Business Groups Ask SCOTUS to Shut Down Massachusetts #ExxonKnew Shakedown
- October 17, 2018
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The U.S. Chamber of Commerce and the National Association of Manufacturers (NAM) are speaking out against the “overreaching” intimidation tactics of #ExxonKnew activists and aligned Massachusetts Attorney General Maura Healey. Late last week, the business groups filed an amicus brief, which asks the U.S. Supreme Court to overturn a decision by the Massachusetts Supreme Court upholding the validity of the Attorney General’s subpoena seeking decades of ExxonMobil’s communications regarding climate change.
At issue is whether the Massachusetts Attorney General should be able to investigate and compel ExxonMobil to turn over decades worth of documents, even though the company has essentially no presence in the state of Massachusetts. In their initial Supreme Court petition ExxonMobil noted:
“Here, a Massachusetts state court exercised specific jurisdiction over petitioner, a corporation registered in New Jersey and headquartered in Texas. While petitioner has operations in many States and countries, it does not own or operate a single retail service station in the Commonwealth of Massachusetts. Service stations in Massachusetts that sell under the Exxon or Mobil brand names are owned and operated by independent third parties.”
In an attempt to circumvent this critical issue of jurisdiction and justify her deep probe into the company’s confidential documents, Attorney General Healey cited advertisements in Massachusetts for ExxonMobil products, which she claims do not meet the standards set by the state’s consumer protection laws. But the advertisements do not mention climate change and in many cases were not even approved or created by ExxonMobil. In their petition, ExxonMobil pointed out:
“When pressed at oral argument for the most direct contact by petitioner with Massachusetts consumers, counsel for respondent acknowledged that petitioner’s Massachusetts advertisements did not communicate directly or indirectly about climate change. Rather…the only way that petitioner could possibly have violated Massachusetts’ consumer protection law was on the theory that, in unrelated advertising, petitioner somehow had an affirmative obligation to warm consumers about climate change.”
In other words, the basis of Healey’s investigation is her belief that ExxonMobil has an obligation to warn consumers as part of their advertising that by using their product they are contributing to global warming.
No, seriously, here is a direct quote from Healey’s counsel:
“If they’re doing sales and marketing in Massachusetts, and they know things that they should be telling people – either consumers or investors – that would be relevant to the consumers or investors’ decisions, then they’ve gotta make that part of their advertising. They can’t simply go around and say, ‘We’re selling you this terrific product,’ and keep to themselves what they know about the possible impacts of those products on global warming…
“So Exxon has an obligation – and all of this is assuming that what we think may have happened did happen, and there was an understanding about the impact on climate change – that Exxon would have a responsibility both at the national level and at the local level to implement information to the consumers so that they could understand when they purchase a tank of gas that this is gonna have an impact on global warming and maybe they should be thinking about buying a more fuel-efficient car, maybe they should be thinking about public transportation…” (emphasis added)
To be clear, that’s not a requirement in Massachusetts or anywhere in the world. And even if it were, it would apply to every energy company, not just ExxonMobil, so why is Healey only targeting ExxonMobil?
In their amicus brief, the Chamber and NAM agreed that the connection established by Massachusetts Attorney General Healey is invalid:
“There simply cannot be a ‘substantial’ connection between a company’s ‘knowledge of and activities related to climate change’…and in-State activities that demonstrably have nothing to do with climate change. And allowing Massachusetts to exercise jurisdiction over this matter infringes on the sovereignty of other States with a greater interest in the matter, including petitioner’s State of incorporation and principle place of business and the State from which the allegedly improper communications emanated.”
If Healey’s far-fetched investigation is upheld as legitimate, the decision will present companies around the country with the grave implication that they could easily become subject to politically-motivated probes from ambitious state attorney generals. As the Competitive Enterprise Institute revealed earlier this year, #Exxonknew activists have infiltrated state attorneys’ general’s offices around the country and are using the power of the government to pursue Exxon and other political targets on behalf of their political donors.
The broader implications of this case prompted the Chamber and NAM to weigh in and warn that this would substantially hinder the ability of businesses to predict and mitigate liability risk:
“Extending specific jurisdiction to claims or matters that are not substantially related to a defendant’s forum contacts eliminates any predictability. A company’s ability to assess its exposure to enforcement actions by regulators would be virtually nil if merely doing some business in a State authorized the State’s executive branch to investigate the company on any subject, no matter how remotely connected to the company’s in-State activities.”
As the United States Supreme Court considers whether to review ExxonMobil’s petition to overturn the Massachusetts’ Supreme Court decision to allow Attorney General Healey’s flawed investigation, business owners across the country should take note of the outcome. If legitimized, Healey’s investigation will further embolden enterprising attorney’s generals around to country to pursue investigations without limits.
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