A NY judge sided with Exxon Mobil Tuesday in a closely-watched environmental case, concluding the oil giant did not mislead investors in its climate change disclosures. She did not say whether she would appeal.
"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", Judge Barry Ostrager of Manhattan Supreme Court said.
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".
"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 Democrat said in a statement.
Exxon Mobil Corp. hailed the ruling in a trial that it said stemmed from a "baseless investigation".
Phil Goldberg, special counsel for the Manufacturers' Accountability Project, a project of the National Association of Manufacturers that has advocated on behalf of fossil companies in climate liability suits, said it was obvious at trial that the AG's office was trying to impose liability on ExxonMobil for its political viewpoint.
NY initially claimed that former Exxon chief executive officer Rex Tillerson had spearheaded the scheme to dupe investors and that the plan was readily adopted by his underlings. New York's case accused the company of misrepresenting these costs, with AG James arguing that the company used one set of numbers publicly, while operating with a less conservative forecast internally.
The AG "produced no testimony either from any investor who claimed to have been misled by any disclosure", while the company disclosed its use of both the proxy cost and the greenhouse gas metrics no later than 2014, the judge said. Under the Martin Act, the state had to prove ExxonMobil made misstatements that had a material impact on its stock.
New York's Martin Act empowers officials to target a wide range of corporate behavior that could hurt shareholders.
After its initial theory fell apart, NY focused on what it said were inconsistencies in how the company applied a "proxy cost" of carbon in its internal forecasting.
The State of NY maintained that ExxonMobil had deliberately sought to mislead investors by misrepresenting these proxy costs: that the company had essentially maintained one (lower) set of estimated costs for internal use while publishing a higher set of costs for investors, a practice that could have led to investors overestimating the company's level of preparedness for climate change policy shocks.
Prosecutors argued that Exxon Mobil's use of the lower of the two forecasts misled investors about the cost of climate mitigation. One didn't understand the way some of Exxon's internal models worked, Ostrager wrote, adding there was no evidence that the company over-valued its Alberta oil sands assets. He said what the trial did show is that "ExxonMobil has a culture of disciplined analysis, planning, accounting and reporting".
"After four years, countless taxpayer-funded court resources, and a list of failed legal theories, this case should be a cautionary tale for future New York Attorneys General and activist politicians in other states. ExxonMobil is taking significant steps to minimize the greenhouse gas (GHG) emissions from our own operations".
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".