Published: Wed, December 11, 2019
Global News | By Blake Casey

Exxon Wins New York Climate Change Fraud Case

Exxon Wins New York Climate Change Fraud Case

In his decision (pdf), Judge Barry R. Ostrager wrote that "the Office of the Attorney General failed to prove, by a preponderance of the evidence, that ExxonMobil made any material misstatements or omissions about its practices and procedures that misled any reasonable investor".

"What the evidence at trial revealed is that Exxon Mobil executives and employees were uniformly committed to rigorously discharging their duties in the most comprehensive and meticulous manner possible", the judge wrote. She did not say whether she would appeal.

Exxon said in a statement that the ruling affirmed that the company gave its investors "accurate information on the risks of climate change" and that ny "failed to make a case even with the extremely low threshold of the Martin Act in its favor".

A Statement form ExxonMobil said that "The New York Attorney General's allegations are false".

"Lawsuits that waste millions of dollars of taxpayer money do nothing to advance meaningful actions that reduce the risks of climate change", Exxon spokesman Casey Norton said in the statement.

"The oil giant never took seriously the severe economic impact that climate change regulations would have on the company, contrary to what they were telling the public".

The New York Lawyer Common filed swimsuit towards the oil big in 2018 alleging that the Texas-based firm deceived the general public and traders for years by utilizing two units of books to account for the rising prices of environmental rules around the globe - and the unfavourable impression it will have on the corporate's price.

The judge was particularly harsh toward the state's expert witnesses including Eli Bartov, a New York University accounting professor who also works for plaintiff lawyers in securities fraud cases and charged the state some $500,000 at $1,050 an hour for "rambling" testimony.

"The office of the Attorney General produced no testimony from any investor who claimed to have been misled by any disclosure, even though the Office of the Attorney General had previously represented it would call such individuals as trial witnesses", he added.

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Exxon "disclosed its use of both the proxy cost and the greenhouse gas metrics no later than 2014", Ostrager wrote in his decision.

It also said the company told investors it was projecting the impact of future regulations by using a "proxy cost" of up to $80 per ton of carbon emissions in wealthy countries by 2040, but internally used figures as low as $40 per ton or none at all.

After the AG's retreat, what remained for Ostrager to decide was whether Exxon had violated New York's Martin Act by issuing public statements about proxy costs that were materially misleading - a far easier task because the law doesn't require proof of intent or that investors actually relied on the misstatements.

"Nothing in this opinion is meant to absolve Exxon Mobil from responsibility for contributing to climate change through the emission of greenhouse gases", he said.

Ostrager further wrote that Exxon Mobil public reports cited by NY were not misleading to investors.

"Exxon Mobil does not dispute either that its operations produce greenhouse gases or that greenhouse gases contribute to climate change", Justice Ostrager said.

NY had argued that damages could amount to as much as $1.6 billion for investors.

He said Exxon Mobil's system for gauging climate risks and costs that was "as robust as we could make it at the time, and continued to try to improve it". "It was obvious at trial that the AG's office was trying to impose liability on ExxonMobil for its viewpoints and for taking positions in policy debates with which it disagreed".

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