New York’s highest court dealt ExxonMobil a major blow Tuesday when it declined to hear the oil giant’s appeal to block New York Attorney General Eric Schneiderman’s subpoena seeking audit documents in an ongoing fraud investigation of what “Exxon Knew” about the link between fossil fuels and climate change.
The Court of Appeals refused to hear Exxon’s assertion that the documents were protected under “accountant-client confidentiality” under state law in Texas, where the company is headquartered.
The order affirms that state officials can demand Exxon’s auditor, PricewaterhouseCoopers (PwC), to immediately turn over the subpoenaed documents.
A memo from the Attorney General’s office states:
“The New York Court of Appeals denied Exxon’s request for further review of its claim that an accountant-privilege under Texas law allowed Exxon to withhold documents responsive to a subpoena issued to Exxon’s independent auditor, PwC. The Court of Appeals also dismissed as moot Exxon’s motion for a stay pending appeal. Exxon’s legal claims had been rejected twice previously by lower state courts.”
The court did not include an explanation of its decision.
The finding affirms a Manhattan court’s ruling last year that: “New York does not recognize an accountant-client privilege, and controlling authority holds that: ‘The law of the place where the evidence in question will be introduced at trial or the location of the discovery proceeding is applied when deciding privilege issues,'” as Judge Barry Ostrager wrote.
Exxon has not yet released a comment.
“Today’s Court of Appeals order affirms that Exxon and its outside auditor have an obligation to produce all the documents that our office rightfully subpoenaed,” Schneiderman said in a statement.
“As we’ve said from the start, Exxon had no legal basis to interfere with PwC’s production,” he added. “Our fraud investigation continues to move full speed ahead, despite Exxon’s continued strategy of delay.”
According to InsideClimate News, “Schneiderman’s subpoena seeks PwC records from 2010 to the present related to risks to Exxon’s profits from regulations limiting the emission of greenhouse gases, policies discouraging the use or development of fossil fuels; and the potential effects of climate change on the price of oil, gas, and other hydrocarbons.”
The legal development comes shortly after Harvard released a breakthrough study of Exxon’s internal and external communications on climate change, including scientific research, internal company memos and paid editorial features in the New York Times.
As Climate Nexus noted from the study: “The analysis showed a ‘quantifiable discrepancy’ between internal and external communications, with 81 percent of external advertisements casting doubt on the link between human activity and climate change despite 80 percent of internal communications acknowledging climate science.”
The court’s decision was cheered environmental advocates including Climate Hawks Vote president RL Miller, who said, “Exxon knew, and now the world will know.”
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