U.S. judge dismisses Exxon lawsuit to stop climate change probes

By Jonathan Stempel

NEW YORK (Reuters) - A federal judge on Thursday dismissed Exxon Mobil Corp's lawsuit seeking to stop New York and Massachusetts from probing whether the oil and gas company covered up its knowledge about climate change and lied to investors and the public about it.

U.S. District Judge Valerie Caproni in Manhattan rejected as "implausible" Exxon's argument that the states' Democratic attorneys general, Eric Schneiderman and Maura Healey, were pursuing politically motivated, bad faith fraud investigations in order to violate its constitutional rights.

Caproni dismissed the lawsuit with prejudice, meaning the Irving, Texas-based company cannot bring it again.

Exxon is evaluating its legal options, spokesman Scott Silvestri said in an email.

"We believe the risk of climate change is real and we want to be part of the solution," he added. "We've invested about $8 billion on energy efficiency and low-emission technologies such as carbon capture and next generation biofuels."

The case is one of several, including shareholder and employee lawsuits, centred on whether Exxon has for decades lied about climate change, including its impact on energy prices and the environment and its ability to develop reserves, and taken public positions inconsistent with what it knew.

Schneiderman, in a statement, welcomed the end of what he called Exxon's "frivolous, nonsensical lawsuit that wrongfully attempted to thwart a serious state law enforcement investigation."

Healey called Caproni's decision "a turning point in our investigation and a victory for the people."

Exxon sued in June 2016, after receiving subpoenas seeking documents about its historical understanding of climate change, and communications with interest groups and shareholders.

The company accused Schneiderman and Healey of conspiring to "silence and intimidate one side of the public policy debate," violating its rights to free speech and due process and against unreasonable searches.

Much of Exxon's case was based on a March 2016 news conference with the attorneys general and former U.S. Vice President Al Gore, which it called a bid to coerce its adoption of policies that they and climate change activists preferred.

Caproni, however, said "nothing that was said can fairly be read to constitute declaration of a political vendetta against Exxon."

She said the belief by Schneiderman and Healey, "apparently" shared by Exxon, that climate change is real does not mean they had no reason to believe Exxon may have fraudulently "sowed confusion" to bolster its bottom line.

Nowhere, she said, did Exxon suggest that the attorneys general believed the company "was itself confused about the causes or risks of climate change."

The case is Exxon Mobil Corp et al v Schneiderman et al, U.S. District Court, Southern District of New York, No. 17-02301.

(Reporting by Jonathan Stempel in New York; editing by Grant McCool and Leslie Adler)