Climate Lawsuits Are Coming for Koch Industries

Climate Lawsuits Are Coming for Koch Industries
Photo: Sarah Rice, Getty Images

Minnesota Attorney General Keith Ellison announced on Wednesday that he’s suing ExxonMobil, Koch Industries, and the American Petroleum Institute because the three firms deceived customers about the climate crisis. This is the first lawsuit of its kind to name API and Koch Industries, and it takes a novel approach by suing them solely for the lies they told.

The consumer fraud lawsuit alleges that the companies engaged in a multi-decade “campaign of deception,” hiding the fact that they understood as early as the 1950s that oil and gas production contributes to climate breakdown and still chose to extract, market, and sell the fuels. It includes claims for fraud, failure to warn and violations of Minnesota statutes on consumer fraud, deceptive trade practices and false statements in advertising. As retribution, it calls for Minnesotans to be compensated for their losses and for the defendants to fund a public education campaign about the dangers of climate change.

“We’re here suing these defendants, API, ExxonMobil and Koch, for hiding the truth, confusing the facts and muddling the water to devastating effect,” Ellison said at a news conference.

This isn’t the first instance of a locality suing Big Oil firms. There are currently 14 ongoing lawsuits across the U.S. aiming to hold fossil fuel companies and their allies in government liable for climate damages, some of which are also based on knowledge of the multi-decade campaign to distort climate science and mislead the public about the dangers of oil and gas use.

But while other lawsuits have targeted ExxonMobil and other major oil producers, Ellison’s groundbreaking suit targets not just the polluting companies but also fossil fuel lobbyists who also deceived consumers. The multinational Koch Industries’ does produce fossil fuel products — in fact, it owns a large Minnesota refinery that manufactures about 80% of the gasoline used in the state — but it is also heavily involved in lobbying for the fossil fuel industry’s interests. And API is the largest U.S. trade association for oil and natural gas companies. Naming these representatives, rather than just fossil fuel producers themselves, lays out that they had a role in the deception as well.

“This case is historic because it indicates the intention to hold accountable more of the actors that have knowingly fuelled the climate crisis,” Sriram Madhusoodanan, deputy campaigns director at Corporate Accountability, told Earther in an email. “For decades, these two entities have been some of the most effective at manipulating policymaking behind closed doors: Koch Industries acting on behalf of its sprawling empire and API on behalf of its fossil fuel members.”

The suit diverges from all other previous ones against Big Oil in another crucial way, too. It’s the first one that hinges only on whether or not the companies deceived the public rather than previous cases focused on defrauding investors, damages caused by climate change, and other issues.

“It is essentially strictly a case about lying,” Richard Wiles, executive director of legal advocacy group Centre for Climate Integrity, told Earther. “Literally, the guts of the case are that the defendants perpetrated fraud on the citizens of Minnesota.”

Unlike other suits about this disinformation campaign, to be successful, Ellison would not have to prove that the campaign was responsible for environmental degradation.

“Really all the attorney general has to do is prove that there was in fact a coordinated disinformation campaign,” said Wiles. “They don’t have to prove that anybody acted on the disinformation, they don’t have to prove that the disinformation led to certain impacts or damages, they just have to show that it happened.”

Other climate lawsuits have raised the political questions of who can be held responsible for climate change and who should pay for it. Even some of the 100 companies which are responsible for over 70 per cent of global greenhouse gas emissions have been let off the hook in court, with judges claiming they can’t hold them accountable for a massive, global issue. But the Minnesota suit takes a different approach, and that distinction may make it easier to win.

If the state wins, the suit could lead to significant damages and fines. The suit calls for the companies to “disgorge all profits,” meaning the three defendants would have to give up any money they made as a result of their illegal conduct. It could end up being a large sum of money.

“I don’t even know how they would calculate that, but you could imagine it would include all the profits made from the sales of their products in the state of Minnesota during the time that fraud was perpetrated on the citizens of the state” Wiles said. In other words, they could be forced to forfeit all the money they made off oil and gas in Minnesota since the 1950s.

Minnesota’s lawsuit could also force Exxon, API, and Koch Industries to turn over decades of documents that could provide evidence about their attacks on climate science and deception of the public about the climate crisis. This process of discovery could “give the most in-depth inside look at how these corporations have systematically worked to deceive the public on the truth about climate change,” said Madhusoodanan. Massachusetts’ case against ExxonMobil that went to the Supreme Court last year almost forced the oil giant to do so, though the company ultimately emerged unscathed.

The case also poses serious reputational risks for ExxonMobil, API, and Koch Industries. By undermining their credibility and exposing them as liars, the case could make it harder for them to reasonably demand a role in crafting climate policy.

“You don’t see the opioid industry is at the table when we’re writing a healthcare policy. Big Tobacco’s not at the table when we’re writing healthcare policy,” said Wiles.

Even though it’s well-documented that Exxon, API, and Koch Industries have spent decades lying to customers and shareholders, this suit likely won’t be a cakewalk. All three defendants have limitless capital to spend to defeat it in the courts. But if Minnesota prevails, it could seriously erode the companies’ moral authority.

“That’s the last thing they want,” said Wiles.