Exxon-Healey Dispute Gets Hearing as State AGs Weigh In

This week in the Northern District of Texas, U.S. District Judge Ed Kinkeade heard oral argument on Exxon Mobil’s motion for preliminary injunction against Massachusetts Attorney General Maura Healey’s civil investigative demand, issued to Exxon on April 19, 2016, which sought documents from Exxon related to its analysis of research efforts to study climate change.  The argument followed two amicus briefs from state attorneys general across the country.

The first brief, filed in August for the states of Maryland, New York, Illinois, Iowa, Maine, Minnesota, Mississippi, New Mexico, Oregon, Rhode Island, Vermont, Washington, the District of Columbia, and the Virgin Islands, supported Healey’s efforts, calling Exxon’s proposed injunction “sweeping and unprecedented.”  Citing their own offices’ authority to investigate and combat violations of state law, the amici pressed that “[p]roper respect for the States’ sovereign interests has long dictated that the federal courts should not needlessly impede this core duty of state Attorneys General to detect and halt misconduct.”  They also pointed to the “comprehensive process” available to Exxon for challenging the CID in state court, as Exxon has done.

The second brief, filed in September for the states of Texas, Louisiana, South Carolina, Alabama, Michigan, Arizona, Wisconsin, Nebraska, Oklahoma, Utah, and Nevada, acknowledged that state AGs “possess sovereign authority to investigate violations of law,” but accused Healey of “engag[ing] in [an] unrestrained, investigative excursion to promulgate a social ideology [and] chill the expression of points of view, in international policy debates.”  Alleging that the investigation “is the product of a cultural movement” by “powers aligned on [an] axis of ideology,” these state AGs claimed the CID “suppress[ed] policy debates” in violation of the First Amendment.  Though aimed at the activities of AG Healey, the Texas-led amici also counted NY AG Eric Schneiderman and former Vice President Al Gore as members of the “axis of ideology.”

While the line-up of state AGs along partisan lines is not surprising, given that the issue is climate change, it is interesting to see state AGs arguing against the power of other state AGs to investigate potential wrongdoing.  The Texas-led coalition, for example, criticized the CID for “seeking investigative notes as well as the names of contacts” for “chilling the free exercise of political speech and association.”  The Maryland-led coalition pointed out that issuing sizeable CIDs to out-of-state firms was hardly novel, citing the Texas AG’s investigation of New York and New Jersey-based financial firms, and the Michigan AG’s investigation of foreign auto-makers.

Judge Kinkeade made no ruling at the hearing’s end, and Exxon’s superior court action in Massachusetts to quash the CID remains live.  Whatever happens, the dispute is likely to have ramifications for the ability of state AGs to investigate out-of-state firms going forward.

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