A very interesting trial began today in the New York State Supreme Court in lower Manhattan.
Before it started, a long line of journalists snaked around the rotunda on the second floor, all hoping for a ringside seat as lawyers from the NY Attorney General’s office faced off against ExxonMobil.
Exxon is one of the world’s largest and most powerful oil and gas corporations.
Like other fossil fuel companies, it has long been accused of understanding, decades ago, what its product would do to the planet but continuing to expand and profit anyway, and all the while questioning the science of global warming.
It is against that backdrop that after four years of investigation and multiple attempts to stop it happening, the company finds itself on trial in New York for misleading investors about climate change.
The case is being brought by New York State’s attorney general, who is accusing the company of telling investors that it had priced in the risks posed by increasing regulations to combat climate change, while not actually doing anything of the sort.
Effectively New York State is saying that Exxon cooked its books, in order to artificially boost the value of the company, and make it cheaper to pollute.
In reality this is an extremely dry, technical, securities fraud case, with plenty of tedious points already made in the opening arguments about whether terms like ‘proxy cost’ and ‘GHG cost’ were being used interchangeably and whether that indicated an intentional attempt to mislead investors.
At times even the court stenographers struggled to keep up with the government’s lawyer as he rattled off complicated language, frequently asking him to slow down and repeat himself.
Exxon’s lead lawyer denied all wrongdoing and accused New York State of a politically motivated witch hunt, at one point even suggesting that government lawyers were being guided by shadowy anti-oil activists like the Rockefeller Foundation.
This was, he declared, with a flair and clarity that had eluded his government counterpart, a “ridiculous” case, full of “outrageous” assertions.
“This is like no other securities fraud case in the history of the country,” he said, dismissing the accusations against his company as nothing more than “arguments about cash flow projection sheets to analyse unfunded projects” that had no material effect on the value of Exxon.
But despite his assured expensive-trial-lawyer performance, he knew, and the packed courtroom knew, that this case has potential ramifications well beyond the narrow scope of the trial.
Some are comparing it to the beginning of the legal onslaught that changed the face of big tobacco in the 80s and 90s.
And it is true that money, power and politics are all under scrutiny here.
Even Rex Tillerson, former CEO of Exxon and former Secretary of State to Donald Trump is expected to testify.
It will be fascinating to hear him defend his decisions and behaviour under oath on the stand, knowing that if the state of New York is successful, Exxon could pay over a billion dollars in damages and suffer untold damage to its reputation.
Such an outcome would also be a shot across the bows of the rest of the fossil fuel industry – a warning that in the absence of congressional or federal progress in combating the companies that have driven climate change to this perilous moment, state lawyers are prepared to use the legal system to come after them.
The trial is expected to last for three weeks.
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