Massachusetts Supreme Judicial Court: Attorney General's Exxon Investigation Can Proceed

On April 13, 2018, Massachusetts' highest court ended a significant chapter in Exxon's long-running dispute with Attorney General Maura Healey. In 2015, Healey issued a Civil Investigative Demand regarding Exxon's knowledge of the effects of fossil fuels on climate change. Exxon then undertook what a federal judge in New York last month called "a sprawling litigation involving four different judges, at least three lawsuits, innumerable motions and a huge waste of the [New York and Massachusetts] AGs' time and money." (You can read a full analysis of that decision by my colleague Seth Jaffe here.) Exxon's actions in Massachusetts' courts have been mercifully compact, involving only one hearing in Superior Court and one hearing at the SJC (which had taken the appeal directly on its own motion). The outcome is unsurprising, but the SJC's opinion is worth analyzing as a loud and clear statement to would-be challengers of CIDs: they face a daunting task.

Massachusetts' long arm statute allows out-of-state entities to be brought into court if they have sufficient ties to the state. Exxon alleged its ties were insufficient, citing a franchise agreement with roughly three-hundred Exxon-branded gas stations in Massachusetts but no direct business in the Commonwealth. The SJC, citing Exxon's ability to control advertising of its products in the franchise agreement, held that Exxon's contacts were enough, particularly because the AG's apparent theory of liability rests in part on advertising. Exxon also argued that the...