By: Amy D’Avella
Exxon is no stranger to litigation. As the leader in a high-risk industry, high-stakes lawsuits are a part of Exxon’s ordinary business operations. However, accusing the New York, Massachusetts, and California attorneys general of conspiracy is far from ordinary. This bold step follows lawsuits from the three states which each seek damages from Exxon and other oil companies, alleging that the companies knowingly exacerbated climate change which has destroyed or endangered property and lives. Following the 2015 revelation that Exxon was well aware of its climate impact despite statements to the contrary, the attorneys general of New York and Massachusetts are also pursuing securities fraud investigations. Without acknowledging the plight of the citizens who have experienced tangible climate impacts, Exxon’s countersuits portray itself as the victim of politically-motivated prosecutorial abuse. This stance gives the appearance that Exxon is not only unwilling to accept responsibility in defiance of shareholders, but is allocating resources and sacrificing its reputation to fight a losing battle.
Exxon’s response to this onslaught of unique lawsuits sheds light on the shifting risk to oil companies evidenced in part by new tactics implemented by plaintiffs. While Exxon’s retaliatory arguments seem futile regardless of the merits of the plaintiff’s complaint, the company may be embracing a reckless litigation strategy at the expense of its reputation because of the depth of its risk exposure. As evidenced by the New York and California lawsuits, Exxon’s climate responsibility is calculable, at least in terms of physical damage caused by climate disasters. As climate change science grows ever-more sophisticated, we will soon be able to isolate Exxon’s responsibility for climate impacts with increasing specificity; scientists already know Exxon was the fifth largest greenhouse gas producer in the world between 1988-2015.
Is Exxon’s risk management strategy disorganized and ill-advised or opaquely brilliant? The latter seems unlikely; in addition to its unusually confrontational approach to litigation, Exxon is deepening its risk exposure by presenting an arguably overly-optimistic climate impacts outlook, a disclosure mandated by shareholders, when it is currently facing fraud allegations for misstatements related to climate change. Exxon is in a uniquely risky position given pressure from regulators, shareholders, and the public. Why then take such an unwinnable and hostile approach towards its litigation opponents that will inevitably tank its public relations value amongst all three constituents? Perhaps because Exxon has nothing left to lose. What looks like a foolhardy mission may be Exxon’s last campaign to protect itself on as many fronts as it can possibly resist before liability consumes it. Exxon’s reputation has not been sterling for some time, and there is little evidence to suggest Exxon loses consumers or stock value based on reputational hits. From Exxon’s perspective, there is a risk at every turn; it is currently being sued for past failure to disclose its susceptibility to climate change, meanwhile after finally conceding to investors that it will going forward release climate exposure data, other companies have been sued for the information provided in similar concessions.
With such bold accusations against public officials, Exxon is either confident that its lack of climate legal liability will perpetuate, or terrified that this current docket of lawsuits is just the beginning of a flood. Perhaps Exxon is bracing itself for new accusations where officers or directors could be held personally liable, or a wave of new lawsuits stemming from litigation savvy which will exploit newly tested causes of action. Rather than further antagonizing its legal adversaries, Exxon would probably have been better off encouraging the Trump administration to address climate change so it could have driven the conversation on its terms and lessened its vulnerability to criticism. It is unlikely the SEC will formally enforce its suggestions on environmental disclosure anytime soon under the Trump administration. But if the courts acquiesce to the claim in pending litigation that Exxon deliberately failed to disclose climate risk and further failed to mitigate it, the stakes may rise beyond state lawsuit for physical damages; directors may be held personally for inaction and fraud. On the other hand, Exxon may feel secure that after all its reputational challenges, a few aggressive countersuits couldn’t possibly hurt.
 John O’Brien, Exxon Prepares To Sue California Cities, Says They Contradict Themselves On Climate Change, Forbes (Jan. 8, 2018, 7:38 PM), https://www.forbes.com/sites/legalnewsline/2018/01/08/exxon-prepares-to-sue-california-cities-say-they-contradict-themselves-on-climate-change/#7433216b522a.
 Dino Grandoni, The Energy 202: New York steps up legal fight against ExxonMobil, Wash. Post (Jan. 11, 2018), https://www.washingtonpost.com/news/powerpost/paloma/the-energy-202/2018/01/11/the-energy-202-01112018-energy202/5a568d2830fb0469e8840069/?utm_term=.40e3eca1fe55.
 See John Schwatrz, Exxon Misled the Public on Climate Change, Study Says, N.Y. Times (Aug. 23, 2017), https://www.nytimes.com/2017/08/23/climate/exxon-global-warming-science-study.html (confirming that while Exxon’s internal research showed significant evidence of climate change, Exxon’s external narrative focused on their uncertainty).
 Emily Flitter, New York Prosecutor Says Exxon Misled Investors on Climate Change, Reuters (June 2, 2017) https://www.reuters.com/article/us-usa-climatechange-exxon/new-york-prosecutor-says-exxon-misled-investors-on-climate-change-idUSKBN18T1XK.
 See Bob Van Voris, Exxon Sues the Suers in Fierce Climate-Change Case, Bloomberg (Feb. 13, 2018), https://www.bloomberg.com/news/articles/2018-02-13/exxon-sues-the-suers-in-fierce-bid-to-defeat-climate-lawsuits (quoting legal experts who believe Exxon’s countersuit was an effort to intimidate the state plaintiffs to drop the lawsuits and distract from the climate change controversy).
 See O’Brien, supra note 1 (quoting an Exxon statement which argued that the state lawsuits were motivated by politicians dissatisfied with the “federal government for failing to adopt their preferred policies on climate change . . . But rather than focusing their efforts in the marketplace of ideas and adopting a strategy of persuasion, the members of this conspiracy chose to advance their political objectives by imposing unlawful burdens on perceived political opponents.”).
 See Grandoni, supra note 2 (explaining that while past federal lawsuits proven unsuccessful, the new lawsuits against oil companies are brought by states for which do not have current precedent on the issues alleged).
 See Van Voris, supra note 5 (quoting experts who believe that Exxon’s reliance on a meeting of attorneys as evidence of a conspiracy against the company will likely not prove successful in court given the commonality of meetings to discuss litigation strategy), Chelsea Harvey, Scientists Can Now Blame Individual Natural Disasters on Climate Change, Scientific American (Jan. 2, 2018), https://www.scientificamerican.com/article/scientists-can-now-blame-individual-natural-disasters-on-climate-change/.
 Van Voris, supra note 5.
 The Carbon Majors Database CDP Carbon Majors Report 2017, The Carbon Disclosure Project (Jul. 2017), https://b8f65cb373b1b7b15feb-c70d8ead6ced550b4d987d7c03fcdd1d.ssl.cf3.rackcdn.com/cms/reports/documents/000/002/327/original/Carbon-Majors-Report-2017.pdf?1499691240.
 See Brad Plumer and Hiroko Tabuchi, Exxon Studies Climate Policies and Sees ‘Little Risk’ to Bottom Line, N.Y. Times (Feb. 2, 2018) https://www.nytimes.com/2018/02/02/climate/exxon-global-warming.html (discussing Exxon’s conviction that its success will not be significantly impeded by climate policy or decreased demand).
 See Josh Dzieza, If Climate Change Wrecks your City, Can it Sue Exxon?, The Verge (Feb 20, 2018, 1:05 PM), https://www.theverge.com/2018/2/20/17031676/climate-change-lawsuits-fossil-fuel-new-york-santa-cruz (suggesting that climate litigation will increase as science advances and activists seek alternative remedies given the unlikelihood the Trump administration will take bold measures to mitigate climate change).
 See Ed Crooks, ExxonMobil Bows to Shareholder Pressure on Climate Reporting, Fin. Times (Dec. 11, 2017), https://www.ft.com/content/8bd1f73a-dedf-11e7-a8a4-0a1e63a52f9c (describing Exxon’s acquiescence to an investor proposal which requested that the company more comprehensively disclose its climate risk).
 See Corporate Social Responsibility Statements – Recent Litigation and Avoiding Pitfalls, Gibson Dunn (Mar. 9, 2017), https://www.gibsondunn.com/corporate-social-responsibility-statements-recent-litigation-and-avoiding-pitfalls/ (explaining that even corporate social responsibility statements which litigant’s can prove to be inaccurate can expose a company to litigation).
 See Dzieza, supra note 11 (speculating climate litigation will increase under the Trump administration).
 See David Gelles, S.E.C. Is Criticized for Lax Enforcement of Climate Risk Disclosure, Wash. Post (Jan. 23, 2016), https://www.nytimes.com/2016/01/24/business/energy-environment/sec-is-criticized-for-lax-enforcement-of-climate-risk-disclosure.html (stating that the more climate-friendly Obama administration did not aggressive pursue a climate disclosure agenda), Christopher Flavelle, California Critic Cites Climate Hypocrisy, Urges SEC Probe, Bloomberg (Feb. 6, 2018, 2:57 PM), https://www.bloomberg.com/news/articles/2018-02-06/sec-urged-to-investigate-california-officials-over-climate-risk (discussing that Trump probably will not advance climate disclosure requirements).
 In re Caremark Int’l, 698 A.2d 959 (Del. Ch. 1996) (holding corporate directors accountable for breach of fiduciary duty).