The Supreme Judicial Court ruled today that Exxon Mobil has to hand over documents demanded by Attorney General Maura Healey in a probe of whether the company not only sat on information that proved the role of fossil fuels in climate change but actively tried to discredit the science of climate change to preserve its profits.
The ruling may not force the company to hand over the requested documents immediately, because it also has a pending case against Healey in a federal court in Texas.
The oil giant had argued it was not subject to the state's consumer-protection law, under which Healey sought the documents to look at whether the company's alleged deceit harmfully misled Massachusetts consumers, because it was not a Massachusetts "resident" - it is not headquartered or incorporated here and most of its business is done outside the state.
But the state's highest court ruled that the law - which bars "deceptive" practices - covers Exxon Mobil by extension of the state's "long-arm statute," which allows actions here against non-resident companies if they do business with Massachusetts consumers or business. The court noted Exxon Mobile has some 300 gas-station franchises in Massachusetts, which are bound by an extensive franchise agreement written by the company - which gives Exxon Mobile ultimate control over any marketing or advertising those franchisees might do.
This leads to our conclusion that the [AG's document demand] "aris[es] from" the BFA and Exxon's network of branded fuel stations in Massachusetts. G. L. c. 223A, § 3 (a). Through its control over franchisee advertising, Exxon communicates directly with Massachusetts consumers about its fossil fuel products (and hence we reject Exxon's assertion that it "has no direct contact with any consumers in Massachusetts"). This control comports with one of Exxon's "primary business purpose[s]" as expressed in section 13(a) of the [franchise agreement]: "to optimize effective and efficient . . . representation of [Exxon- and Mobil-branded fuel] through planned market and image development." The [AG's demand] seeks information about the nature and extent of Exxon's Massachusetts advertisements, including those disseminated through Exxon's franchisees.
The court continued:
Exxon has purposefully availed itself of the privilege of conducting business activities in Massachusetts, with both consumers and other businesses. As mentioned, Exxon is the franchisor of over 300 Exxon- and Mobil-branded service stations located throughout Massachusetts, and through that arrangement Exxon controls the marketing of its products to Massachusetts consumers. In addition, Exxon admits that it created Massachusetts-specific advertisements for its products in print and radio. Such "advertising in the forum State," especially when coupled with its extensive franchise network, is indicative of Exxon's "intent or purpose to serve the market in the forum State."
The court added it disagrees with the company's assertion that its Massachusetts franchisees "have nothing to do with climate change," at least in terms of letting the Attorney General investigate the climate-change documentation issue:
In order to determine whether Exxon engaged in deceptive advertising at its franchisee stations, by either giving a misleading impression or failing to disclose material information about climate change, the Attorney General must first ascertain what Exxon knew about that topic.
The court also slapped down the company's request that Healey be barred from making the request because she's so obviously biased against it, based on comments she made at a press conference that she is troubled by the company's apparent lying. Exxon Mobile said this violates a state law barring a lawyer from making "prejudicial statements to the public concerning an ongoing investigation."
Nice try, but no, the justices said, because Healey is not just a lawyer, she's also an elected official:
The Attorney General is authorized to investigate what she believes to be violations of [the consumer-protection law]. As an elected official, it is reasonable that she routinely informs her constituents of the nature of her investigations.