By: Amy D’Avella

Exxon is no stranger to litigation.  As the leader in a high-risk industry, defending itself against an onslaught of lawsuits is simply the cost of doing business.  However in a January 8, 2018 filing, Exxon assumed the role of aggressor, accusing public officials currently suing the company—most notably the attorneys general of New York, Massachusetts, and California—of orchestrating an illegal scheme against the company.[1] The company utilized a rule unique to Texas which allows a petitioner access to much more insight into a claim against it than it would ordinarily have access to so early in the litigation.[2]

This is just one of several civil conspiracy claims alleged by Exxon to help combat recent climate change actions against the company.[3] Given the pain and destruction Exxon is accused of creating, the increasing scale of evidence indicating Exxon’s climate negligence, and the growing pressure from government, the public, and shareholders to respond to climate change, complaining that its Constitutional rights are at risk[4]seems an unlikely way of winning back public trust.  Are Exxon’s climate countersuits a savvy defense mechanism, or a sign of a crumbling empire?

Exxon’s most recent countersuit is a response to claims made by California municipalities seeking damages from Exxon and other oil corporations, alleging that the companies knowingly exacerbated climate change impacts, endangering property and lives.[5] In the wake of the 2015 revelation that Exxon was well aware of its long-term climate footprint despite statements to the contrary,[6]several other cities and states are pursuing tort claims similar to those made by California,[7]and the attorneys general of New York and Massachusetts are also pursuing securities fraud investigations.[8]

Without acknowledging the plight of the citizens who have experienced calculable, tangible harm as a result of climate change, Exxon’s countersuits portray the company as a victim of politically-driven prosecutorial abuse.[9] Though predictable that Exxon would deny culpability for the consequences of its business, Exxon’s countersuit seems to indicate that it is willing to allocate resources to fight climate transparency, contrary to the express position of its shareholders.[10]

Is Exxon’s risk management strategy disorganized and ill-advised or opaquely brilliant? The latter seems unlikely, particularly as its countersuit is not poised to win.[11] Further, in addition to its unusually confrontational approach to litigation, Exxon is deepening its liability exposure by presenting an arguably overly-optimistic climate impacts outlook, a shareholder-demanded disclosure, at a time when the company is currently facing fraud allegations for misstatements related to climate change.[12] Since it is in in an exceptionally vulnerable position given scrutiny from regulators, shareholders, and the public, it would make more sense for Exxon to take a more conciliatory path.[13]

Why then take such an unwinnable and hostile position against its litigation opponents when the company could not possibly inoculate itself from the criticisms which prompted the lawsuits in the first place?

Perhaps because Exxon has nothing left to lose in its attempt to secure sustainability as a company.

What looks like a foolhardy mission may be Exxon’s last campaign to protect itself on as many fronts as it possibly can resist before liability—and futility—consume it.[14] Whereas the countersuit may typically be attributable to the privilege of vast resources allowing Exxon to pursue every defense tool at its disposal, Exxon’s conspiracy allegations suggests an act of desperation, not strength.[15]

Exxon’s response to an onslaught of unique lawsuits sheds light on the compounding risks oil companies currently face, evidenced in part by new tactics implemented by plaintiffs.[16] The company may be embracing a reckless litigation strategy[17]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.[18] 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.[19]

From Exxon’s perspective, there is risk at every turn.  It is currently being sued for past failure to disclose its susceptibility to climate change, and after finally conceding to investors that it will, going forward, release climate exposure data,[20]other companies have been sued because of the transparency they provided in similar concessions.[21] If the company is going to be criticized no matter what it does, why bother attempting to appear as—let along become—a responsible climate actor?  Unlike many companies that need to factor in public perception when making decisions, Exxon has the luxury of deprioritizing this since it likely does not lose consumers or market value based its response to climate crises.[22]  Moreover, Exxon’s relevance, once thought unquestionable, may soon dwindle with the impendency of peak oil demand, predicted by some to occur as early as 2030.[23]  Without a reputation to protect and with its entire business at stake, Exxon might as well go on the offensive, even if it means further antagonizing its critics.

The countersuit’s boldness seems to suggest Exxon’s lack of confidence that it can win the original lawsuits on the merits, and a fear that the current docket of lawsuits is just the beginning of a flood.[24] Perhaps Exxon is bracing itself for new accusations where officers or directors could be held personally liable,[25]or a wave of new lawsuits stemming from innovative claims which will exploit newly tested causes of action.[26]

Though Exxon’s aggression may make sense among the last gasps of a doomed industry, it is still surprising given that many other big oil players are adapting to the rapidly changing tone from policymakers and the public on climate change.[27]  Rather than further alienating legal adversaries, Exxon would probably have been better off encouraging the Trump administration to address climate change so it could have driven the climate accountability conversation on its terms and lessened its vulnerability to criticism.[28]

Exxon may rest assured that the Trump administration is not going to force the company to expedite its climate adaptation; as just one example, it is unlikely the Securities Exchange Commission will formally enforce its own suggestions on environmental disclosure anytime soon.[29]  But if the courts validate the claims in pending litigation against Exxon, the stakes may rise beyond state lawsuits for physical damages and even fraud; directors may be held personally for inaction and deception.[30] Exxon may feel secure that, given its current existential crisis, a few aggressive countersuits couldn’t possibly hurt.

[1]In re Exxon Mobil Corp, No. 096-297222-18, at 1 (Tex. Dist. Ct. petition for pre-suit depositions filed Jan. 8, 2018).

[2]Tex. Rules of Civil Procedure Code Ann.§202.1 (West 2018); see Yvette Ostolaza & Rob Velevis, Two unique forms of pre-lawsuit discovery that can help win Texas-based or bankruptcy cases, Inside Counsel (Feb. 24, 2015), (While the Federal Rules and most states allow some form of pre-suit discovery to perpetuate testimony, Texas permits much broader pre-suit discovery. Specifically, parties may take depositions not just to perpetuate testimony, but also ‘to investigate a potential claim or lawsuit.’” (quoting § 202.1(b)).

[3]See, e.g. Jeremy Meisinger, Exxon Climate Change Investigation Updates, St. AG Insights (Oct. 24, 2016), (describing Exxon’s civil actions against the attorneys general of Massachusetts and New York in response to climate lawsuits).

[4]In re Exxon Mobil Corp, No. 096-297222-18, at 6 (Tex. Dist. Ct. petition for pre-suit depositions filed Jan. 1, 2018)(“In light of these events, ExxonMobil seeks to investigate potential claims of abuse of process, civil conspiracy, and constitutional violations and to perpetuate testimony for a suit it anticipates filing in Texas in connection with those potential claims.”).

[5]John O’Brien, Exxon Prepares To Sue California Cities, Says They Contradict Themselves On Climate Change, Forbes (Jan. 8, 2018, 7:38 PM),

[6]See John Schwatrz, Exxon Misled the Public on Climate Change, Study Says, N.Y. Times (Aug. 23, 2017), (confirming that while Exxon’s internal research showed significant evidence of climate change, Exxon’s external narrative focused on their uncertainty).

[7]See generally Lynn Zinser, The Ins and Outs of the Exxon Climate Investigation: A Timeline, Climate Liability News (July 13, 2017),

[8]Emily Flitter, New York prosecutor says Exxon misled investors on climate change, Reuters(June 2, 2017),

[9]See John O’Brien, supra note 5 (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.”).

[10]See Bradley Olson, Exxon Shareholders Pressure Company on Climate Risks, Wall St. J. (May 31, 2017, 1:55 PM), (discussing a nonbinding resolution passed by Exxon’s shareholders “calling for the company to share more information about how climate change and regulations could impact its operations,” characterizing the vote as “a powerful symbol that big investors see climate change as a major risk that warrants greater transparency from oil and gas companies.”).

[11]See Stuart Leavenworth, These communities sued Big Oil over climate change; then the backlash began, McClatchy (Mar. 5,  2018, 11:16 PM), (“It is unlikely Exxon will ultimately triumph in court, but the tactic may succeed in discouraging other cities and states from filing similar lawsuits. And that may be the point.”).

[12]See Brad Plumer & Hiroko Tabuchi, Exxon Studies Climate Policies and Sees ‘Little Risk’ to Bottom Line,N.Y. Times(Feb. 2, 2018), (discussing Exxon’s conviction that its success will not be significantly impeded by climate policy or decreased demand).

[13]See, e.g. Clifford KraussS.E.C. Is Latest to Look Into Exxon Mobil’s Workings, N.Y. Times(Sept. 20, 2016), a Securities and Exchange Commission probe which “mirrors an investigation by the New York attorney general, Eric T. Schneiderman, into how the company has valued its assets in light of future climate change regulations that may force fossil fuel companies to keep oil, natural gas and coal in the ground.”), Schwartz; supra note 6 (noting the significance of the 2015 Inside Climate News investigation which revealed “that [Exxon] had spread doubt about the risks of climate change despite its own extensive research in the field,” and spurred investigations by Eric T. Schneiderman and the Securities and Exchange Commission into Exxon).

[14]SeeJosh Dzieza, If Climate Change Wrecks your City, Can it Sue Exxon?, The Verge (Feb 20, 2018, 1:05 PM), (suggesting that climate litigation will increase as science advances and activists seek alternative remedies given the unlikelihood the Trump administration will take measures to mitigate climate change).

[15]C.f. Bob Van Voris, Exxon Sues the Suers in Fierce Climate-Change Case, Bloomberg (Feb. 13, 2018), (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).

[16]  See Dino Grandoni, The Energy 202: New York steps up legal fight against ExxonMobil, Wash. Post (Jan. 11, 2018), (explaining that while past federal climate lawsuits proved unsuccessful, the new lawsuits against oil companies are brought by states that do not have precedent on the issues alleged).

[17]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).

[18]Chelsea Harvey, Scientists Can Now Blame Individual Natural Disasters on Climate Change, Scientific American (Jan. 2, 2018),

[19]The Carbon Majors Database CDP Carbon Majors Report 2017, The Carbon Disclosure Project (Jul. 2017),

[20]See Ed Crooks, ExxonMobil Bows to shareholder pressure on climate reporting, Fin. Times (Dec. 11, 2017), (describing Exxon’s agreement to an investor proposal which requested that the company more comprehensively disclose its climate risk).

[21]See Corporate Social Responsibility Statements – Recent Litigation and Avoiding Pitfalls, Gibson Dunn (Mar. 9, 2017), (explaining that even corporate social responsibility statements which litigants can prove to be inaccurate can expose a company to litigation).

[22]See, e.g. Jonathan Salem Baskin, Why the Arkansas Pipeline Spill Won’t Hurt Exxon Mobil’s Reputation, Forbes(April 3, 2013, 7:00 AM), that despite negative media coverage following an oil spill, Exxon’s value did not decrease, nor is it to decrease in the future following similar events, because “[Exxon’s] reputation isn’t the result of people “liking” it or approving of PR or marketing claims, but rather their understanding of what the company does, why and how it does it, and their ability to connect those behaviors to measurable business outcomes.”) (acknowledging that as climate change dialogue discourse, so will the volatility of Exxon’s reputation and consequently its value).

[23]Alex Longley, BofA Sees Oil Demand Peaking by 2030 as Electric Vehicles Boom, Bloomberg (Jan 22, 2018, 7:04 AM),

[24]See Dzieza, supra note 18 (speculating climate litigation will continue to increase under the Trump administration).

[25]J. Kevin Healy and Jeffrey M. Tapick, Climate Change: It’s Not Just a Policy Issue for Corporate Counsel – It’s a Legal Problem, 29 Colum. J. of Envtl. L. (2004) 89, 104-105 (applying the Caremark standard to climate change decisions, concludes that the business judgment rule may be suspended and directors could be held liable for failing to act on climate change vulnerabilities and risks).

[26]See Kurtis Alexander, Oil giant ExxonMobil counters climate-change suits by SF, other governments, S.F. Chron. (Jan. 8, 2018), (citing sources asserting that Exxon’s countersuit was intended to discourage future similar lawsuits and draw attention away from the allegations made in the instigating complaint).

[27]See, e.g. Justin Worland, Even Oil Companies Are Now Saying Climate Change Will Hurt Their Business, Time (Mar. 6, 2018, 5:57 PM), (“The recognition of the energy transition has grown over the past year with the oil and gas players,” says Marie-Helene Ben Samoun, a Houston-based partner at the Boston Consulting Group. “They are not only acknowledging global warming, but they are also acknowledging the energy transition and the impact on their own portfolio.”).

[28]See Dzieza, supra note 18 (attributing the uptick in climate lawsuits against oil companies to the federal government’s inaction on environmental protection).

[29]See David Gelles, S.E.C. Is Criticized for Lax Enforcement of Climate Risk Disclosure, Wash. Post (Jan. 23, 2016), (stating that the more climate-friendly Obama administration did not aggressively pursue a climate disclosure agenda); Christopher Flavelle, California Critic Cites Climate Hypocrisy, Urges SEC Probe, Bloomberg (Feb. 6, 2018, 2:57 PM), (discussing the unlikelihood that the Trump administration will expand climate disclosure requirements).

[30]See generally In re Caremark Int’l, 698 A.2d 959 (el. Ch. 1996) (holding corporate directors accountable for breach of fiduciary duty).

Share this post