Yesterday, Judge Valerie Caproni dismissed claims brought by ExxonMobil against New York Attorney General Schneiderman and Massachusetts Attorney General Healey. Boiled down to their essence, ExxonMobil’s claims were that investigations by Schneiderman and Healey into the possibility that ExxonMobil had committed fraud by misleading investors regarding the risks that climate change poses to ExxonMobil’s business were politically motivated and in bad faith.
The decision was not difficult. ExxonMobil pretty much assumed its conclusion and then simply alleged as ipse dixit that statements by the AG’s were proof of that conclusion. Thus, the case falls squarely under the Supreme Court decisions in Iqbal and Twombly – pounding the table very loudly does not convert speculation into the type of assertion that can survive a motion to dismiss.
Quoting a number of relevant paragraphs from the complaint or proposed amended complaint, the Court simply noted that:
It is not possible to infer an improper purpose from any of these comments; none of which supports Exxon’s allegation that the NYAG is pursuing an investigation even though the NYAG does not believe that Exxon may have committed fraud.
My only complaint with the opinion was that it did not clearly distinguish between the possibility that the AGs had a political motive and the requirement that ExxonMobil prove bad faith. Exxon’s evidence was basically that the investigation was politically driven. However, there’s nothing per se wrong with that, so long as the AGs do believe that ExxonMobil may have committed fraud. The two are not inconsistent and in fact the most weight ExxonMobil’s complaint can bear is that the investigation was politically motivated but that the AGs do truly believe that ExxonMobil may have committed fraud.
Scheiderman and Healey are both elected officials. Elected officials are supposed to be political and supposed to respond to constituents. There’s nothing wrong with that. There’s actually a lot of case law to that effect in the § 1983 context. Subjects of an AG investigation can’t bring claims based on allegations that an AG was politically motivated. They have to allege that the AG doesn’t actually believe that he/she has a case. ExxonMobil did not come close to asserting that here and the case was properly dismissed.