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The Climate Change Inquisition, Part II—The Scandal Unfolds

Margaret A. (Peggy) Little April 20, 2016
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The concerted investigation against ExxonMobil (Exxon) and organizations deemed “climate change deniers” currently being conducted by the “Green 20” AGs (all Democrats and one Independent), represents a threat to core constitutional commands of free speech, limited and constitutional government and the rule of law. This latest incarnation of regulation by litigation which seeks to punish climate change wrongthink has crossed a line that lies at the core of the First Amendment—a government imposing its orthodoxy upon its citizens. Declaring the need for “transformational” action on climate change as a settled question, Virgin Islands’ AG, Claude Earl Walker, announced, “We cannot continue to rely on fossil fuel. Vice President Gore has made that clear.” (Glad that’s all settled!)

As the United States Supreme court has noted: “If there is any fixed star in our constitutional constellation, it is that no official, high or petty, can prescribe what shall be orthodox in politics, nationalism, religion, or other matters of opinion.” Further, punishing Exxon for its own research that expresses concern about climate change disincentivizes research and development and criminalizes the expressions of doubts, theories and concerns that are essential to the scientific method.

Because this campaign is in a fairly nascent state, now is the time to engage in a thorough examination of its premises, test its legalities, investigate its origins, and examine any political, cultural, ideological, financial, scientific and media interests and recent templates upon which this campaign is expressly modeled.

Some Background

Intimations of this chilling campaign to establish “consensus” through intimidation first surfaced in the spring of 2015 when Sen. Sheldon Whitehouse called upon the Justice Department to bring civil RICO charges against those spreading heretical views on global warming, including the energy industry, trade associations and conservative policy institutes and scientists. In September, right on cue with the next presidential election campaign, letters from 20 climate scientists and two congressmen, Reps. Ted Lieu and Mark DeSaulnier, were sent to Attorney General Loretta Lynch asserting that Exxon “systematically misled the public” about climate change even while its research allegedly confirmed those dangers and urged her to launch a “federal probe” of Exxon, a request that was promptly endorsed by Bernie Sanders and Hillary Clinton. Shortly thereafter, New York Attorney General Eric Schneiderman issued subpoenas and launched a state investigation under New York’s Martin Act and California Attorney General Kamala Harris launched a similar investigation. The March 29 news conference expanded this to a sizeable minority of states, only to draw a swift riposte from a much larger group of 29 state AGs levelling sharp criticism at the arrogation of power, suppression of dissent and disdain for the First Amendment it represents.

Exxon Suit in Texas

Late last week, Exxon struck back, filing suit against Virgin Islands AG Claude Walker and his contingency fee counsel, Cohen & Milstein, and its lead partner Linda Singer, in a complaint that, if true, unmasks a widespread state-sponsored scandal with far-reaching implications for the politicians who have undertaken the investigation.

The Subpoena and its Server

One of the odder aspects of this inquisition, was the prominence and lead investigatory role given to Virgin Islands’ AG Walker, who, a few days before the splashy conference, had authorized slow-boat service of a broadside subpoena by Cohen Milstein upon Exxon and others, giving the targets one month to cough up 40 years of company records on anything to do with climate change, despite the fact that the parties subpoenaed had no corporate presence in the Virgin Islands. Was this tiny and remote jurisdiction chosen because of a friendly bench, or as Walter Olson has queried, the burdensome logistics, difficulty in engaging local counsel willing to contest jurisdiction and take on its AG, or some other reason?

Exxon’s suit asserts that the subpoena violates ExxonMobil’s constitutional rights of freedom of speech, freedom from unreasonable searches and seizures, due process of law and constitutes a common law tort of abuse of process. Quoting liberally from the heightened language of the March 29 news conference (more on that below), the suit avers that the subpoena is “a pretextual use of law enforcement power to deter ExxonMobil from participating in ongoing public deliberations about climate change and to fish through decades of…documents with the hope of finding some ammunition to enhance [these AGs'] position in the policy debate.” In a recent editorial in USA Today, Glenn Harlan Reynolds adds a compelling argument that inasmuch as “[f]ederal law makes it a felony ‘for two or more persons to agree together to injure, threaten, or intimidate a person in any state, territory or district in the free exercise or enjoyment of any right or privilege secured to him/her by the Constitution or the laws of the Unites States, (or because of his/her having exercised the same),’” these state and territorial AGs are themselves engaged in unlawful conduct.

One of the most intriguing aspects of Exxon’s complaint, which makes for compelling reading, is the background of the lawyers—on both sides.

All the King’s Lawyers

Cohen Milstein, a DC operation that bills itself a “pioneer in plaintiff class action lawsuits” and “the most effective law firm in the United States for lawsuits with a strong social and political component,” has a state AG practice headed by partner Linda Singer, former AG of the District of Columbia. The New York Times has profiled that firm’s solicitation of state AGs to bring class action and mass tort suits from which the outside contingency fee counsel richly benefit. Exxon asserts that Cohen Milstein’s probable contingency fee deal with AG Walker in this investigation, and its contingency fee contracts in other related cases, which include a startling pattern of alleged misconduct and misrepresentation by Cohen Milstein and its co-counsel in fabricating plaintiffs and claims, bribing witnesses, and making false statements to the court and others, means that Cohen Milstein cannot be the neutral, disinterested prosecutor required by due process under both state and federal constitutions.

Such conduct includes:

  • A lawsuit brought against Hess Oil Company in which Cohen Milstein and Singer received $15 million in contingency fees from an $800 million settlement used, AG Walker states in recently produced FOIA documents, to create an environmental response trust and promote solar power.

  • Cohen Milstein’s Alien Tort Statute (ATS) suit with co-counsel Terrence Collingsworth in Indonesia alleging that ExxonMobil aided and abetted human rights abuses during an Indonesian Civil war, conduct vigorously denied by Exxon.

  • A record of Collingsworth’s misconduct in fabricating plaintiffs and claims, bribing witnesses, and making false statements to courts and counsel designed to conceal payments to witnesses.

  • Ongoing discovery in the ATS matter in which Exxon is attempting to discern whether Cohen Milstein and its co-counsel have paid witnesses or engaged in other improper activity.

Setting aside these allegations of self-interested, disturbing and/or unethical practices, Exxon asserts that the state AGs' “delegation of this investigation—which carries penalties available only to governmental prosecutors—to a private law firm acting on a contingency-fee basis…cannot be reconciled with the Fifth Amendment’s requirement that only a neutral and impartial prosecutor can satisfy due process.”  

Contingency fee contracts confer a direct and personal financial stake in the outcome upon outside counsel prosecuting these actions for the states. As I have published elsewhere, state and federal Supreme Courts have consistently held that the appointment of an interested prosecutor fundamentally undermines the integrity of a judicial proceeding, violates due process, and further, that the “mere existence” of such an unethical situation “calls into question the conduct of an entire prosecution.” Young v. United States, 481 U.S. 787, 808-814 (1987).  

The Defense Team

Having published extensively on the gravity of this due process problem for years, imagine my surprise when I discover that the attorneys asserting these (correct) arguments, include Ted Wells and Michele Hirshman of Paul Weiss. Could this be? These are Eliot Spitzer’s former attorneys, and in the case of Hirshman, Spitzer’s right hand “first deputy” of the New York AG’s office from 1999 to 2007, which was itself a pioneer in the phenomenon of regulation by litigation. This is worth watching closely, since the New York AG’s office not only entered into such arrangements but defended them against later legal and public policy challenges. As Adam Liptak of the New York Times has thoughtfully noted, the due process violations rife in these arrangements remain an enduring and important public policy concern. One can only hope that these state AGs, by so flagrantly crossing the line of prosecuting climate change wrongthink, may force restoration of these core constitutional principles and  the centrality of prosecutorial neutrality to due process rights recognized by state and federal high courts.

Hush little baby, don’t say a word

Emails recently obtained by Energy & Environment Legal Institute (E&E Legal) show that attorney Matt Pawa, whose firm, like Cohen Milstein, represents state AGs in pay-to-play contingency fee climate change and energy lawsuits that have come under criticism, and Peter Frumhoff with the Union of Concerned Scientists were invited to secretly brief the state AGs before the March 29 press conference with Al Gore, to arm the AGs with arguments on “the imperative of taking action now” on “climate change litigation.” The emails include a disturbing communication in which NY AG Schneiderman’s office urged the climate activists with whom they were working to deceive the press about their involvement: Specifically, Pawa emailed Lem Srolovic, chief of the NY AG’s Environmental Protection Bureau and Scot Kline, a VT Assistant AG, expressing concern about how to respond to an inquiry from a Wall Street Journal reporter: “What should I say if she asks if I attended?” Srolovic replied “My ask is if you speak to the reporter, to not confirm that you attended or otherwise discuss the event.”

Nice. Especially when you look at where the money goes in these cases, and specifically that Pawa’s deals with state AGs "can enrich lawyers at the expense of taxpayers and raise concerns about ‘pay-to-play’ conflicts of interest, the use of a public entity for personal gain and fairness in prosecutions." Another of the documents uncovered by the E&E Legal’s FOIA request shows that Virgin Islands AG Walker informed the NY AG that his $800 million settlement with Hess Oil would be used to create an “environmental response trust” and promote solar power and he was interested in using the coalition to identify “other potential litigation targets” and “ways to increase our leverage.” A visit to Pawa’s law firm website shows that his office is deeply entrenched in contingency fee arrangements with state AGs, all of which implicate the same due process and ethical concerns. E&E Legal’s press release also identifies Pawa as an environmental lawyer who works with the Climate Accountability Institute and the Global Warming Legal Action Project of the Civil Society Institute.

The Inquisitors’ Tone

The tone taken by these attorneys general at their March 29th press conference with Al Gore reveals all. The calculated hysteria whipped up by Gore’s linkage of natural disasters and the spread of the Zika virus to climate change, was followed by the state AGs startling descriptors of their quarry—“morally vacant forces,” destroyers of this earth, planet destroyers, existential threats, deceivers! Walker announced his offices launch of “an investigation into a company that we believe must provide us with information about what they knew about climate change, and when they knew it,” a catchy formulation that was a verbatim echo of NY AG Schneiderman’s tone of climate McCarthyism.   

This vituperative language calls into question these regulators impartiality and professional ethics and rises to abuse of the powers of the office of attorney general. Gore thrummed a bass-line of “fraud” and sensationalized recent weather news as “a nature hike through the Book of Revelation.” Somehow the rise of new diseases that Gore never heard of when he was growing up can be attributed to fossil fuel use (junk science, anyone?). NY AG Schneiderman closed the news conference with a litany of billions and billions of dollars of damage.

A 1999 interview in The New Yorker of John Coale, a veteran of “Wars on Tobacco” and “The Gun Wars” and other self-styled military assaults on the rule of law, reveals the baldly political strategy of these state AG suits:

You just stir things up . . . . I mean, look, the gun issue’s all over the place now. A year ago, it wasn’t. You just stir it up, and there ain’t nothing like a good fight to stir it up. We’ve got bills now flying all over Congress . . . . We’ve got Bob Barr introducing a bill that would probably electrocute me (ha-ha-ha), and you’ve got Barbara Boxer coming in with ‘Well, whatever your bill says, my bill says the opposite.’ You’ve got Torricelli, you’ve got Patrick Kennedy, you’ve got all this activity. And we’re stirring it up. And we stir it up and stir it up, and you know what happens? Eventually, the industry has to see us as the only reasonable people in town. It ain’t gonna be reasonable up on that Hill. And we are reasonable (ha-ha-ha). That’s what it comes down to.

The New Yorker writer concluded that these massive, concerted lawsuits, regulatory activity, and Congressional action are "something entirely new in the public area—not so much a lawsuit as a declaration of a culture war" on corporate enemies. The modus operandi of these new choses in action is to demonize a corporate target, pathologize their business activity, and then propose governmental litigation as a cure. Amass enough suits with a complicit PR campaign, the industry will settle and fill the treasuries of the states and their contingency fee lawyers.

These extortionate suits are cynically Made to Settle. Professor G. Robert Blakey, a RICO consultant engaged by the Department of Justice to plan the federal tobacco lawsuit, frankly admitted, "this case is not made to win, it’s made to settle." Both the state and its contingency fee outside financiers are thus in a position to reap enormous rewards with no risk of judicial precedents that would stem the tide of other, like initiatives against other industries. A state is a subsidized political plaintiff, driven by interest groups and ideology and its officers’ political ambitions; it can afford to bring a weak case and pursue it more vigorously than could any private plaintiff. Further, the arsenal of remedies at its disposal—consent decrees, injunctive relief, enforcement powers available under its consumer protection, trade practices and antitrust statutes—are simply not available to a private tort plaintiff. All of which underscores why these contingency arrangements violate the targets’ due process rights.

Storming the Parchment Barriers

Will it be sufficient to mark, with precision, the boundaries of these departments, in the constitution of the government, and to trust to these parchment barriers against the encroaching spirit of power?

 James Madison, Federalist No. 48

Into the chaos of this orchestrated apocalypse, the Green 20 propose to save the day by correcting what they deem to be a legislative failure created by gridlock in Washington. Gore asserted “our democracy’s been hacked … but if the Congress really would allow the executive branch of the federal government to work, then maybe this would be taken care of at the federal level.”

The profound constitutional illiteracy demonstrated in that confused utterance by private citizen and non-lawyer Gore is in fact a bold confession that this minority coalition of state attorneys general is engaged in a coordinated and lawless assault on state and federal constitutional separation of powers. Gore is tragically, ironically correct—our democracy is being hacked—by Gore and the Green 20.

It is perhaps heretical to note here that Citizen Gore is just that—a private citizen possessing zero scientific or legal credentials to lend any authority to his bizarre pronouncements. It is also perhaps heretical to point out that a state attorney general is the state’s lawyer, that and no more, and his or her job is the enforcement of existing laws, not lawmaking.   

Regulation by LitigationA Primer

This derogation of our constitutional order, called regulation by litigation by Robert Reich who also predicted its abuse, was first conceived (as Gore acknowledged) in the 1990s under the Clinton administration, fueled by unlawful and unconstitutional wealth transfers between the government officials who outsource their power to the private bar who typically subsidize the effort in return for lavish contingency fees. Regulation by litigation, a phenomenon conceived in hubris and steeped in corruption, occurs when a confederacy of state attorneys general, organized sectors of the bar, and advocacy groups collapse executive and legislative functions advancing novel theories of liability in order to legislate and tax heretofore lawful and, in this instance, constitutionally protected conduct. These 20 state lawyers are engaged in a naked political campaign to impose their views of climate change on the entire United States, ludicrously cloaking their imperious foray as the answer to a Congressional void crying out for their heroics.

Nearly two decades ago, the tobacco tycoons called themselves the “Fourth Branch,” a non-existent but hugely lucrative government job. As I argue in a forthcoming book, Bernard Bailyn’s seminal scholarship in The Ideological Origins of the American Revolution, which I paraphrase and quote from here, shows that “it was a central theme and obsessive concern of the Founders to design their government to prevent the ministerial corruption that plagued England and the continent, where the executive distracted the legislature from its proper function, where executive ministers installed their cronies in positions to abuse government power and bestow upon them lavish sums of money wholly beyond the legislature’s oversight and control, ‘where places and employments which ought not to be sold at all are sold for treble value,’ with the payment falling upon a public which is wholly unaware of these transactions. They even coined a term for the phenomenon—Robinarchy—where government ministers arrogate sovereign powers to themselves and ‘admit no person to any considerable post of trust and power under him who is not either a relation, a creature or a thorough-paced tool whom he can lead at pleasure….It loads the people with taxes to pay for all of this largesse.’” It was of the utmost importance to the colonists to structure a government that would prevent such ministerial corruption. By separating powers, and providing for principles of the public fisc that prohibit money flowing to or from the government outside of legislative appropriations they did so.

Not only does this political maneuver arrogate powers to the state AGs that they do not constitutionally possess, their concerted action in hopes of such a settlement like that achieved in the tobacco wars is a quest for an agreement that would constitute a per se violation of the Compacts Clause of the United States Constitution.

Dynastic Ironies and Real Life Economies

The great thing about irony is that it splits things apart, gets up above them, so we can see the flaws and hypocrisies.

David Foster Wallace

The Wall Street Journal recently reported that the state AG investigation was hatched in January 2016 behind the closed doors of—the Rockefeller Family Foundation. Attendees included environmental activists who helped lead the successful block of the Keystone XL pipeline. Sharon Eubanks, a Clinton administration DOJ veteran of the tobacco wars asserted at that meeting that a civil RICO lawsuit against Exxon is “viable.” The host foundation and attendees set as goals “to establish in public’s mind that Exxon is a corrupt institution that has pushed humanity (and all creation) toward climate chaos and grave harm.” Heightened language again.

Frustrated by what they see as inadequate legislative success, the group encouraged state AGs and the U.S. Justice Department to launch investigations and lawsuits to change Exxon’s conduct, pay damages, and finance entities with the correct views on climate change. Lee Wasserman, Director of the Rockefeller Family Fund opined, “It’s about helping the larger public understand the urgencies of finding climate solutions. It’s not really about Exxon.”

Where to begin? A campaign to expose Exxon as a corrupt institution is not about Exxon? An investigation against Exxon being reviewed by the FBI and urged upon U.S. AG Loretta Lynch by Hillary Clinton and Sen. Sheldon Whitehouse? A racketeering lawsuit against Exxon proposed by a DOJ lawyer? And this campaign is to be financed in part by the Rockefeller Family Fund heir to the Standard Oil (Exxon’s predecessor) fortune?

Lenin notably said that the capitalists will sell us the rope with which we will hang them. That the foundation funded by the wealth of Standard Oil is now hosting meetings that represent an intergenerational cycle of self-destruction is full of more ironies and dynastic dysfunction than can be unpacked in this space. But the tragicomic locus of planning of this coordinated attack does not affect just one imploding family, but an entire nation and its rule of law. To put it another way, if the Rockefeller heirs want to engage in state-assisted suicide, please don’t take the rest of us with you.

One of the few bright components of the post-recession economy is low fuel prices, an economic factor that impacts virtually every segment of an economy. This unvarnished money grab by a minority of states asserting a despotic certainty about the relevant science is guaranteed to be borne by the American public in the form of higher energy costs with negative effect on an already sluggish economic recovery. If successful, it will lead to an unlegislated tax on the very commodity which has helped fuel this nation’s economic recovery.

In a prior post on this topic, I described this as state regulatory confiscation from private industry. But, in fact it is much worse than that. After the tobacco settlement, the cost of tobacco products rose by the largest percentage ever in the history of tobacco use. The tobacco settlement was, to quote MIT Professor John Gruber, “a tax because it’s a set of payments made by tobacco companies that depend on how many packs they sell"; in short, it looks like a tax and quacks like a tax. The billions upon billions in damages sought by AG Schneiderman through this regulation by litigation will ultimately be paid by the American public in higher gas and fossil fuel prices—essentially an unlegislated tax on the very commodity the low price of which has helped fuel economic recovery. If we wish to impose a tax on fossil fuels—which Exxon supports—that is the sole province of a legislature—which incidentally does not need to pay contingency fees to anyone to pass.

A legislated carbon tax means that the people paying for it will be represented. One of the great injustices of the tobacco settlement was that the attorneys general and their lawyers engineered the collection of cruelly regressive taxes, levied in stealth, siphoning off enormous sums to lawyers hired under contingency fee contracts that do not withstand legal scrutiny.

Much has been written about the chilling effects upon First Amendment rights by this initiative. But this is an equally chilling betrayal of our structural constitution which limits the executive—the branch of government represented by all of these state AGs—to the enforcement of existing laws. To quote Al Gore: Our democracy is being hacked.

Questions? Reactions? Email blog@fedsoc.org with your response to continue the conversation. Select comments may be published on the blog.

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