The New Eco Tyranny

Last week, the attorneys general of 20 states met at a conference “dedicated to coming up with creative ways to enforce laws being flouted by the fossil fuel industry,” in the words of the conference’s host, New York Attorney General Eric Schneiderman. The environmental website Ecowatch called it “an unprecedented, multi-state effort to investigate and prosecute” oil companies that the AGs say “stymied attempts to combat global warming.”

This followed U.S. Attorney General Loretta Lynch’s disclosure early last month that the Justice Department had discussed pursuing civil action against so-called climate-change deniers, and she had “referred it to the FBI to consider whether or not it meets the criteria for” an investigation under the Racketeer Influenced and Corrupt Organizations (RICO) Act of 1970.

This attempt to punish opposition to climate-change regulations is shocking. The First Amendment protects such opposition, including corporate lobbying. Under the Supreme Court’s Noerr-Pennington doctrine, lobbying is protected even if it reflects a bad motive, or makes false claims.

The state AGs seek to hold ExxonMobil and other oil companies “accountable” for “fraud and suppression of key climate science.” They argue that Exxon somehow reached definitive conclusions about global warming before climate experts did, at a time when climate science was in its infancy, and then withheld this secret knowledge from the scientific community.

Exxon calls these claims preposterous and notes that the company openly shared its research findings in peer-reviewed publications and with the Intergovernmental Panel on Climate Change. The attorneys general also declare that Exxon was deceptive to claim for years that there was no definitive proof of man-caused climate change, even as its business plans took into account oil and gas resources that might be uncovered by melting polar ice caps, and how potential rises in the sea level could affect things like oil rigs. That accusation is a bit like saying a company knew a fire would occur, just because it purchased fire insurance.

Schneiderman began investigating Exxon last fall, subpoenaing documents from the company after learning that Exxon researchers were concerned about climate change decades ago even as Exxon publicly expressed uncertainties about it. (Philip Hamburger’s post on Law and Liberty about the original subpoena is here.) These researchers expected massive increases in temperature over the last 30 years that never came true, as Marlo Lewis and David Middleton have written. But Schneiderman believes Exxon committed fraud by not trumpeting their projections as fact. Following in Schneiderman’s illogical footsteps, his California counterpart Kamala Harris opened an investigation in January, and in March, so did their counterparts in Massachusetts and the U.S. Virgin Islands.

(In fact the Virgin Islands Attorney General, Claude E. Walker, on April 7 issued a subpoena to my employer, the Competitive Enterprise Institute, demanding CEI’s records concerning its work on climate-change policy.)

Even the New York Times seems to view this effort as constitutionally dubious. “Many legal experts have questioned whether the actions and statements by Exxon Mobil can be construed as criminal and outside the protections of the First Amendment,” wrote John Schwartz of the Times.

Schneiderman justified his investigation with the platitude that the First Amendment “does not give you the right to commit fraud.” But courts have struck down laws against “lies” in the political arena. As the Washington state supreme court noted in Rickert v. State Pub. Disclosure Commission (2007), our forefathers “did not trust any government to separate the true from the false for us” in the realm of politics.

A sobering aspect of the state AGs’ crusade is what is taking place outside of courtrooms: they are pressuring companies to cut off donations to nonprofit groups that employ “climate-change deniers.” Being one of those includes telling politically inconvenient truths about the costs of proposed climate-change legislation. It also includes projecting, as several mainstream climatologists have done, lower global temperature increases than liberal state attorneys general find politically convenient.

New York’s and California’s attorneys general have investigated Exxon for making donations to think tanks like the American Enterprise Institute and lobbying groups like the American Legislative Exchange Council. Schneiderman complains that these two specifically are “even more aggressive climate change deniers” than the run of the mill. (Ironically, while these large organizations include a few people labeled as “climate change deniers,” they focus mostly on issues having nothing to do with climate change.)

The First Amendment shields Americans engaged in corporate lobbying and making donations, and even groups that misinform the public about important issues are afforded this protection. In Pfizer v. Giles (1994), a federal appeals court ruled that the maker of an asbestos product could not be held liable for joining and financially supporting a trade association that represented makers of asbestos products, even though that association allegedly “disseminated misleading information about the danger of asbestos in schools directly to” the plaintiffs, where “at least some” of the association’s “activities were constitutionally protected.”

So even if being a “climate change denier” were a crime (rather than constitutionally protected speech, as it in fact is), a donation to a nonprofit that employs such a person would not be a crime.

Contrary to Schneiderman’s claims of fraud, Exxon did not engage in any deception about the health risks of its products when used by consumers (the way that asbestos makers were accused of doing), or in other forms of unprotected speech. Nor did it deny basic science. What angers Schneiderman most may be that Exxon pointed out that climate-change proposals have costs, and that these costs may hamper their political viability.

Schneiderman complains that Exxon noted that “switching over to renewables by the end of this century would raise energy costs” substantially, and that the company “essentially ruled out the possibility that governments would adopt climate policies stringent enough to force it to leave its reserves in the ground, saying that rising population and global energy demand would prevent that.” The smoking gun he points to is Exxon’s statement that “Meeting these needs will require all economic energy sources, especially oil and natural gas.”

Bloomberg News, like the Times, has shown a disinclination to join in this kind of reasoning. Not only that, Bloomberg’s editorial board questions the Schneiderman definition of a “climate denier”:

On the face of it, the company’s research on climate change and its previous public positions on climate policy not only fail to amount to fraud, they aren’t even necessarily at odds. You might accept the reality of man-made global warming and still argue against strict new rules on emissions—if, for example, you believe that such restrictions would do more harm than good. . . . that position isn’t indefensible, and certainly shouldn’t be illegal.

Ironically, it is Schneiderman whose claims about global warming are at odds with actual climate data over the last 30 years, not Exxon.

Investigations by state governments of a company’s donations and its positions on climate-change legislation are legally baseless, because any sanctions imposed on Exxon for them would obviously run afoul of the First Amendment (as newspapers like The Washington Post and USA Today have noted). As the Post’s Robert Samuelson noted, Exxon is being targeted for “expressing its opinions.”

A prolonged governmental investigation in response to someone’s speech—whether or not investigators nab their target in the end—can violate the First Amendment, courts have held. For example, a federal appeals court ruled in White v. Lee (2000) that lengthy, speech-chilling civil rights investigations by federal officials can violate the First Amendment even when they are eventually dropped. It found this principle so obvious that it denied officials qualified immunity for investigating citizens who spoke out against a minority housing project.

Similarly, the 1994 federal appeals court decision cited above (Pfizer v. Giles) found that the mere pendency of a lawsuit against a company for belonging to, and contributing to, a trade association contravened the First Amendment because the lawsuit chilled participation in and contributions to that association. Accordingly, it issued a writ of mandamus dismissing the suit.

These state investigations similarly discourage Exxon from contributing to groups like AEI or ALEC, as well as discouraging Exxon’s own speech about climate-related legislation and its costs. These groups themselves can sue an attorney general under the First Amendment, if the AGs’ pressure on an oil company like Exxon causes them to lose donations they would otherwise have received.

Government officials cannot pressure a private party to take adverse action against a speaker. For example, the federal appeals court in New York ruled that officials could not pressure a billboard company to stop displaying a church’s anti-gay billboard, or pressure a business group not to publish a businessman’s ad in its publication, even though the officials avoided using explicit threats. (See the 2003 case of Okwedy v. Molinari and the 1991 case of Rattner v. Netburn.) And a federal court allowed Google to sue a state attorney general over his speech-chilling investigation in Google v. Hood (2015).

The office of attorney general is a powerful one. What will the effects of these taxpayer-funded investigations be? It’s possible they may lead to skewed estimates of climate change, by intimidating researchers who raise legitimate questions about overly large predictions of warming. They are also a threat to oil companies’ ability to engage in prudent contingency planning that takes into account the maximum possible projections of global warming, without having to publicly tout those projections, which will likely turn out to be inaccurate years later.

The far-fetched nature of these investigations suggests that they are not really intended to uncover legal wrongdoing but to harass. The state of New York wants to subject Exxon to bad publicity and impose on it the costs of producing thousands of pages of documents in response to endless subpoenas. The process is the punishment. That violates the First Amendment.

Hans Bader

Hans Bader is a senior attorney at the Competitive Enterprise Institute. Before coming to CEI in 2003, his prior practice included lawsuits involving the First Amendment, federalism, and civil rights issues.

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Comments

  1. Mark Pulliam says

    This is the New Inquisition. “Climate Change” is an article of religious dogma, and deniers are heretics. These are scary times.

  2. gabe says

    “The state of New York wants to subject Exxon to bad publicity and impose on it the costs of producing thousands of pages of documents in response to endless subpoenas. The process is the punishment. That violates the First Amendment.”

    All that may be true BUT:

    1) Do not be surprised to see the State AG’s “settle” for a considerable cash payout and the ability to further stick their obscenely large noses further under the corporate tent. Perhaps, the AG’s will devise a new formulation for gasoline. Crazy, you say? Take a good look at what the AG’s have done in the power industry – and think again.
    2) It may violate the 1st Amendment – but it does seem to be generally good business for the State AG’s.
    They get name recognition, political clout, lots of cash and get to exercise power over larges swaths of our economy. Heck, they may even parlay this into a governorship (or two or three).

  3. Doug Wenzel says

    The problem here is they are not claiming that they are committing a fraud due to telling lies in political speech; rather, that they are defrauding the investing public by minimizing risks that could affect their future earnings and consequently their stock price going forward by “denying settled science” whatever that is.

    It’s a despicable type of lawfare, but Securities Law coupled with RICO make a potent combinatron that can be easily abused.

    • Doug Wenzel says

      To extend my remarks, they would be accused of knowingly making fraudulent forward-looking statements, along with mail fraud, wire fraud, etc. Sure, it’s a witch hunt, but for the true believers, there are witches to be dunked for the truth, and then burned at the stake.

      • djf says

        What’s so stupid about it is that nobody bought gasoline or stock based on whatever oil companies said about global warming 30 or 40 years ago. For the last 20 years that the global warming hysteria has been going on, and the oil companies have not been contradicting it in their investor relations materials or marketing.

        The bottom line, the Left feels that freedom of speech has served its purpose for their agenda, and they can now dispense with it.

        • gabe says

          dj:

          What? you mean that exclamations of “Fear & Trembling” and the call for *trigger warnings* and *safe spaces* are NOT Free Speech. Mr. Kirkegaard must be rolling in his grave!

          Ahhh! NOW there is a safe space for our young ninnies!

        • says

          that is exactly right. freedom of speech has run its course, now that the “smart” people are in power/control of the country and the people. these are vile human beings, everyone of them.

  4. libertarian jerry says

    Its all about the money. Just follow the money trail. The fact is that many of the States,along with the Federal Government and other smaller political entities,are flat broke. They cannot raise taxes anymore,they can’t go into debt anymore and the States can’t print money. So the only alternative,to keeping the wheels of the government gravy train greased,is to use the Administrative State’s ability to enforce draconian regulations,laws and edicts upon the backs of the productive Economic Class. This scenario is right out of the novel Atlas Shrugged which was written almost 60 years ago.
    Aided and Abetted by a corrupt judiciary the Administrative State through the law enforcement growth industry uses the regulatory state to steal the hard earned fruits of labor of the corporate stock and bond owners along with the employees of American businesses. Where is the capital to come from to create new businesses and thus wealth when that capital is being funneled off to corrupt politicians and their bureaucratic cronies? Is it any wonder that American businesses are moving from State to State or out of the country in order to escape this harassment. In the end there is less and less tax money,jobs and business startups. It always amazes me of the ignorance of most government employees when it comes to who and what creates wealth and raises living standards. They don’t care as long as they get theirs. No wonder America is fast becoming a 3rd World country.

  5. Michael Jay says

    Incredibly disingenuous argument:

    The larger point is not about lobbying; it’s that companies shouldn’t be able to destroy the environment – and also lie about it.

    • djf says

      Right, and the government gets to decide who’s lying. Because we can be sure that the government isn’t lying, at least when prissy progressive martinets like Eric Schneiderman are running it.

    • Tom Judd says

      And anything that disagrees with your ‘opinion’ must be a lie and therefore subject to prosecution. So, that’s the larger point, eh?

    • gabe says

      MichaelJ:

      The weakness of your argument is further amplified by the fact that these eco-zanies are also going after think tanks such as the Competitive Enterprise Institute.

      Clearly, it is only in the MINDS of Progressives that a think-tank (at least not a leftist one) may be said to be “polluting” the environment.

      Aha! -but I suppose that one must do anything to find a safe-space, to include fabricating arguments – legal or otherwise!!!!

      What next? Shall we go after a stock or commodities broker simply because he or she pushed the stock of this miscreant corporations. The shame of it!!!!

  6. Robert Israel says

    We have come full circle, back to the old “error has no rights” justification. The stake is just around the next corner.

  7. sub says

    schneiderman is a POS, and an embarrassment to my people. and i’d love to tell him so to his face. this nonsense will all be struck down, but not after millions have been wasted in defense, propaganda has been levied, lives have been ruined. i wish nothing but ill on the AGs responsible, and on loretta lynch. these people are closeted fascists, and nothing more.

  8. Douglas Levene says

    In a better and more just world, these state (and federal) AGs would be held personally liable for the attorneys’ fees of the people they are harassing and sanctioned even more on top of that pour encourager les autres.

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