Lawyers for New York state and Exxon Mobil Corp delivered closing arguments on Thursday in a closely watched trial accusing the oil company of hiding from investors the true cost of addressing climate change in the United States and beyond.
The case, filed in October 2018 at state court in New York City, was the first of several climate-related lawsuits against major oil companies to go to trial.
The trial featured testimony from investors, experts and former Exxon Chief Executive Rex Tillerson – also the former US secretary of state – who denied the allegations against the company.
New York state’s attorney general alleges that Exxon caused investors to lose up to $1.6bn by falsely telling them it had properly evaluated the impact of future climate regulations on its business.
Exxon’s lawyer said on Thursday that the case was “meritless” and that the state failed to offer testimony from any investor who was misled.
“The case is almost a joke,” attorney Theodore Wells said. “But it’s a cruel joke, your honor, because the reputations of a lot of people have been hurt and disparaged by the bringing of the complaint.”
A lawyer for the state said the case came down to whether Exxon had adequately disclosed the cost of climate change.
“The question here isn’t whether Exxon employees are good people or even were trying their best,” said Jonathan Zweig, New York’s assistant attorney general.
“The question in this case is whether Exxon’s disclosures were accurate, and the evidence shows they were not,” he added.
To win the case and receive damages, the state needs to convince Judge Barry Ostrager that the company’s statements affected the value of Exxon’s stock.
The New York attorney general has said the company used a “proxy cost” of up to $80 per tonne of carbon emissions in wealthy countries by 2040. But internally, Exxon used figures as low as $40 per tonne – or none at all.
Tillerson testified that the proxy cost represented a “macro level” assessment of the likely effect of the world’s future carbon regulations on demand for fossil fuels, and was incorporated into a data guide used throughout Exxon.
Separately, he said, the company evaluated greenhouse gas costs for specific projects – when appropriate – at a “micro level”.
Wells said the attorney general’s case wrongly conflated big-picture proxy costs with the separate, project-specific costs. Exxon has also assailed the suit as political.
Last month, just two days after the New York trial began, Massachusetts filed a similar lawsuit accusing Exxon of misleading investors and consumers for decades.
Both Massachusetts and New York began investigating Exxon after news reports in 2015 said company scientists had determined that fossil fuel combustion must be reduced to mitigate the impact of climate change.
Exxon and other oil companies including BP Plc, Chevron Corp and Royal Dutch Shell Plc face lawsuits by cities and counties across the US seeking funds to pay for seawalls and other infrastructure to guard against rising sea levels brought on by global warming.
The companies have said in court filings that they cannot be held liable for climate change. They also say that they are working to address the problem.
If the New York and Massachusetts lawsuits are successful, other state attorneys general could bring similar cases, said Robert Percival, who heads the environmental law programme at the University of Maryland.
Meanwhile, teenagers across the US have filed more than half a dozen lawsuits accusing states and, in one case, the US government of violating their constitutional rights to life, liberty and property by failing to implement policies that curb climate change.
Governments have argued there is no constitutional right to a clean environment and that Congress and the White House – not the courts – should set climate policy.