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SIGNS NEW YORK ISN’T FEELING GREAT ABOUT ITS CASE AGAINST EXXON: New York surprisingly dropped some of its main claims against ExxonMobil at the close of the three-week long closely watched climate change fraud trial on Thursday, suggesting the state isn’t feeling so great about its case.
Jonathan Zweig, New York’s assistant attorney general, provoked confusion from New York Supreme Court Justice Barry R. Ostrager when he said during his closing statement that the state would no longer be claiming Exxon knowingly and willfully misled investors on how it accounts for the financial risks of climate change.
“I’m sorry?” Ostrager said during closing arguments, when he realized New York was dropping the two counts. “If you’re not advancing it at this time, does that mean it’s out of the case?”
Zweig said yes, adding he’s “sorry if I worded that in a confusing way.”
Instead of claiming common-law fraud, New York is going all in on using the Martin Act to make its case, a powerful broad state law that does not require proof of intent of shareholder fraud.
“The Martin Act’s broad sweep just allows the New York Attorney General to continue this case with a straight face, given how it does not demand a showing of fraudulent intent,” said James Fanto, a securities law professor at Brooklyn Law School. “This is a politically motivated case designed to harass a large oil company and to obtain whatever political benefits that bringing such a case carries in New York for the New York Attorney General. The dropping of the charges supports my view.”
Supporters of Exxon’s case, the first of several climate-related lawsuits to go to trial, also interpreted New York’s last-minute change in strategy as a concession.
“This decision not only reveals the State’s fear that their case lacks sufficient evidence, but highlights the dangerous politicization and abuse enabled by the only-in-NY Martin Act,” said Tom Stebbins, executive director of Lawsuit Reform Alliance of New York.
Not so fast, Exxon’s lawyer says: The oil major’s attorney, Ted Wells Jr., maybe sensing the state’s hesitation, said he actually wants the court to rule on the two common-law fraud claims New York is dropping.
“Your honor, we did not come to this trial and try this case for two weeks to have them stand up after the evidence has been presented and after I have given my summation and stand up and say we are not pressing the two claims that have caused in many respects the most severe reputational harm to the company and to the executives,” Wells said.
Wells went back and forth with Ostrager, who seemed more than willing to let New York drop the two common-law fraud counts without issue.
Wells also argued that a failure to rule on all of New York’s claims could embolden the “copycat cases” against oil companies, citing in particular a similar lawsuit filed in Massachusetts.
The New York strategy: New York’s lawsuit always took a different tack than other climate suits filed by cities and localities since 2017.
New York alleges that Exxon underrepresented the potential future costs to its business of climate regulations, deceiving investors about their true financial exposure.
“Exxon never told its investors that it was ripping up its GHG proxy cost insurance policy just when those costs were most significant,” Zweig said in closing arguments.
“The bottom line is this,” he later added. “Every single piece of testimony in this case from people who weren’t Exxon insiders shows that the investors were misled.”
Most of the other lawsuits against oil companies make public nuisance claims under state law, seeking compensation for the costs of adapting to droughts, wildfires, severe storms, and other effects of climate change.
The exception is Massachusetts, which sued last month alleging Exxon has mislead investors and consumers — both about the risks the company faces from the transition to a low-carbon economy and about the actions the company is taking to clean up its portfolio.
Fanto said it’s hard to draw conclusions about how the eventual decision in New York’s Exxon case links to the other cases, given the uniqueness of the state’s Martin law.
Ostrager, who will rule on the case without a jury, is expected to issue a decision within 40 days.
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KEY INDUSTRY TRADE GROUP GETS SHUNNED AGAIN: A second oil and gas major is shunning the American Fuel & Petrochemical Manufacturers because of its climate change position.
French oil and gas company Total is leaving the trade group in 2020, joining Anglo-Dutch giant Shell, which ditched the group earlier this year.
Total cited being “not aligned” with AFPM over the trade group’s views on the Paris climate agreement, carbon pricing, and renewable energy development. AFPM focuses narrowly on oil and gas refining interests.
“We always strive to reach consensus positions on policies that are in the best interest of the fuels and petrochemical industries and the communities and consumers that rely on us,” Chet Thompson, AFPM president and CEO, said in a statement to Josh.
API put on notice again. Total also challenged the larger oil and gas industry trade group American Petroleum Institute over its climate positions. Total will stay in API for now, but warned “API’s recent support for the rollback of U.S. regulations on methane emissions raises questions.” Total also referenced API’s opposition to carbon pricing. Shell took a similar stand against API while remaining in the group.
These steps are important because oil and gas and business trade groups such as the Chamber of Commerce, with powerful lobbying sway on Capitol Hill, tend to be more conservative than individual members on policies related to climate change. Further member losses could force trade groups to reevaluate their positions.
BROUILLETTE BREEZING TO CONFIRMATION: President Trump officially nominated Dan Brouillette Thursday to replace Rick Perry atop the Energy Department, and Senate Republicans want to move quickly on confirming him.
Energy Committee Republicans moved quickly to schedule a confirmation hearing for Brouillette on Thursday, Nov. 14 — before Perry’s last day on Dec. 1.
Brouillette, 57, is currently the deputy energy secretary, working as Perry’s second in command on behalf of the Trump administration’s “energy dominance” agenda, which focuses mostly on exporting coal and natural gas. The Senate easily confirmed him to his deputy role by a 79-17 vote.
“If confirmed, I will further Secretary Perry’s legacy of promoting energy independence, innovation, and security for the American people,” Brouillette said in a statement Thursday.
BLOOMBERG’S CLIMATE CARD: If Michael Bloomberg actually proceeds with a presidential run, the Democratic primary would get not just another advocate for curbing climate change. Bloomberg has bankrolled perhaps the most effective campaign to cut carbon pollution in the U.S., giving more than $100 million to Sierra Club’s “Beyond Coal” project since his first donation in 2011.
That campaign has helped retire more than half of the nation’s coal plants, 298 out of 530, according to Beyond Coal’s latest count.
If you remember: Earlier this year, when Bloomberg pledged to not run for president, the billionaire former New York City mayor said his money would be better spent on a new expanded campaign to finish killing coal and start wounding oil and gas.
Bloomberg gave $500 million to “Beyond Carbon” in June.
At the time, Bloomberg said he wanted Beyond Carbon to bypass the federal policy arena and work with environmental groups to enact 100% clean energy laws at the state and local level, and to help elect state and local candidates “who are climate champions.”
It looks like the state and local focus may not have been enough for Bloomberg.
REPUBLICANS ROCK WEATHER CHANNEL CLIMATE CONVO: Democrats offered few new details to their climate agendas at a Weather Channel primetime special, but longshot Republicans primarying Trump brought some heat.
“Climate change is our existential threat,” said former Illinois congressman Joe Walsh, linking its potential costs to the ballooning national debt.
Republicans, sounding very much like Democrats, also took shots at Trump, urging him to get real on climate or risk losing young voters, and warning that rising sea levels, stronger storms, and worsening drought will harm agriculture and national security.
“If there is going to be one issue that will compel young people to become permanently involved [in politics] it’s climate change,” Walsh said.
Former South Carolina congressman Mark Sanford said he worried about losing “the farm I grew up on” to climate change.
Added former Massachusetts governor Bill Weld: “The American people are not going to sit still for the disappearance of Bessy the cow.”
The Weather Channel special, which Josh watched instead of NBA on TNT, featured a series of taped interviews spliced into news segments and video footage of candidates touring the damage from climate change-related events, such as flooding rains from hurricanes in North Carolina to wildfires in California.
“People say, Bernie, our proposal is expensive,” said Bernie Sanders of his $16.3 trillion climate plan during a walk through the aftermath of Camp Fire in Paradise, California. “Dealing with the climate crisis just today is expensive.”
EPA VERSUS INSPECTOR GENERAL FIGHT GETS UGLY: Top Environmental Protection Agency officials are seeking to handcuff the agency’s independent watchdog, the EPA’s acting inspector general said in a memo Thursday.
Agency general counsel Matt Leopold is gravely misrepresenting what EPA officials must do to comply with the inspector general office’s requests, to the point where he offers “free rein” for agency staff to refuse to provide information, acting Inspector General Charles Sheehan wrote.
Sheehan doesn’t mince words in his memo, which is the latest in an emerging battle between the inspector general and EPA political officials. The watchdog office is looking into chief of staff Ryan Jackson, accusing him of stonewalling two probes and refusing to hand over information.
And in yet another wrinkle, the EPA inspector general is also investigating whether Jackson has destroyed politically sensitive internal documents, Politico reported late Thursday.
SENATE CLIMATE CAUCUS COURTS BILL GATES: The billionaire Microsoft founder may not be ready yet to chat wealth tax with Elizabeth Warren, but he does think “avoiding a climate disaster” doesn’t get talked about enough.
Maybe that’s why Gates, during a visit to Capitol Hill on Thursday, found himself meeting with the co-founders of the new bipartisan Senate climate caucus — Delaware Democrat Chris Coons and Indiana Republican Mike Braun. The three talked technology investments and how agriculture and reforestation can help cut emissions, according to a release from Coons’ office.
The Rundown
Wall Street Journal Justice Department issues civil subpoenas to auto makers in California emissions pact probe
New York Times Trump administration makes it easier to dredge protected areas to restore beaches
Axios Once a critic, Chamber of Commerce now backs Paris Climate Agreement
Washington Post Commerce Department aides knew Alabama hurricane forecasters were not responding to Trump, but still rebuked them
Reuters A ‘green interest rate?’ Fed digs into climate change economics
Calendar
WEDNESDAY | NOVEMBER 13
10 a.m. 406 Dirksen. The Senate Environment and Public Works Committee will hold a hearing entitled “Preserving and Expanding Clean, Reliable Nuclear Power: U.S. Commercial Nuclear Reactor Performance Trends and Safety Initiatives.”
10 a.m. 2318 Rayburn. The House Committee on Science, Space, and Technology will hold a hearing entitled “Strengthening Transparency or Silencing Science? The Future of Science in EPA Rulemaking.”
2 p.m. 1324 Longworth. The House Natural Resources Committee Subcommittee on National Parks, Forests, and Public Lands holds an oversight hearing entitled “Roads to Ruin: Examining the Impacts of Removing National Forest Roadless Protections.”
THURSDAY | NOVEMBER 14
9 a.m. to 4:30 p.m. 1601 K Street, NW. K&L Gates, the Energy Storage Association, and the Edison Electric Institute host this year’s third annual Energy Storage Conference.
10 a.m. 366 Dirksen. The Energy and Natural Resources Committee holds a hearing to consider the nomination of Dan Brouillette to be Secretary of Energy.
