Continuing Texas GOP Tradition of Defending Big Industry, Paxton Claims an Exxon-eration
Ken Paxton doesn’t get to declare too many victories these days. So he made the most of the news in late June that the Virgin Islands attorney general was dropping a small part of a legal challenge to ExxonMobil. To get you caught up: Earlier this year, 17 attorneys general, including the Virgin Islands AG, began investigations into whether Exxon had misled shareholders about what it knew about climate change.
In May, Paxton filed a brief supporting Exxon in a lawsuit the company had filed to block the Virgin Islands’ subpoena for decades of records. In June, a Texas judge denied Exxon’s request to quash the Virgin Islands subpoena. But in a sudden twist, about a week later Virgin Islands Attorney General Claude Walker dropped the subpoena, giving Paxton the chance to credit himself.
“The so-called ‘investigation’ by Walker was a constitutionally improper attempt to suppress the freedom of speech,” Paxton said in a press statement. “We are glad that the abuse of power … [has] come to an end.”
The legal consequences of the withdrawal seem limited. Walker plans to continue his investigation alongside other Democratic attorneys general and the New York and Massachusetts attorneys general have subpoenas pending against Exxon.
It’s also not clear whether Walker withdrew the subpoena as a result of Paxton’s intervention. Still, Paxton’s aid of Exxon is unusual but not without precedent, according to legal experts. His actions fit into a larger pattern of Republican attorneys general defending large corporations from industry-wide lawsuits — a pattern that began more than two decades ago during the fight against Big Tobacco, and continued with lead paint manufacturers.
In the 1990s, after attorneys general subpoenaed internal records and discovered that tobacco companies had known the extent to which cigarettes endanger health, they sued the companies. The lawsuits led to a mass settlement, and then-Texas Attorney General Dan Morales, a Democrat, secured $17.3 billion for the state from five tobacco companies, and $3.3 billion in contingency fees for the private trial lawyers who handled the case for the state.
The Republican who succeeded Morales, now-Senator John Cornyn, spent his first two years in office trying to overturn the contingency fees. He also helped set up the Republican Attorneys General Association (RAGA) and told tobacco industry leaders in a fundraising letter that the group “was born out of concerns arising out of the recent industry-wide lawsuits that seek to promote public policy changes.”
Democratic attorneys general had created a wishlist of future industry litigation, Cornyn told industry officials, and contributing to RAGA would help ensure that he and other Republican attorneys general would push back against such mass lawsuits. Cornyn later went on to recuse himself from a state investigation of Enron, which had reportedly funneled money to RAGA indirectly a few years before it collapsed amid a massive corporate scandal.
“[RAGA was] shaking down industries vulnerable to government lawsuits with an implicit promise of protection from litigation,” said Craig McDonald, director of Texans for Public Justice, a liberal watchdog group. That strategy is at play in the Exxon case too, McDonald said.
“It’s just another example of the attorney general trying to protect industry favorites,” he said.
Critics say that Paxton similarly used his office as a bully pulpit to assist an industry that needs little help defending itself.
In a press statement from his office, Paxton said he was defending Exxon’s right to free speech — an argument that the tobacco industry also made in the 1990s — and that the Virgin Islands subpoena punished Exxon “for holding an opinion on climate change that differed from theirs.”
Walker’s office had hired an outside law firm, likely on a contingency fee basis, to handle the case, which Paxton described as a violation of due process that undermined the attorney general’s duty to remain impartial. The arrangement likely allowed Walker to avoid paying the law firm should it lose the case against Exxon, which Paxton alleged proved that Walker had been motivated by financial gain instead of public interest.
Tom McGarity, a University of Texas at Austin law professor who has studied the tobacco industry’s role in obfuscating the science linking smoking and cancer, said contingency fees “should not motivate anyone to be suspicious.” The fees benefit plaintiffs unable to afford expensive litigators, as might be the case with the Virgin Islands, and show that a law firm is willing to take on the risk of failure, he said.
McGarity also pointed out that neither Paxton nor Exxon have challenged the New York attorney general’s subpoena, even though it was filed first.
“The New York attorney general is well known as a real bulldog and also has a crackerjack staff,” McGarity said. “They might have said, ‘We’ll go against the small guy who might not have a qualified staff.’”To support journalism like this, donate to the Texas Observer.