Exxon Mimics Big Tobacco’s First Amendment Plea

ExxonMobil’s claim last week in a Texas court that the First Amendment bars an attorney general’s investigation into its history of climate denial is probably a loser.

Big Tobacco tried to use the First Amendment defense to shield itself when the U.S. Department of Justice sued the cigarette makers for conspiring to mislead the public about smoking’s dangers under the federal racketeering law or RICO.

But federal courts came to a simple conclusion: The constitution doesn’t protect fraud.

That was the opinion of the judge who tried the government’s RICO case, and of the United States Court of Appeals for the District of Columbia, the nation’s second highest court, which issued a scathing opinion upholding the trial judge’s ruling that Big Tobacco’s long history of denial of cigarettes’ lethality was a deliberate lie intended to defraud the public and therefore not protected speech.

“Of course, it is well settled that the First Amendment does not protect fraud,” the appeals court noted.

Old Tobacco Hands

ExxonMobil raised the First Amendment defense when it sued in Tarrant County, Texas on April 13th.  It argued that a subpoena by the attorney general of the Virgin Islands charging it with violating the V.I.’s Criminally Influenced and Corrupt Organizations Act, its version of RICO (the Racketeer Influenced and Corrupt Organizations Act),  is politically-motivated and should be quashed as a violation of ExxonMobil’s constitutional right to participate “in ongoing public deliberations about climate change…”

(Theodore Wells Jr., a lawyer on ExxonMobil’s Texas action, was co-lead counsel for Philip Morris, the biggest tobacco company in the world, during the federal government’s RICO case.)

In addition to ExxonMobil, the Virgin Islands has subpoenaed records from the Competitive Enterprise Institute, a think tank in Washington, D.C. that received substantial amounts of money from ExxonMobil to promote climate denial.

In its subpoena to ExxonMobil, the Virgin Islands charges the company with “misrepresenting its] knowledge of the likelihood that [its] products and activities have contributed and are continuing to contribute to Climate Change in order to defraud” the government and consumers of the Virgin Islands.

Politics and Fraud

ExxonMobil’s lawsuit is part of a recent campaign, mostly conducted in the media, to push back against action by several attorneys general to hold the company accountable for promoting the denial of legitimate climate science.

A recent article in the Wall Street Journal about ExxonMobil’s legal counter-attack also aired the charge, detailed at length in the company’s Texas lawsuit, that a March 29th meeting of 17 attorneys general was “a politically motivated event, urged on by activists intolerant of contrary views.” Four of the 17 attorneys general are investigating ExxonMobil and potentially other fossil fuel companies for denying what they knew was the truth about global warming.

“Frustrated by the federal government’s inaction” on climate, Exxon argued in its Texas lawsuit, the attorneys general are illegimately trying to use the legal process to force change. The result will be to chill legitimate debate about climate.

The tobacco companies made a very similar argument in fighting the the Department of Justice’s RICO lawsuit, and also in lawsuits by all 50 state attorneys general, where the companies contended that government law enforcement officials were in league with anti-tobacco activists and plaintiff’s lawyers.

“The fundamental issue raised by this suit is whether, after repeatedly failing to achieve its goals through the regulatory and legislative processes, the government may exploit RICO’s civil injunction provision…to achieve through litigation what it failed to achieve politically,” the industry argued in its unsuccessful appeal of the trial court’s RICO decision.

Just as ExxonMobil now claims the Virgin Islands and other attorney general actions would “chill” legitimate public discussion of climate issues, the tobacco companies argued in their RICO appeal that:

“Congress did not enact, and that the First Amendment would not permit Congress to enact, a law that so criminalized one side of an ongoing legislative and public debate because the industry’s opinions differed from the government or ‘consensus’ view.”  [Emphasis mine.]

It is worth noting that that language could have been lifted verbatim from a climate denial organization’s defense of its alleged “free speech” rights.

Speech: Free vs. Expensive

Yet in the tobacco case, a very conservative District of Columbia appeals court resoundingly rejected that view. That court was led by Chief Justice David Sentelle, who Reagan appointed to replace Antonin Scalia, and Sentelle was joined in the decision by the other two justices, one a conservative Republican appointee from a tobacco-growing state. The industry then appealed to the Supreme Court, which refused to hear the case, probably because the Court’s conservative majority was persuaded by such a strong unanimous ruling by an equally conservative appellate court.

The tobacco litigation spawned a federal court appellate decision – which the Supreme Court allowed to stand – finding that only statements made directly to legislative or regulatory bodies are constitutionally protected.  But most of the cigarette industry’s time and money was spent on what the courts declared was a fraudulent campaign to influence public attitudes on smoking.

It may not bode well for ExxonMobil’s “free speech” argument that other fairly recent cases have drawn a similar distinction between protected political speech by corporations and commercial speech intended to enhance profits.

One such action was brought by a political activist in California who sued Nike for falsely claiming its overseas workers were decently paid and enjoyed good working conditions. The activist said this amounted to an unfair business practice, using false statements to shore up Nike’s image to increase sales.

Nike argued its messaging campaign simply presented its side in a dialogue on a matter of public concern. The California Supreme Court disagreed. It held that no First Amendment protection applies to Nike’s false statements because they were commercial speech.  The U.S. Supreme Court refused to hear the case in spite of appeals from Nike and several supporters, including ExxonMobil, advocating their right to blur the lines between fact and fiction in the name of public debate.

Posted by Dan Zegart