Exxon filed suit in April in Texas state court alleging a subpoena from the attorney general for the territory — which sought 40 years’ worth of company documents related to greenhouse gas emissions and climate change — violated its free speech rights, constituted an unreasonable search and seizure and violated its due process rights under the U.S. Constitution. Exxon alleged similar violations of the Texas Constitution.
The Virgin Islands and counsel Cohen Milstein Sellers & Toll PLLC, a defendant in the case, argued in the notice of removal that because the underlying conduct for both state and federal claims is the same, a federal court can decide the case.
“The foregoing state law claims are based on identical conduct and identical facts as ExxonMobil’s federal law claims,” they said.
Exxon did not immediately respond to a request for comment Thursday.
The Virgin Islands investigation centers on whether Exxon misrepresented to investors and consumers what it knew about climate change and whether the company continues to misrepresent the risks of climate change and climate-related regulations to investors in its securities filings and other disclosures. Exxon is accused of civil violations of the Criminally Influenced and Corrupt Organizations Act.
The company denied wrongdoing, and said in its petition CICO violations must have occurred in the past five years, during which time the company has acknowledged the risks of climate change.
Texas and Alabama on Monday filed a motion seeking to intervene in the case on behalf of Exxon, characterizing the Virgin Islands investigation as an attack on Exxon’s right to speak freely about climate change. Texas Attorney General Ken Paxton called the investigation a “fishing expedition of the worst kind,” and “downright un-American.”
“We feel confident about the case, because whether in state court or federal court, the Constitution is the law of the land,” Marc Rylander, a spokesman for the Attorney General, said Thursday. “We are looking at all options and expect justice to prevail — no matter the court.”
The states have also questioned whether Cohen Milstein would be paid on a contingency basis for the firm’s work on the investigation, saying such an arrangement would raise serious due process considerations. They said because the investigation has the potential to turn into a punitive enforcement action, it could be seen as a quasi-criminal case for which contingency payments are not permissible.
Virgin Islands Attorney General Claude Walker, who is leading the investigation, said Monday his goal is to protect consumers and investors in the Virgin Islands. He defended the use of Cohen Milstein, saying it was “entirely appropriate,” especially in light of the fact that Exxon’s annual revenue is five times the gross domestic product of the territory.
Exxon Mobil Corp. is represented by Theodore V. Wells, Michele Hirshman, Daniel J. Toal and Justin Anderson of Paul Weiss Rifkind Wharton & Garrison LLP, Ralph H. Duggins, Philip A. Vickers and Alix D. Allison of Cantey Hanger LLP, Nina Cortell of Haynes & Boone LLP and in-house counsel Patrick. J. Conlon and Daniel E. Bolia.
Walker and Cohen Milstein are represented by Mark Wawro and Lindsay Calkins of Susman Godfrey LLP.
The case is Exxon Mobil Corp. v. Claude Earl Walker et al., case number 4:16-cv-00364, in the U.S. District Court for the Northern District of Texas.
— Editing by Ben Guilfoy.