U.S. Markets open in 3 hrs 3 mins

Exxon Blasts N.Y.’s Climate Suit as Trial Opens Amid Protests

Erik Larson

(Bloomberg) -- Exxon Mobil Corp.’s lawyer slammed New York’s securities-fraud case as the trial opened, saying the state “twisted” reality by conflating two internal metrics the company uses to account for the financial impact of climate change on its business.

Instead, Exxon has evidence proving the two metrics were used for different purposes and were never intended to be public, refuting New York’s claims that the differing numbers were kept to give the public a falsely rosy picture of the company’s financial health, attorney Theodore Wells said Tuesday.

“This is like no other securities fraud case in the history of the country,” Wells said in his opening statement in a crowded Manhattan courtroom. “You cannot have a securities fraud case that has absolutely nothing to do with the public books and records of a corporation.”

Environmental activists greeted the parties as they arrived for the first day of hearings. The case is the first to target an energy company for its climate disclosures and Exxon has argued it’s a politically motivated attack led by Democrats and wealthy environmentalists. Massachusetts has also been investigating and signaled recently it’s prepared to file a similar suit.

New York has witnesses including analysts and investors who will testify that they weren’t aware Exxon keeps two numbers, known as proxy costs and greenhouse gas costs, said Kevin Wallace, an attorney for New York Attorney General Letitia James.

“The fact that Exxon used two different numbers was well known internally,” Wallace said in his opening statement. “The misrepresentations were qualitatively and quantitatively material to its investors.”

Read more:

Oil Companies Rejected by Supreme Court on Climate Change SuitBig Oil’s Climate Change Reckoning Has Finally Arrived in Court

The trial will be decided by New York State Supreme Court Justice Barry Ostrager. The verdict is likely to be appealed, delaying resolution of the case for years, barring a settlement. No matter how the case goes, it won’t address the broader question of whether Exxon or any other company is liable for climate change.

To contact the reporter on this story: Erik Larson in New York at elarson4@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Heather Smith

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.