The New York State Supreme Court dismissed with prejudice claims brought by the Attorney General of New York State ("NY AG") against ExxonMobil Corporation ("Exxon") for misleading investors on potential costs related to climate change risk.
The Court found that the NY AG failed to provide sufficient evidence that Exxon violated New York State's Martin Act (concerning the NY AG's power to investigate any publicly-held company for financial fraud) or Executive Law § 63(12)(concerning the NY AG's power to investigate civil fraud). The NY AG alleged that Exxon provided a "highly misleading analysis" to its investors indicating that Exxon faced little or no risk from climate change regulations. However, the Court stated, the NY AG did not prove that Exxon made any material misstatement or omission and did not produce any investor who could claim that he or she was misled. Additionally, the Court determined that the NY AG failed to demonstrate that any alleged misrepresentation by Exxon "would have been viewed by a reasonable investor as having significantly altered the 'total mix' of information made available."
The Court stated that it's determination does not "absolve Exxon[] from responsibility for contributing to climate change through the emission of greenhouse gases in the production of its fossil fuel products."
Similar lawsuits against Exxon filed in Massachusetts, Texas and New Jersey are still pending.
Commentary
The New York State Supreme Court found that the NY AG's case was unsupported. Among other findings, the Court said that the NY AG did not produce any investor who could claim that he or she was misled. Unsupported claims against companies that do business in, and create jobs in New York State, waste the resources of the Office, detract from the ability to go after persons who actually violate the law, and discourage businesses from operating within the state.
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