FORT WORTH – Texas appeals court justices will soon decide if ExxonMobil can use Texas courts to pursue counter-litigation against the public officials and private lawyers who have teamed to sue the oil industry in California over the alleged effects of climate change.
On Jan. 15, the Second Court of Appeals heard oral arguments in an appeal brought by several California cities and counties that seek to dismiss Exxon's effort to depose numerous public officials and a private attorney they hired to orchestrate so-far unsuccessful climate change litigation against the oil industry.
The appeal comes after a Texas judge found the cities and counties were hypocritical in suing Exxon. They had claimed doom to their infrastructures will be caused by rising sea levels, but when issuing bond offers to potential investors, they had neglected to mention this alleged, near-certain destruction, the judge ruled.
By targeting Texas’ biggest commercial market with climate change litigation, the California cities and counties may have opened the door for Exxon to retaliate on its home turf.
“No state comes close to Texas when it comes to the fossil fuel industry,” said Exxon attorney Ralph Duggins, a partner at Cantey Hanger. “(Climate change suits) affect Texas’ biggest commercial market – that’s oil.”
Last January, Exxon filed a petition in Tarrant County District Court in response to the climate change litigation, seeking pre-suit discovery for a potential lawsuit against the California municipalities and officials and also Matt Pawa, a Hagens Berman attorney who is pursuing many of the cases on a contingency fee.
During oral arguments, the California municipalities argued Texas lacks jurisdiction, as they do not conduct business in the state and if Exxon wished to conduct discovery, it could do so in the California litigation. The cases of San Francisco and Oakland have already been dismissed by a federal judge, while the other cases have been remanded to state court. All of those decisions are being appealed.
Texas leads the nation in crude oil reserves and production and is home to more than one-third of all U.S. crude oil proven reserves, according to the U.S. Energy Information Administration.
Duggins argued the California climate change suits were crafted using a “playbook” to alter Big Oil’s viewpoint on climate change and “pressure the oil industry through litigation to change to renewable (energy).”
Climate change lawsuits, brought under the public nuisance theory, allege fossil fuel companies contributed to global warming-induced sea level rise and seek damages for past and future natural disasters, such as flooding.
Pawa, the Hagens Berman attorney named in Exxon’s petition, was purportedly instrumental in creating the “playbook” that includes efforts by the attorneys general of New York and Massachusetts.
Exxon believes Pawa promoted his playbook to California municipalities, urging them to become potential plaintiffs in tort litigation against energy companies.
If the Second Court rejects the appeal, Exxon would then be permitted, barring an appeal to the Texas Supreme Court, to continue its quest to depose Pawa and the California municipalities – laying the groundwork for the counter-lawsuit.
Exxon’s petition alleges the California municipalities engaged in a civil conspiracy by planning and then filing climate change lawsuits in California against co-defendants Chevron, BP, ConocoPhillips and Royal Dutch Shell.
In response to Exxon's petition, the municipalities filed special appearances, challenging the Texas trial court’s jurisdiction.
On March 14, Judge R.H. Wallace Jr., 96th District Court, denied all of the special appearances, prompting the appeal, court records show.
On July 6, the cities of San Francisco and Oakland filed individual briefs, while several other municipalities and officials banded together to file a collective brief.
Oakland argues in its brief that the trial court erred in accepting Exxon’s argument that the climate change lawsuits targeting oil companies “somehow should be deemed to be targeting Texas itself.”
The collective California public entities - the cities of Imperial Beach and Santa Cruz, along with the counties of Marin, San Mateo and Santa Cruz - contend that they have no offices in Texas or do business in the state.
The municipalities argue Exxon failed to meet its burden of establishing personal jurisdiction under the Texas long-arm statute, which allows the exercise of personal jurisdiction over a non-resident defendant.
Conversely, Exxon contends the trial court’s findings are “well supported by the law and ample evidence” and says its potential claims grow out of the “abusive litigation” brought by the California municipalities.
“The record shows that the Potential Defendants made purposeful contacts with Texas to chill expressive conduct in Texas and to obtain documents stored in Texas,” Exxon’s Sept. 26 appellate brief states.
“ExxonMobil’s potential claims arose from the Potential Defendants’ purposeful contacts with Texas, including their efforts to suppress speech and associational rights within the state and obtain documents stored within the state.
“The Texas long-arm statute authorizes personal jurisdiction over nonresidents who commit a tort in whole or in part in the state.”
Exxon asserts the California parties seek the documents to pressure energy companies “to modify or silence their views on climate change.”
“Appellants’ unpersuasive attempts to challenge the trial court’s decision fall flat,” Exxon’s brief states. “The Potential Defendants purposefully directed their conduct at Texas by filing baseless lawsuits against ExxonMobil that are expressly aimed at Texas-based speech, property, and associational rights.
“ExxonMobil urges this Court to affirm the trial court in all respects.”
Exxon is represented in part by Duggins of Cantey Hanger and Nina Cortell of Haynes & Boone.
The collective appellants are represented by Pete Marketos and Tyler Bexley, attorneys for the Dallas law firm Reese Marketos.
Oakland is represented in part by the Law Office of Steven K. Hayes in Fort Worth.
San Francisco is represented in part by Robert Manley and Richard Kamprath, attorneys for the McKool Smith law firm in Dallas.
Appeals case No. 02-18-00106-CV
Trial court case No. 096-297222-18