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Exxon Mobil Corp. v. Schneiderman

United States District Court, S.D. New York

March 29, 2018

EXXON MOBIL CORPORATION, Plaintiff,
v.
ERIC TRADD SCHNEIDERMAN, Attorney General of New York, in his official capacity, and MAURA TRACY HEALEY, Attorney General of Massachusetts, in her official capacity, Defendants.

          OPINION AND ORDER

          VALERIE CAPRONI United States District Judge

         Running roughshod over the adage that the best defense is a good offense, Exxon Mobil Corporation (“Exxon”) has sued the Attorneys General of Massachusetts and New York (collectively “the AGs”), [1] each of whom has an open investigation of Exxon. The AGs are investigating whether Exxon misled investors and the public about its knowledge of climate change and the potential effects that climate change may have on Exxon's business. Exxon contends the investigations are being conducted to retaliate against Exxon for its views on climate change and thus violate Exxon's constitutional rights. The relief requested by Exxon in this case is extraordinary: Exxon has asked two federal courts-first in Texas, now in New York-to stop state officials from conducting duly-authorized investigations into potential fraud.

         It has done so on the basis of extremely thin allegations and speculative inferences. The factual allegations against the AGs boil down to statements made at a single press conference and a collection of meetings with climate-change activists. Some statements made at the press conference were perhaps hyperbolic, but nothing that was said can fairly be read to constitute declaration of a political vendetta against Exxon.

         Healey and Schneiderman have moved to dismiss Exxon's First Amended Complaint (the “Complaint”) (Dkt. 100) on numerous grounds: personal jurisdiction, ripeness, res judicata, abstention pursuant to Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976), and that the Complaint fails to state a claim. The AGs have reserved their other defenses, including abstention pursuant to Younger v. Harris, 401 U.S. 37 (1971), and qualified immunity, for subsequent motion practice, if necessary. Exxon has opposed the AGs' motions and cross-moved for leave to amend in order to file the SAC. The AGs argue that leave to amend should be denied as futile because the SAC also fails to state a claim.

         For the reasons given below, the Court concludes that Healey is subject to this Court's jurisdiction and that Exxon's claims against the AGs are ripe for adjudication. The Complaint and SAC suffer from a more fundamental flaw, however: Exxon's allegations that the AGs are pursuing bad faith investigations in order to violate Exxon's constitutional rights are implausible and therefore must be dismissed for failure to state a claim. For the same reason, amendment and filing of the SAC would be futile. Additionally, Exxon's lawsuit against Healey is precluded by res judicata. The Court does not reach whether abstention would be appropriate pursuant to Colorado River. The motions to dismiss are GRANTED, leave to amend is DENIED, and the Complaint is DISMISSED WITH PREJUDICE.

         BACKGROUND

         1. The New York Subpoenas and Massachusetts CID

         In November 2015, the NYAG served Exxon with a subpoena seeking documents related to its historical knowledge of climate change and its communications with interest groups and shareholders regarding the same. Compl. ¶¶ 20, 65-68. The subpoena was issued in connection with an investigation into deceptive and fraudulent acts in violation of New York Executive Law Art. 5 § 63(12) and New York General Business Law Art. 22-A, and the Martin Act, New York General Business Law Art. 23-A, which prohibits fraudulent practices in connection with securities issued or sold in New York. Declaration of Justin Anderson (“Anderson Decl.”) (Dkt. 227) Ex. B (the “Subpoena”) at 1; Compl. ¶ 62. As Schneiderman explained at a press conference discussed in detail below, the NYAG was investigating whether Exxon's historical securities filings were misleading because they failed to disclose Exxon's internal projections regarding the potential costs to Exxon of climate change and likely climate change-related regulations. Compl. ¶ 36. Among other things, the Subpoena demanded that Exxon produce documents relevant to: Exxon's research and internal deliberations concerning climate change since 1977, Exxon's communications concerning climate change with certain oil and gas interests since 2005, Exxon's support for outside organizations regarding climate change since 1977, and Exxon's marketing, advertising, and public relations materials concerning climate change since 1977. Subpoena at 8-9; Compl. ¶¶ 65-66. The Subpoena was followed by an August 2016 subpoena served on PricewaterhouseCoopers (“PwC”), Exxon's outside auditor. Opp'n (Dkt. 228) at 12. In response, and after some disputes over the scope of the Subpoena, Exxon produced at least 1.4 million pages of documents to the NYAG. See infra at 12.

         Approximately one year later, in fall 2016, the NYAG requested additional documents relevant to what Exxon calls the “stranded assets theory.” Compl. ¶¶ 75-76. Under this theory, Exxon's past disclosures of the value of its oil and gas reserves may have been overstated because Exxon did not account for the potential impact of new regulations designed to reduce harmful emissions on the economics and feasibility of extracting certain oil and gas reserves. Compl. ¶ 75. These reserves would be “stranded” because it would no longer be economically feasible for Exxon to extract them. If Exxon's internal models showed that certain reserves were likely to be stranded, Exxon might have been required to disclose those facts to the market. Relatedly, according to Exxon, the NYAG is also investigating the possibility that certain of Exxon's assets may be impaired and that Exxon's public disclosures do not account for that impairment.[2] Compl. ¶ 79. Exxon has engaged in a “dialogue” with the NYAG regarding these demands. Compl. ¶ 76. In May and July, 2017, the NYAG served Exxon with subpoenas for testimony and documents relative to these theories. SAC ¶ 86.

         About six months after the NYAG served its first subpoena on Exxon, the MAG served Exxon with a Civil Investigative Demand (the “CID”) to pursue a similar fraud theory. Compl. ¶ 69. The CID was issued as part of an investigation into potential violations of Massachusetts General Law ch. 93A § 2, which prohibits “unfair or deceptive acts or practices” in “trade or commerce.” Compl. ¶ 69. Like the Subpoena, the CID demands internal Exxon documents regarding climate change since the 1970s, Compl. ¶ 72; Anderson Decl. Ex. C (Civil Investigative Demand or the “CID”) at 12, and records of communications between Exxon and other energy companies, affiliated interest groups, and conservative policy organizations, CID at 13, 18; Compl. ¶ 73. The CID also demands records related to specific reports prepared by Exxon and statements by Exxon officers regarding climate change. CID at 14-16.[3] For example, the CID demands any documents and communications concerning a paper entitled “CO2 Greenhouse Effect A Technical Review, ” which was prepared by Exxon researchers in 1982, and a 2014 report to shareholders entitled “Energy and Carbon - Managing the Risks.” CID at 13, 16. Broadly, the CID demands “Documents and Communications concerning any public statement [former CEO Rex W. Tillerson][4] has made about Climate Change or Global Warming from 2012 to present.” CID at 15. Like the Subpoena, the CID also demands documents relevant to Exxon's discussion of climate change in marketing materials and securities filings. See CID at 17-19.

         2. Exxon's Lawsuit[5]

         Exxon brought this lawsuit on June 15, 2016, two months after receiving the CID and eight months after receiving the Subpoena. The Complaint alleges that the CID and the Subpoena are part of a conspiracy to “silence and intimidate one side of the public policy debate on how to address climate change.” Compl. at 1. The overt portion of this campaign is a coalition of state attorneys general, including Healey and Schneiderman, called the “AGs United for Clean Power” or “Green 20.” Compl. ¶ 27. The AGs United for Clean Power held a conference and press event with former Vice President Al Gore in New York on March 29, 2016, to announce a plan to take “progressive action to address climate change.” Compl. ¶ 27.

         Schneiderman spoke at the March 29, 2016, press event and said that the conference's purpose was to “com[e] up with creative ways to enforce laws being flouted by the fossil fuel industry and their allies . . . .” Anderson Decl. Ex. A (Tr. of March 29, 2016, press conference) at 1. He described climate change as the “most important issue facing all of us, ” and described the conference as a “collective of states working as creatively, collaboratively and aggressively as possible.”[6] Anderson Decl. Ex. A at 2. Schneiderman also linked the AGs United for Clean Power conference to inaction at the federal level to address climate change: “[W]e know that in Washington there are good people who want to do the right thing on climate change but everyone . . . is under a relentless assault from well-funded, highly aggressive and morally vacant forces . . . .”[7] Anderson Decl. Ex. A at 4.

         Healey also spoke at the March 29, 2016, press conference and said that “[c]limate change is and has been for many years a matter of extreme urgency. . . . Part of the problem has been one of public perception, and it appears, certainly, that certain companies, certain industries, may not have told the whole story, leading many to doubt whether climate change is real and to misunderstand and misapprehend the catastrophic nature of its impacts.” Anderson Decl. Ex. A at 12; Compl. ¶ 32. Referencing Schneiderman's earlier comments regarding Exxon's disclosures (quoted supra n. 6), Healey said “[t]hat's why I, too, have joined in investigating the practices of [Exxon]. We can all see today the troubling disconnect between what Exxon knew, what industry folks knew, and what the company and industry chose to share with investors and with the American public.” Anderson Decl. Ex. A at 12; Compl. ¶ 37.

         In a wild stretch of logic, Exxon contends that the AGs' “overtly political tone, ” Compl. ¶ 38, and comments on public “confusion” relative to climate change show that their intent is to chill dissenting speech, Compl. ¶ 31; see also Id. ¶ 31 (“To [Schneiderman], there was ‘no dispute but there is confusion and confusion sowed by those with an interest in profiting from the confusion and creating misperceptions in the eyes of the American public . . . .”). And, Exxon alleges, the AGs' comments demonstrate that they have prejudged the outcome of their investigations, presuming Exxon's guilt from the get-go. Compl. ¶¶ 36- 37.[8]

         The Complaint alleges that the March 29, 2016, conference was the culmination of a behind-the-scenes push by climate change activists. Among the activists allegedly involved are Peter Frumhoff, Director of Science and Policy for the Union of Concerned Scientists, Compl. ¶ 42, who previously contributed to a report titled “Smoke, Mirrors, and Hot Air: how ExxonMobil Uses Big Tobacco's Tactics to Manufacture Uncertainty on Climate Science, ” Compl. ¶ 44. Also allegedly involved is Matthew Pawa, a self-described specialist in “climate change litigation.” Compl. ¶ 45. The Complaint describes the development by Pawa, Frumhoff, and the private Rockefeller Family Fund of a strategy to promote litigation against fossil fuel producers, including, in particular, Exxon. Compl. ¶¶ 46-49. Pawa and Frumhoff allegedly made presentations to the AGs United for Clean Power at the March 29, 2016, conference, Compl. ¶¶ 44-45, but when Pawa was asked for comment by a Wall Street Journal reporter, a member of the NYAG's office requested that he “not confirm” his attendance at the conference. Compl. ¶ 50.

         The SAC adds detail to the Complaint's allegations regarding Pawa and Frumhoff and the Rockefeller Family Fund. According to the SAC, Pawa, Frumhoff, and others hatched a scheme to promote litigation against Exxon at a June 2012 conference in La Jolla, California. SAC ¶ 44. These activists saw litigation as a means to uncover internal Exxon documents regarding climate change and to pressure fossil fuel companies like Exxon to change their stance on climate change. SAC ¶ 45. In January 2016, at a conference at the offices of the Rockefeller Family Fund, the activists discussed the “‘the main avenues for legal actions & related campaigns, ' including ‘AGs, ' ‘DOJ, ' and ‘Torts, '” and which options “had the ‘best prospects' for (i) ‘successful action, ' (ii) ‘getting discovery, ' and (iii) ‘creating scandal.'” SAC ¶ 53 (quoting Anderson SAC Decl. Ex. S1 at 1-2). Exxon connects this strategy to a few meetings attended by staff from various state attorneys general, SAC ¶¶ 39, 46, 48, and records of communications and information-sharing between the activists, the NYAG, and other state attorneys general, SAC ¶¶ 48, 56-58, 67-69. For example, there was a conference at Harvard Law School in April 2016 entitled “Potential State Causes of Action Against Major Carbon Producers: Scientific, Legal and Historical Perspectives, ” which included an hour-long session on “state causes of action” such as “consumer protection claims” and “public nuisance claims.” Anderson SAC Decl. Ex. S47 at 1-2.[9]

         The Complaint also alleges the document requests themselves demonstrate that the investigations are politically motivated. Exxon contends that the AGs' legal theories are so flawed-in terms of a factual or jurisdictional basis-that the only rational explanation is that the AGs are motivated by animus towards Exxon, rather than by a good faith belief that Exxon may have violated state law. It argues, for example, that the statutes cited by the NYAG have six-year statutes of limitations at most, but the Subpoena requests documents dating to 1977. This is evidence, according to Exxon, of an intent to harass rather than to conduct a good faith investigation of potential violations of law. Compl. ¶¶ 62-63. And, according to Exxon, with limited and irrelevant exceptions, it has not sold any products or securities in Massachusetts during the applicable limitations period. Compl. ¶ 70; see also Compl. ¶¶ 68, 71 (alleging the Subpoena and CID seek documents with no connection to Exxon's activities in New York and Massachusetts). Both the Subpoena and CID demand Exxon's communications with oil and gas interest groups, which, according to Exxon, demonstrates the AGs' political bias because communications with private parties have no relevance to Exxon's public disclosures. Compl. ¶¶ 66, 73. Exxon believes that the NYAG's shift in theories-from whether Exxon made misleading disclosures regarding its knowledge of climate change to whether it appropriately disclosed the value of assets likely to be stranded or impaired because of climate change-is evidence of an investigation in search of a crime, further demonstrating the NYAG's improper purpose. Compl. ¶ 76. According to Exxon, the stranded assets theory is also inconsistent with SEC guidance regarding disclosure of proved reserves. Compl. ¶¶ 77-81.

         Based on these allegations, Exxon alleges the NYAG and MAG are retaliating against Exxon for its speech relative to climate change and the “policy tradeoffs of certain climate initiatives.” SAC ¶ 123; see also SAC ¶¶ 120-124 (elaborating on Exxon's current position regarding climate change). Exxon asserts seven causes of action: for conspiracy to deprive Exxon of its constitutional rights pursuant to 42 U.S.C. § 1985, Compl. ¶¶ 105-08; for violations of Exxon's free speech rights pursuant to the First Amendment, and right to be free from unreasonable searches pursuant to the Fourth Amendment, Compl. ¶¶ 109-11, 112-14; for violations of Exxon's right to due process pursuant to the Fourteenth Amendment, Compl. ¶¶ 115-17; for violations of the Dormant Commerce Clause, Compl. ¶¶ 118-21; preemption of Massachusetts and New York law to the extent they conflict with applicable SEC regulations, Compl. ¶¶ 122-26; and common law abuse of process, Compl. ¶¶ 127-28. As revised in the SAC, Exxon demands broad relief, including a declaratory judgment that the AGs' investigations violate Exxon's constitutional rights, SAC at 58, and an injunction “halting or appropriately limiting the investigations, ” SAC at 59.[10]

         3. Litigation in Massachusetts and New York

         One day after filing its federal lawsuit against Healey (but not Schneiderman) in Texas, Exxon petitioned a Massachusetts Superior Court to set aside the CID and to disqualify Healey from the investigation. Opp'n at 10. Exxon's petition alleged that the CID violates the Massachusetts constitution's protections for free speech and against unreasonable searches and seizures, is arbitrary and capricious, and that Exxon is not subject to personal jurisdiction in Massachusetts. Declaration of Christophe G. Courchesne (“Courchesne Decl.”) (Dkt. 218) Ex. 2 (the “Petition”) ¶¶ 16-22. The Petition relied on substantially the same factual allegations as the Complaint. Citing the March 29, 2016, conference and the AGs United for Clean Power coalition, the Petition alleged that the CID is intended to chill Exxon's free speech. See Petition ¶¶ 13-14, 61-63; see also Id. ¶¶ 16-22 (among other things, quoting the same statements by Healey and Schneiderman at the March 29, 2016, press conference as are quoted in the Complaint). The Petition included, verbatim (or nearly verbatim), the same allegations regarding Pawa and Frumhoff. Petition ¶¶ 28-35. Like the Complaint (and in nearly identical language), the Petition also alleged that the CID's demand for communications between Exxon and other oil and gas interests and affiliated organizations demonstrates that the MAG investigation is politically motivated, and it alleged that Exxon could not have violated Massachusetts law because it has not sold fuel or securities in Massachusetts during the applicable limitations period. Petition ¶¶ 40-48. Noting the potential overlap between the Petition and Complaint, Exxon requested that the Massachusetts Superior Court stay proceedings pending the outcome of the federal litigation it had commenced the day before in Texas. See Petition ¶ 71 (“Staying the adjudication of this Petition would avoid the possibility of duplication or inconsistent rulings . . ., and will serve the interests of judicial economy and efficiency and the principles of comity.”). The MAG cross-moved to compel Exxon to comply with the CID. Opp'n at 11.

         On January 11, 2017, the Massachusetts Superior Court denied Exxon's petition to set aside the CID and granted the MAG's petition to compel. Anderson Decl. Ex. OO (the “Massachusetts Decision”).[11] The Superior Court found that Exxon was subject to personal jurisdiction in Massachusetts by virtue of its control over franchisees operating Exxon-branded gas stations in the Commonwealth. Mass. Decision at 8. The Superior Court also rejected Exxon's argument that the CID was arbitrary and capricious because the MAG did not have a “‘reasonable belief' of wrongdoing.'” Mass. Decision at 8-9. Turning to the viewpoint discrimination theory that is the core of the Complaint, the Court wrote:

Exxon also argues that the CID is politically motivated, that Exxon is the victim of viewpoint discrimination, and that it is being punished for its views on global warming. As discussed above, however, the court finds that the Attorney General [Healey] has assayed sufficient grounds - her concerns about Exxon's possible misrepresentations to Massachusetts consumers - upon which to issue the CID. In light of these concerns, the court concludes that Exxon has not met its burden of showing that the Attorney General is acting arbitrarily or capriciously toward it.

         Mass. Decision at 9. The Superior Court also denied Exxon's motion to disqualify Healey holding that her comments at the AGs United for Clean Power conference did not show any bias:“In the Attorney General's comments at the press conference, she identified the basis for her belief that Exxon failed to disclose relevant information to Massachusetts consumers. These remarks do not evidence any actionable bias on the part of the Attorney General: instead it seems logical that the Attorney General inform her constituents about the basis for her investigations.” Mass. Decision at 12. Although the Superior Court said it would not consider Exxon's free speech claim because any misleading or deceptive speech by Exxon “is not entitled to any free speech protection, ” it effectively rejected the claim when it found the CID was not issued in bad faith to chill Exxon's free speech rights. Mass. Decision at 9 n.2.

         Exxon appealed the Superior Court's order on February 8, 2017. Opp'n at 11 n.42. Exxon's appeal was transferred to the Massachusetts Supreme Judicial Court, where it remains pending as of the date of this opinion. Dkt. 236.

         In contrast to its strategy in Massachusetts, Exxon initially complied with both New York subpoenas and had, by November 2016, produced over 1.4 million pages of responsive documents. Compl. ¶¶ 26, 74; Mass. Decision at 11. Nonetheless, in November 2016, Schneiderman's office moved to compel compliance with the Subpoena in New York Supreme Court.[12] Memorandum of Law in Support of the NYAG's Motion to Dismiss (“NY Mem.”) (Dkt. 220) at 10. The parties have taken inconsistent positions on whether Exxon has been compelled to produce documents by the New York Supreme Court. Until recently, the parties took the position that Exxon's compliance with the Subpoena was consensual, based on a compromise refereed by the assigned Supreme Court justice, Barry Ostrager. See NY Mem. at 10-11 (Exxon and the NYAG have appeared four times before the Supreme Court to discuss the parameters of Exxon's productions); Opp'n at 12, 25 (characterizing the proceedings before Justice Ostrager as an “unsuccessful attempt to compel ExxonMobil to produce documents outside the scope of the November 2015 subpoena” and “discovery conferences and letter writing related to ExxonMobil's technical compliance); see also Opp'n at 25 (“Not a single opinion has issued from the New York state court, other than a ruling on whether the accountant-client privilege protects materials responsive to the PwC subpoena . . . .”). At oral argument, however, the NYAG took the position that Justice Ostrager did require Exxon to comply with the NYAG's initial subpoena and its subsequent requests for documents and testimony. See November 30, 2017 Hr'g Tr. (Dkt. 244) (“Hr'g Tr.”) at 64-65. The record before Justice Ostrager supports that position. For example, at a hearing on November 21, 2016, Justice Ostrager ordered the parties to agree to a schedule for productions or he would enter a formal order. See Declaration of Leslie B. Dubeck (“Dubeck Decl.”) (Dkt. 221) Ex. 10 (Nov. 21, 2016 Hr'g Tr.) at 24-26. Justice Ostrager and the parties contemporaneously described the resolution of the parties' dispute as a court order. See Dubeck Decl. Ex. 13 (Jan. 9, 2017 Hr'g Tr.) at 17-18 (“What I've ordered in my judgment will assure that along with a lot of false positives you are going to get the documents that you really want.”). Follow-on directions were issued by the court at subsequent hearings. See Dubeck Decl. Ex. 15 (March 22, 2017 Hr'g Tr.) at 27-29. In its supplemental brief in opposition to the motions to dismiss, Exxon has echoed the NYAG's position that its compliance with the Subpoena has been compelled. See Supp. Opp'n (Dkt. 249) at 21. Although the shifting of positions on a fairly straightforward issue is curious, the Court takes the NYAG's position at oral argument as a concession that Exxon has been compelled by the New York Supreme Court to provide documents and testimony in connection with the Exxon investigation.[13]

         4. Proceedings in Texas

         This case was initially filed on June 15, 2016, in the Northern District of Texas against Healey. Exxon moved for a preliminary injunction, Dkt. 8, and Healey cross-moved to dismiss on the grounds that she was not subject to the Texas court's personal jurisdiction, that the case was not ripe, that Younger abstention was appropriate, and for improper venue. Dkts. 41, 42. Although Exxon did not request discovery, the district judge sua sponte ordered jurisdictional discovery to address whether the “bad faith” exception to Younger abstention should apply. Dkt. 73 at 5-6. On October 17, 2016, Exxon successfully moved to file an amended complaint that added Schneiderman and the New York investigation to the Texas litigation. Dkt. 74. As to discovery, the court reversed course on December 12th and 15th, 2016, stayed its prior discovery order, and directed the parties to brief whether the court had personal jurisdiction over the Ags.[14] Dkts. 158, 162, 163, 164. Although no party proposed transferring the case, on March 29, 2017, Judge Kinkeade sua sponte transferred the case to this court on the theory that personal jurisdiction might be proper in this District.[15] Dkt. 180.

         After a conference with the parties, the Court entered an order requiring the parties to re-brief the motions to dismiss under Second Circuit law. Dkts. 216, 219. At oral argument on November 30, 2017, the Court ordered the parties to provide supplemental briefing on whether the Complaint states a claim. Exxon cross-moved for leave to amend on January 12, 2018. Dkt. 250.

         DISCUSSION

         1. Ripeness

         “The ripeness doctrine is drawn both from Article III limitations on judicial power and from prudential reasons for refusing to exercise jurisdiction.” N.Y. Civil Liberties Union v. Grandeau, 528 F.3d 122, 130 (2d Cir. 2008) (Sotomayor, J.) (quoting Nat'l Park Hospitality Ass'n v. Dep't of Interior, 538 U.S. 803, 808 (2003)). The constitutional aspect of ripeness concerns whether a case presents a case and controversy within the meaning of Article III of the Constitution. See Am. Savings Bank, FSB v. UBS Fin. Servs., Inc., 347 F.3d 436, 439 (2d Cir. 2003) (per curiam) (citing Simmonds v. INS, 326 F.3d 351, 357 (2d Cir. 2003)). The prudential aspect of ripeness “is a more flexible doctrine of jurisprudence, and constitutes an important exception to the usual rule that where jurisdiction exists a federal court must exercise it.” Simmonds, 326 F.3d at 357. Prudential ripeness is concerned with whether a case will be better decided in the future, such that the Court may “enhance the accuracy of [its] decisions and [] avoid becoming embroiled in adjudications that may later turn out to be unnecessary or may require premature examination, of, especially, constitutional issues that time may make easier or less controversial.” Id.

         The AGs have moved to dismiss pursuant to the prudential ripeness doctrine. “To determine whether a challenge . . . is ripe for judicial review, we proceed with a two-step inquiry, ‘requiring us to evaluate both the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration.'” Grandeau, 528 F.3d at 131-32 (quoting Abbott Labs. v. Gardner, 387 U.S. 136, 149 (1967)). The fitness inquiry asks whether the issues for decision will be further clarified over time or “are contingent on future events or may never occur.” Am. Savings Bank, FSB, 347 F.3d at 440 (quoting Simmonds, 326 F.3d at 359) (additional citations omitted). The hardship analysis asks “whether and to what extent the parties will endure hardship if [a] decision is withheld.” Grandeau, 528 F.3d at 134 (quoting Simmonds, 326 F.3d at 359). “Assessing the possible hardship to the parties” requires the Court to “ask whether the challenged action creates a direct and immediate dilemma for the parties, ” Marchi v. Bd. of Coop. Educ. Servs. of Albany, 173 F.3d 469, 478 (2d Cir. 1999) (citing Abbott Labs., 387 U.S. at 152-53); that is, whether there is “some present detriment” rather than the “mere possibility of future injury, ” Simmonds, 326 F.3d at 360.

         The Second Circuit has had occasion to apply the prudential ripeness doctrine to an executive subpoena for documents. In Schulz v. IRS, a taxpayer sued in federal court to quash a “series of administrative summonses seeking testimony and documents in connection with an IRS investigation.” 395 F.3d 463, 463 (2d Cir. 2005) (per curiam). At the time of the suit, the IRS had not sought to compel production of the documents. Id. Because IRS summonses are not self-executing-that is, the IRS must seek judicial intervention to compel production-a magistrate judge, and then the District Court, concluded that the suit was not ripe. Id. at 463-64. The Second Circuit affirmed. The Circuit explained that Schulz's lawsuit was not ripe because “[t]he IRS has not initiated any enforcement procedure against Schulz and, therefore, what amounts to requests do not threaten any injury to [him]. . . . [I]f the IRS should, at a later time, seek to enforce these summonses, then the procedures set forth in [the Internal Revenue Code] will afford Schulz ample opportunity to seek protection from the federal courts.” Id. at 464. Schulz's lawsuit was unfit for decision (because Schulz might never be compelled to produce documents) and lacking in hardship (because Schulz was not subject to any penalties for non-compliance).[16]

         The reasoning in Schulz applies equally to review of state action. In Google, Inc. v. Hood, the Fifth Circuit concluded that a federal challenge to a Mississippi state subpoena was not ripe because the state's subpoena was not self-executing and required judicial intervention before the recipient could be compelled to produce documents. 822 F.3d 212, 224-25 (5th Cir.2016). Relying on the same body of law cited in Schulz, the Fifth Circuit explained:

The only real difference is that we have before us a state, not federal, subpoena. But we see no reason why a state's non-self-executing subpoena should be ripe for review when a federal equivalent would not be. If anything, comity should make us less willing to intervene when there is no current consequence for resisting the subpoena and the same challenges raised in the federal suit could be litigated in state court.

Id. at 226. This Court agrees that a state's non-self-executing subpoena is not legally distinguishable for these purposes from the federal equivalent.

         Unlike in Schulz and Hood, Exxon has been compelled to comply with the CID, the Subpoena, and other subpoenas issued by the NYAG. See supra at 13-14. The Court recognizes that the record before Justice Ostrager is open to interpretation, but the NYAG conceded at oral argument that Exxon has been ordered to produce documents and give testimony. See Hr'g Tr. at 64-65. While the Subpoena was not self-executing, see N.Y. C.P.L.R. § 2308(b)(1) (“if a person fails to comply with a subpoena which is not returnable in a court, the issuer . . . may move in the supreme court to compel compliance”), Exxon could be subject to contempt sanctions for failing to comply with Justice Ostrager's orders. See N.Y. Jud. L. § 753(A)(1), (5); Matter of McCormick v. Axelrod, 59 N.Y.2d 574, 583 (1983) (a person or party may be held in contempt for violating “a lawful order of the court, clearly expressing an unequivocal mandate” if it is shown the party “had knowledge of the court's order” and the other party has been prejudiced). Even if Exxon has not been compelled to comply with the Subpoena itself, the parties have never questioned that Exxon has been required to comply with the NYAG's subsequent subpoenas for documents and testimony. See Hr'g Tr. at 6; Declaration of Leslie B. Dubeck (“Dubeck Reply Decl.”) (Dkt. 235) Ex. 6 (June 16, 2017 Hr'g Tr.) at 77. Likewise, the Superior Court in Massachusetts denied Exxon's motion to quash the CID and ordered Exxon to produce documents, meaning Exxon is currently subject to a court order to produce responsive documents. Exxon faces an immediate sanction for failure to comply with the Superior Court's order, which was not stayed pending appeal. See Mass. Decision at 13. It is only because of a stipulation between Healey and Exxon that Exxon has not been forced to comply with the CID.

         Because Exxon cannot refuse to respond to the document demands without consequence, Exxon's claims are ripe.

         2. Personal Jurisdiction

         Healey has moved to dismiss arguing that this court lacks personal jurisdiction over her. Exxon bears the burden of establishing personal jurisdiction. “‘Prior to trial, [] when a motion to dismiss for lack of jurisdiction is decided on the basis of affidavits and other written materials, the plaintiff need only make a prima facie showing.'” MacDermid, Inc. v. Deiter, 702 F.3d 725, 727 (2d Cir. 2012) (quoting Seetransport Wiking Trader Schiffarhtsgesellschaft MBH & Co., Kommanditgesellschaft v. Navimpex Centrala Navala, 989 F.2d 572, 580 (2d Cir. 1993)). The Court engages in a familiar two-step analysis, first determining whether plaintiffs have made a prima facie showing that the defendants would be subject to personal jurisdiction under the laws of the forum state and, if so, then determining whether exercise of jurisdiction would comport with the Due Process Clause of the Fourteenth Amendment. Id. The Court will construe “all pleadings and affidavits in the light most favorable to the plaintiff” and resolve “all doubts in the plaintiff's favor.” Penguin Group (USA) Inc. v. American Buddha, 609 F.3d 30, 34 (2d Cir. 2010) (citations omitted). On the other hand, the Court need not accept either party's legal conclusions as true, nor will it draw “argumentative inferences” in either party's favor. See Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 673 F.3d 50, 59 (2d Cir. 2012).

         Exxon alleges that the Court has specific personal jurisdiction over Healey pursuant to N.Y. C.P.L.R. § 302(a)(1) and (a)(2). That statute confers personal jurisdiction “over any non-domiciliary . . . who in person or through an agent[] transacts any business within the state or contracts anywhere to supply goods or services in the state.” “[T]o invoke jurisdiction under section 302(a)(1), plaintiff must demonstrate that defendant transacted business within New York State, and that that business had some nexus with this cause of action.” Philipp Bros., Inc. v. Schoen, 661 F.Supp. 39, 41 (S.D.N.Y. 1987). Jurisdiction under C.P.L.R. § 302(a)(1) is proper “so long as the defendant's activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted.'” Fischbarg v. Doucet, 9 N.Y.3d 375, 380 (2007) (quoting Deutsche Bank Sec., Inc. v. Mont. Bd. of Invs., 7 N.Y.3d 65, 71 (2006)). “No single event or contact connecting defendant[s] to the forum state need be demonstrated; rather, the totality of all defendants' contacts with the forum state must indicate that the exercise of jurisdiction would be proper.” CutCo Indus, Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986). Although this “is an objective inquiry, it always requires a court to closely examine the defendant[s'] contacts for their quality.” Licci v. Lebanese Canadian Bank, SAL, 20 N.Y.3d 327, 338 (2012).

         Exxon bases personal jurisdiction in this forum on Healey's attendance at the kickoff conference and press event for the AGs United for Clean Power on March 29, 2016, in New York.[17] Whether a single meeting in New York is sufficient to establish personal jurisdiction under Section 302(a)(1) depends on the significance of the meeting to the claim and the relationship between the meeting and the wrongful act. See Gates v. Pinnance Comm'cns Corp., 623 F.Supp. 38, 41-42 (S.D.N.Y. 1985) (whether a single meeting is adequate to establish jurisdiction depends on the circumstances). Jurisdiction is potentially appropriate on the basis of a single meeting when the meeting plays a ...


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