Alleging Consumer Fraud, Minnesota Sues Exxon, Koch, and API for Climate Change Deception

The suit targets Koch Industries and others for decades of creating and funding climate disinformation campaigns.

by | Jun 24, 2020

Hendrum, MN, March 29, 2009 --Flooded farms and rural communities in Norman County adjacent to the Red River of the North. Andrea Booher/FEMA

Minnesota on Wednesday joined the growing number of states and municipalities seeking damages from the fossil fuel industry for knowingly deceiving consumers about climate change and its impacts. But Attorney General Keith Ellison is charting a different and potentially groundbreaking legal course from those lawsuits, by suing ExxonMobil, Koch Industries, and the American Petroleum Institute under state laws that prohibit lying to consumers.

To date the majority of this generation of climate suits are nuisance cases. They allege that fossil fuel companies’ efforts to misinform the public on climate change successfully delayed for decades any regulations and other actions to slow or stop it, creating the need for billions of dollars in mitigation costs that municipal and state governments could otherwise have avoided. In those cases, which include among others suits filed by the cities of Oakland and San Francisco, Calif., and Boulder, Colo.,, the plaintiffs are seeking damages: They want fossil fuel companies to pay their fair share of the cost of climate adaptation.

The Minnesota case is different in a few key ways:

First, there are two of the defendants, Koch Industries and the American Petroleum Institute, or API, the largest fossil fuel industry trade group. The nuisance suits have concentrated on companies with refineries and pipelines, such as Exxon. This suit, however, focuses on knowingly and actively deceiving the public— it is targeting the refiners and distributors not just of fossil fuel products, but of climate change denial, an arena where both API and Koch have been major players.

In 1998, API convened a group of industry stakeholders to draft the blueprint of the industry’s climate disinformation strategy in an effort to keep the U.S. from committing to binding emissions reductions targets under the first international climate agreement, the Kyoto Protocol. Ten years later, ahead of the pivotal 2008 climate conference in Copenhagen where nations hoped to agree on a strong successor to the Kyoto pact, API spent at least $75 million with one PR firm alone, Edelman, to work against climate action. And that was just one contract in one year.

Koch Industries, along with co-owners and brothers Charles and the late David Koch themselves, have for decades funneled hundreds of millions of dollars into think tanks and front groups that spread climate disinformation. The long list of examples ranges from the work of Patrick Michaels, the Cato Institute’s director of the Center for the Study of Science to the “documentary” Green Tyranny (which originally aired on Fox News), as well as one of the earliest convenings of climate deniers, “Global Environmental Crises: Science or Politics?” which the Cato Institute hosted in 1991.

Which brings us to the second key difference: The claim itself. It’s not a nuisance claim, but a consumer protection suit that combines Minnesota statutory and common laws centered on false advertising, deceptive trade practices, and consumer fraud. In that way, it’s closer to the Massachusetts fraud case against ExxonMobil, than to the dozen or so climate liability cases making their way through the country’s state and federal district courts.

“This complaint does not seek to hold these companies accountable for climate change. It seeks to hold them accountable for violating Minnesota’s consumer protections,” said Leigh Currie, Minnesota’s assistant attorney general at a press conference announcing the suit. This is significant because, the complaint’s reliance on state consumer protection laws may help it avoid some of the jurisdictional issues that the nuisance cases have faced.

And then there’s the injunctive relief part, which makes this case unique, and a really interesting one to watch moving forward. Injunctive relief is legalese for a court order that forces some person or entity to stop doing something. In this case, Ellison has asked for injunctive relief to stop deception, a corrective public education campaign in Minnesota on climate change, and full disclosure of all internal research the three defendants have conducted on the issue of climate change.

“This was a 30-year effort to defraud consumers in Minnesota about climate change and the role of fossil fuel products in it,” Ellison said at the press conference, illustrating his point with a series of images of internal industry documents revealing what they knew and when.

Several other speakers at the press event connected the fossil fuel industry’s climate denial efforts to the tobacco industry’s deception of the public about the harms of smoking, including Doug Blanke, a former state prosecutor who now directs the Public Health Law Center at Mitchell Hammond School of Law. When he worked in the Attorney General’s office, Blanke spent much of his time on lawsuits holding Big Tobacco accountable. “We were combatting the lies of the tobacco industry — lies that echo through every page of today’s lawsuit,” he said. “These strategies are ripped straight from the pages of tobacco’s playbook.”

Minnesota’s suit is also seeking restitution and disgorgement of profits, essentially a handing over of ill-gotten gains. The complaint does not request a specific amount, but it compares the billions of dollars in profits earned by oil companies from the 1980s to the early 2000s, with the billions of dollars of climate-related costs borne by Minnesota residents, stating, “If Defendants had not misled the public to pad their own pockets, Minnesota would not have already incurred such large costs because of climate change and would not be facing such dramatic future costs.”

Flooding has increased dramatically in Minnesota over the past decade. According to the Environmental Protection Agency, over the last half century, average annual precipitation in most of the Midwest increasing by 5 to 10% with rainfall during the four wettest days of the year has increased about 35%. The Minnesota Pollution Control Agency notes that temperatures have increased by 1 to 3 degrees Fahrenheit statewide, and that more frequent heavy rains have been causing low areas to flood, resulting in crop, home, and business damages.

Minnesotans are also grappling with immediate impacts of the oil and gas industry on public health and the environment, including air pollution and pipeline-related water pollution. Environmental activist and author Winona LaDuke, a member of the Chippewa White Earth Nation in north-central Minnesota, spoke about the Enbridge pipeline. “I never expected to be spending years fighting Enbridge, but this pipeline company brings more than 70% of the tar sands oil into this country,” she said.

Sam Grant, director of the climate action group Minnesota 350, connected the lawsuit to the nationwide Black Lives Matter protests spurred by the police killing of George Floyd in Minneapolis. “We have a choice between freedom to profit or freedom to breathe,” he said. “It ought to be a no brainer that freedom to breathe comes first, because we have to be alive for anything else to happen.”

Grant described low-income Black and Brown neighborhoods in northern Minneapolis where air pollution from fossil fuel facilities has shortened lifespans by at least 11 years compared to the national average. And in a first for climate lawsuits, the complaint itself highlights climate justice, too, right up top on the first page, where it notes, “Warming will continue with devastating economic and public-health consequences across the state and, in particular, disproportionately impact people living in poverty and people of color.”

While oil companies don’t like to lose money, especially now when the oil and gas marketis turned upside down, it’s possible the “disclosure of all internal research” piece of the Minnesota suit is the thing they’ll fight hardest. A full disclosure of the Koch, API, and ExxonMobil files on climate change could hurt its chances of winning all the other climate cases, and send the industry hurtling down the Big Tobacco pathway towards a multi-hundreds of billions of dollars settlement with states.

Juwaria Jama, co-leader of the Minnesota Youth Climate Strike, spoke about the fossil fuel industry “infringing on Indigenous and low-income communities to build pipelines and refineries that harm those communities.”

“Because of the deception of these companies, as teenagers we are spending our time fighting for a future that could be stolen,” said Jama, “a last-minute battle to preserve a livable world for myself and subsequent generations. And the most heartbreaking thing is that it could have been prevented.

“These corporations knew the impacts of climate change long before now, and they could have sounded the alarm. Instead they covered up the damage,” she said. “These corporations have gone far too long without being held accountable for our globe and our future.”

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Amy Westervelt is the editor-in-chief of Drilled News, creator and host of the Drilled podcast, and founder of the Critical Frequency podcast network, named AdWeek's Podcast Network of the Year in 2019. An award-winning print and audio journalist, Amy has contributed to The Guardian, The Wall Street Journal, and The Washington Post, as well as KQED, The California Report, Capital Public Radio, and many other outlets. She is the 2015 winner of the Rachel Carson award for "women greening journalism," and a 2016 winner of an Edward R. Murrow award for her series on the impacts of the Tesla Gigafactory in Nevada. In 2019, the Drilled podcast won the Online News Association's "Excellence in Audio Storytelling" award.