The first week of the New York attorney general’s trial against ExxonMobil over its application of a proxy cost of carbon didn’t get off to a great start. The attorney general’s office found itself getting admonished by New York Supreme Court Justice Barry Ostrager for wasting the court’s time, and the week concluded with Justice Ostrager threatening to end the attorney general’s case early.

Nearly four years after the investigation was first announced, the attorney general’s office has tried multiple legal arguments, sifted through millions of pages of ExxonMobil’s documents, and in order to save face, brought a lawsuit against the company inquiring about its accounting practices. As Bloomberg’s Erik Larson explained “what was originally advertised as a frontal assault on Big Oil for fueling the planetary climate crisis has—over the years—been transformed into the kind of hair-hurting corporate accounting lawsuit more common to the courthouses just a few subway stops north of Wall Street.”

Here’s what you need to know as we head into week two of New York Attorney General’s trial against ExxonMobil over its application of a proxy cost on carbon.

Trial Kickoff

The week kicked off with scathing criticisms of the lawsuit from the Wall Street Journal and New York Post editorial boards, among others:

“The only reason New York has any chance to win this case is because it is using the Martin Act, the notorious New York statute that doesn’t require proof of fraudulent intent. The AG also doesn’t need to prove that an actual investor was deceived, only that a “reasonable investor” might have been deceived.” – Wall Street Journal

“And the case that now-AG Letitia James takes to trial Tuesday is a huge comedown from even that claim, charging that Exxon fraudulently used two sets of books to state the risks. The company says it merely releases different estimates for different purposes, with full disclosure. The charge is not only a far cry from the original #ExxonKnew allegations, it’s also almost certain to fail…In fact, the entire thing has been a shameless exercise in prosecutorial abuse, from the outrageous harassment of nonprofits whose research the climate-crisis crew dislikes to the ethically dubious private funding of staff in the New York AG’s Office.” – New York Post

During opening statements, the New York attorney general’s office stumbled over their words, prompting the court reporter to repeatedly ask them to repeat themselves, while ExxonMobil’s counsel delivered a compelling opening statement, explaining the political motives of the lawsuit. He explained how this coordinated campaign that began with the 2012 conference in La Jolla, Calif. and continued at the infamous 2016 Rockefeller Family Fund meeting, and endures today through a series of activist attorneys and organizations with the help of deep-pocketed funders.

Questioning the Witnesses:

On Tuesday the prosecution called their first two witnesses: Natasha Lamb of activist shareholder Arjuna Capital, and Michael Garland of the New York City Comptroller’s office.

During ExxonMobil counsel Justin Anderson’s cross examination of Lamb, she admitted that Arjuna Capital, which has submitted numerous climate-related shareholder resolutions to ExxonMobil, doesn’t actually hold any ExxonMobil stock. Further, Lamb revealed under questioning that the organization failed to consult with the two of its clients who hold ExxonMobil stock when submitting their shareholder proposals to the company. One of these clients is the co-owner of Arjuna and only holds stock so that he can submit shareholder proposals, while the other is invested solely for tax purposes.

These revelations are extremely significant. The New York attorney general had called Lamb to speak to whether ExxonMobil had harmed investors – the central tenant of this lawsuit. Lamb’s testimony not only undermined this argument, but effectively disqualified herself as a legitimate witness for this claim.

Garland’s cross examination didn’t go much better, as he admitted under questioning that he never actually read the ExxonMobil climate report that was produced in response to the shareholder proposal filed by his office.

Together, Lamb and Garland revealed that the climate-related shareholder requests filed by their teams are little more than political ploys and not driven by a genuine desire to understand how ExxonMobil plans for the future.

A Week Ending in Shambles:

Throughout the trial, the judge was forced to step in and assist the attorney general’s office, helping them re-focus their questions, while also questioning their decision to waste time by reading articles into the record and circling back to already-answered questions. Here are some of our favorite quotes from Friday’s hearing:

THE COURT: Mr. Zweig, before we go through anymore of this agonizing repetitious questioning about the documents that are not being disputed, the chronology of which are not in dispute, what is it exactly that you are trying to elicit from this witness?

THE COURT: …there are certain documents that I’ve seen fourteen times. I don’t need to see them again.

In a stunning turn of events Friday afternoon, the New York attorney general’s office failed to have their next witness available in the courtroom after ExxonMobil finished its cross examination, leaving a significant amount of time left in the schedule. After warning them earlier in the week against doing this, Ostrager threatened to make them rest their case the next time they failed to produce another witness when left with additional time.

WALLACE: Meaning I will rest my entire case if I do not have another witness lined up?

THE COURT: If you don’t not have a witness available at the conclusion of a witness’s testimony, you rest. It is your obligation to coordinate and see to it that we’re occupied from 9:30 to 4:30, excluding lunch breaks and morning and afternoon breaks.

WALLACE: I’m stunned, because ExxonMobil can now get us to rest by simply not questioning someone for an hour and a half and that is what we understood was going to happen.

THE COURT: Look, I’ve been doing this for 40-plus years, and you have a contingency plan. You don’t know when opposing counsel is going to elect not to cross-examine the witness because it is entirely possible that the testimony you adduce from a witness that you call requires no cross-examination because it is of no relevance to the case.

WALLACE: Your Honor –

THE COURT: We’re not disputing anything. You want to go home, it is fine. I’m just telling you what the rules are, and the same rules apply to Exxon. If they don’t have a witness on their case ready to go after their witness concludes, they rest.

The attorney generals’ office was “stunned,” while court reporters said, “That is not normal. Not normal.”

No surprise the activist spin cycle was in full force. Karen Savage – of the Richard Wiles and Kert Davies-run-Climate Liability Newsattempted to allege that ExxonMobil was trying to sabotage the attorney general’s office by spending limited time cross examining the witnesses. The reality? The attorney general’s office was unprepared for the trial. The repetitive, stumbling performance and failure to have a contingency plan in place tested Justice Ostrager’s patience and threatened the attorney general’s case.