Exxon investors filed a class-action lawsuit Wednesday against the oil giant for its failure to disclose climate change risks—the world's first lawsuit of its kind.
The suit came the same day that Exxon threatened 17 state attorneys general, who are investigating the oil giant for such climate fraud, with depositions. Such a move would pull the attorneys general into costly legal fights that would go on for years, according to InsideClimate News.
The lawsuit's claim is over Exxon's recent swift drop in value, which followed the company's disclosure that it had been overvaluing about one-fifth of its oil and gas assets. The shareholders allege that "information disclosed to the market by Exxon was materially false and misleading," writes UK-based environmental law firm ClientEarth.
ClientEarth senior corporate lawyer Alice Garton said:
This development should be taken very seriously by all fossil fuel companies. It's no longer feasible to say the low oil price environment is temporary. The Paris Agreement is now in effect. Fossil fuels are in structural, and not cyclical decline—contrary to the rosy picture proffered by the industry. ClientEarth is investigating how far UK companies should also be reflecting this structural decline in their accounts and, where we find shortcomings, will bring legal challenges.
Indeed, analysts have warned that Exxon's finances are extremely precarious, partly as a result of investigations over the company's years-long failure to disclose climate risks, and that shareholders should take Exxon to task.
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In response to the lawsuit, Exxon sent Bloomberg BNA a statement describing its claims as "'frivolous' and the allegations as 'false and completely without merit,'" the financial outlet reports.
Meanwhile, InsideClimate News writes that an Exxon attorney on Wednesday "told a New York judge that the company is working on deposing at least 17 attorneys general and their staffs who earlier this year joined with New York Attorney General Eric Schneiderman under the banner of AGs United for Clean Power."
InsideClimate News continues:
That plan came to light during a hearing in Exxon's battle with Schneiderman over his office's investigation into whether the company violated consumer fraud laws in connection with climate change-related disclosures.
Massachusetts Attorney General Maura Healey, who is locked in a court battle with Exxon in Texas over her investigation of the company, said Exxon's legal strategy is "calculated to initiate no-holds-barred discovery" against the attorneys general, according to a motion her office filed in the Texas case.