By Chris Hitchcock, Esq. • Chapter Legal Advisor
This year two huge oil companies have used defamation lawsuits to attempt to intimidate and financially ruin environmental nonprofit groups. Recently, Energy Transfer Partners, a Dallas-based oil and gas company, won a verdict of over $660 million for defamation against Greenpeace entities. In a separate filing this year, ExxonMobil sued the California attorney general, Sierra Club, and other nonprofits for alleged defamatory comments about ExxonMobil’s recycling business. The success of the Energy Transfer case and the outcome of the ExxonMobil suit may encourage other companies to attack other nonprofits for alleged defamation.
Energy Transfer, whose total revenue exceeds $82 billion, alleged that Greenpeace defamed it and orchestrated criminal behavior by protesters in 2016 and 2017, claiming it incited protesters by using a misinformation campaign. Many protesters were charged with criminal trespassing after entering restricted pipeline work areas and interfering with activities.
At issue were nine statements by Greenpeace, including allegedly false statements to financial institutions involved in financing the Dakota Access Pipeline. Energy Transfer alleged that because of those statements, the financial institutions took action that cost Energy Transfer millions of dollars. The jurors, more than half of whom had ties to the fossil fuel industry, returned a verdict against Greenpeace that totaled more than $660 million.
ExxonMobil’s lawsuit is in response to a lawsuit filed in September 2024 by the California attorney general and a separate lawsuit filed by Sierra Club and three other nonprofit organizations. The attorney general alleges that ExxonMobil is the largest producer of polymers, which are used to make single-use plastics. The complaint alleges that for decades ExxonMobil has been deceiving consumers by promising that recycling would address the increasing amounts of plastic waste. The lawsuit says that the plastic recycling rate has never exceeded 9% nationwide, causing among other things microplastic pollution which has reached a crisis. The attorney general seeks to recover damages to be placed in a fund to abate plastic pollution. Sierra Club and the other nonprofits filed a separate lawsuit in California making similar claims.
Instead of filing a counterclaim in California, ExxonMobil filed its lawsuit in Texas, claiming that the California attorney general, Sierra Club, and the other nonprofits defamed ExxonMobil by making false accusations about its recycling process. The ExxonMobil lawsuit has the potential not only to intimidate the California attorney general and environmental nonprofits, but also to discourage attorneys general of other states from joining the California attorney general’s lawsuit.
Sierra Club’s response to the lawsuit was exactly right: “This lawsuit is a shameless attempt at intimidation by a multibillion-dollar polluter corporation that covered up its climate change denial for decades.” Similarly, Greenpeace has stated that it will appeal its verdict and that, “This isn’t just a fight for Greenpeace defendants: It’s a fight about the protection of fundamental rights for everyone…. We are committed to our values…. We won’t back down from them.”
By their actions, including the way in which they defend these lawsuits and refuse to settle, both organizations need to demonstrate that the oil companies’ attempts to intimidate have failed and that nonprofits’ efforts to protect the environment remain unchanged.
Nevertheless, in carrying out Greenpeace and Sierra Club’s mission going forward, care must be taken. Statements about companies must be fact-based and supported by ample evidence. Additionally, communicating with third parties about a company, especially third parties that provide funding to that company as Greenpeace has done, should be closely scrutinized to ensure that each statement is factually supported. Finally, when working in tandem with other nonprofits, attention must be focused on whether the communications of those nonprofits are similarly based on solid evidence and can be defended if challenged.
Greenpeace is appealing Energy Transfer’s verdict on the grounds that the First Amendment protects free speech and free association. Although certain Supreme Court justices have suggested that First Amendment defenses are too broad, under current law Greenpeace’s First Amendment defense appears to be a strong basis for appeal. Greenpeace has vowed to pursue its appeal to the Supreme Court, if necessary. This commitment is important because any settlement reached during the appeal process would embolden other companies to pursue Energy Transfer and Exxon/Mobil’s defamation strategy.
Resources
ExxonMobil suit: https://shorturl.at/7roZm
Energy Transfer Partners suit: https://shorturl.at/mtcj6