In a loss for ExxonMobil, the New York State Supreme Court has ordered the oil giant and its accounting firm to produce documents subpoenaed in a highly charged investigation of whether the company concealed from investors and the public what it knew about climate change as long as four decades ago.
The New York State Attorney General Eric Schneiderman, who issued a subpoena in August, sought on Oct. 14 to force PricewaterhouseCoopers to provide the documents after ExxonMobil said it would not permit PwC to provide certain documents based on a Texas statute that Exxon said provided “accountant-client privilege.”
The New York Court ruled that Exxon’s interpretation of the Texas statute was “flawed,” and said the Texas statute does not preclude PwC from producing the documents requested by the New York attorney general’s office. The court also stated that New York law, rather than Texas law, governed the dispute.
“We are pleased with the Court’s order and look forward to moving full-steam ahead with our fraud investigation of Exxon,” Schneiderman said in a statement. “Exxon had no legal basis to interfere with PwC’s production, and I hope that today’s order serves as a wake up call to Exxon that the best thing they can do is cooperate with, rather than resist, our investigation.”
ExxonMobil, however, said it would challenge the order. “We respectfully disagree with the court’s ruling and intend to take an immediate appeal,” said ExxonMobil spokesman Alan T. Jeffers in an email. The company could appeal to the New York state appellant division and later to the Circuit Court of Appeals in New York.
The legal maneuvering is the latest round in a dispute over whether ExxonMobil knew decades ago that climate change was a real threat and whether it improperly concealed that information from investors and the public. That could be a violation of the Martin Act, which gives the New York attorney general broad power to pursue fraud cases. Schneiderman and other attorneys general, in an unusual step, held a press conference in March vowing to work together to combat climate change, including through the investigation of ExxonMobil.
Exxon has asserted that it did not conceal material information and accused the attorneys general of having a political agenda. The company said the subpoenas alone would chill companies’ internal research and free speech.
ExxonMobil has produced more than a million pages of documents, but it has also asked a Texas federal court to issue a preliminary injunction blocking the need for the company to comply with similar subpoenas issued by Massachusetts Attorney General Maura Healey. U.S. District Court Judge Ed Kinkeade of Texas did not grant the injunction, but on Oct. 13 he issued a discovery order for ExxonMobil to examine Healey’s internal documents and records to determine whether she acted in “bad faith” in issuing her subpoena. ExxonMobil later asked the judge to add Schneiderman’s name to the order.
Healey has asked the court to vacate its order and dismiss Exxon’s suit.