What began with an investigation by NY AG Eric Schneiderman, later joined by California AG Kamala Harris, has become a multistate AG investigation into Exxon's knowledge of the contributions of fossil fuels to climate change going back as far as 1977. On March 29, 2016, AGs from Massachusetts and the Virgin Islands announced that they were joining with the NY and CA AGs. Significantly, the announcement came at a press conference in which the AGs of fifteen states, the District of Columbia, and the Virgin Islands pledged support for the Obama administration's Clean Power Plan.
AG Schneiderman's investigation, announced in November 2015, contemplated use of the Martin Act, N.Y. Gen. Bus. Law § 352, a 1921 statute that grants very broad authority to the NY AG to investigate any suspected "device, scheme or artifice to defraud," or "deception, misrepresentation, concealment, suppression, fraud, false pretense or false promise" related to the sale of securities or commodities. The purpose of the Act is "to defeat all unsubstantial and visionary schemes [] whereby the public is fraudulently exploited," including those "not originating in any actual evil design or contrivance to perpetrate fraud or injury upon others, which by their tendency to deceive or mislead the purchasing public do come within the purpose of the law." People v. Federated Radio Corp., 244 N.Y. 33, 38-39 (1926).
The addition of new AGs to the investigation brings the possibility of employing additional state or territorial laws similar to the Martin Act, with respect to both consumers and investors. Massachusetts, of course, has a broad consumer protection statute, M.G.L. c. 93A, which declares unlawful all "[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce". Such methods are not defined by statute because, as the Supreme Judicial Court has noted, when it comes to potentially deceptive practices, "there is no limit to human inventiveness". Kattar v. Demoulas, 433 Mass. 1, 13 (2000). The Virgin Islands likewise prohibits "unfair methods of competition or unfair or deceptive trade acts," with the instruction that the law "shall be liberally construed to protect the consuming public". V.I. Code 12A, §§ 302, 304. These statutes are in addition to state laws governing the sale of securities, such as M.G.L. c. 110A.
The announcement illustrates the close tie between AGs that have announced investigations and the broader coalition of AGs interested in climate change issues and the Clean Power Plan. It is possible that investigation into Exxon and similar firms could expand among this coalition in the future.
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