ExxonMobil is producing more isopropyl alcohol — a key ingredient in many disinfectant and sanitizer products — than any other company in the country. The company has also increased its production of specialized materials used to make much-needed N-95 masks and medical gowns, both of which are considered essential to protect the safety and health of frontline workers confronting the pandemic head-on.

Inserting mentions of the COVID-19 pandemic that has ravaged families and economies around the world seems out of place in a lawsuit about violations of the state’s consumer and investor protection law.

A Broader Agenda

The amended complaint comes on the heels of a call from Healey to investigate “the future of the natural gas industry” in Massachusetts. Though she has denied from the beginning that her lawsuit is not aimed at preventing the production or sale of fossil fuels, this recent development shines a light on what the true intentions may be.

To recap – the New York attorney general dropped two of its four fraud claims against ExxonMobil at the eleventh hour during its trial last year, and the other two were ultimately rejected by a New York Supreme Court Justice. After appearing to have based several initial claims off of the failed New York trial, the Massachusetts attorney general has narrowed its investor fraud claims down from two to one, while simultaneously calling for a ban on fossil fuel use in the state.

When will these attorneys general quit subtracting and stop pursuing these baseless claims altogether?