TEXAS — On Nov. 6, stockholders filed a class action suit against Irving-based Exxon Mobil Corp. claiming the company concealed knowledge of climate change to investors.
Lead plaintiff Pedro Ramirez Jr. accused Exxon Mobil Corp. of failing to disclose the threats of global warming and overstating the stock value of its oil and gas reserves.
Ramirez claims that Exxon Mobil had known for several years that the company’s access to its fossil fuel reserves would be limited due to an increase in global temperatures.
"Exxon's public statements were materially false and misleading when made as they failed to disclose that Exxon's own internally generated reports concerning climate change recognized the environmental risks caused by global warming and climate change," the complaint states.
The lawsuit comes in the wake of an SEC investigation by several attorneys generals into whether Exxon Mobil broke the law by misrepresenting its knowledge of fossil fuels and climate change. In March, the attorneys general of 18 states and territories, including Massachusetts Attorney General Maura Healey, formed a formal coalition to pursue climate change litigation against big energy companies, including Exxon Mobil.
Exxon Mobil publicly stated it had had disclosed as much about global warming as it had learned. In June, the U.S. Virgin Islands Attorney General Walker dropped a subpoena for a climate change investigation. Also in June, Exxon Mobil sued Massachusetts Attorney General Maura Healey in the U.S. District Court for Northern Texas, seeking to block a similar subpoena. On Oct. 13, U.S. District Court Judge Ed Kinkeade of Texas issued a discovery for Exxon Mobil to examine Healey’s records to determine whether she acted in “bad faith.”
Healey said that Exxon Mobil scientists knew since 1977 that burning fossil fuels was contributing to global warming. She issued a civil investigative demand of Exxon Mobil records over the past 40 years to determine if Exxon Mobil violated Massachusetts consumer protection laws by not informing shareholders about the threat of global warming.
Exxon Mobil argued that Healey’s investigation violates the First and Fourth Amendments of the U.S. Constitution, which protect free speech and prohibits unreasonable searches. Healey requested the case be dropped or moved to the District of Massachusetts or reviewed by the U.S. Court of Appeals for the Fifth Circuit. An 11-member group of state attorneys general has backed Exxon Mobil’s effort to squash the Massachusetts subpoena, including Texas Attorney General Ken Paxton.
In the current class action suit, Ramirez claims ExxonMobil used an inaccurate "price of carbon" to overstate the value of its reserves.
“Allegations in this frivolous lawsuit are false and completely without merit,” Exxon Mobil spokesman Alan T. Jeffers said in a statement to the South East Texas Record. “We will defend ourselves and are confident our financial reporting and communications with investors fully comply with all legal and accounting requirements. This lawsuit misstates our financial reporting and repeats the same tired allegations pushed by activists and inaccurate media reports that claim we reached definitive conclusions about climate change decades before the world’s experts and while climate science was in an early stage of development. This is simply not credible.”
Ramirez seeks class certification, compensatory damages and costs of suit. Lead counsel Joe Kendall of Dallas-based Kendall Law Group didn't respond to a request for comment.