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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
In the Matter of the Application of the
PEOPLE OF THE STATE OF NEW YORK, by
ERIC T. SCHNEIDERMAN,
Attorney General of the State of New York,
Petitioner,

Index No. 451962/2016

IAS Part 61
Hon. Barry R. Ostrager

- against –
PRICEWATERHOUSECOOPERS LLP and
EXXON MOBIL CORPORATION,

Motion Sequence No. 4

Respondents.

MEMORANDUM OF LAW IN OPPOSITION TO
EXXON’S MOTION TO QUASH AND IN SUPPORT OF
THE OFFICE OF THE ATTORNEY GENERAL’S
CROSS-MOTION TO COMPEL

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TABLE OF CONTENTS

TABLE OF AUTHORITIES .......................................................................................................... ii
PRELIMINARY STATEMENT .................................................................................................... 1
FACTUAL BACKGROUND ......................................................................................................... 3
A.

OAG’s Investigation Concerns Exxon’s Representations To Its Investors ..................... 3
1. Exxon’s Representations To Investors Regarding Its Proxy Cost Analysis ........... 3
2. Exxon’s Internal Documents Do Not Support Its Public Representations ............. 6

B.

OAG’s Additional Subpoenas .......................................................................................... 9
1. OAG’s Second Subpoena Duces Tecum ................................................................ 9
2. OAG’s Testimonial Subpoenas............................................................................. 10

C.

Exxon’s Motion to Quash .............................................................................................. 12

ARGUMENT ................................................................................................................................ 13
A.

Exxon Should Be Compelled To Comply With OAG’s
Second Subpoena Duces Tecum .................................................................................... 14
1. OAG’s Subpoena Is Reasonably Related To Its Investigation ............................. 14
2. OAG’s Subpoena Is Not Unduly Burdensome ..................................................... 16
3. OAG Is Authorized To Issue Requests For Information or Interrogatories ......... 17
4. OAG’s Subpoena Is Not Preempted By Federal Law .......................................... 19

B.

This Court Should Compel the Testimony of the Records Witnesses ........................... 21

C.

This Court Should Compel the Testimony of Jason Iwanika,
An Imperial Oil Limited Witness .................................................................................. 23

CONCLUSION ............................................................................................................................. 25

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TABLE OF AUTHORITIES
Cases
A’Hearn v. Comm. on Unlawful Practice of Law, 23 N.Y.2d 916 (1969) .................................. 14
Abrams v. Thruway Food Mkt. & Shopping Ctr., Inc., 541 N.Y.S.2d 856 (2d Dep’t 1989) . 14,15
Airbnb, Inc. v. Schneiderman, 44 Misc. 3d 351 (Sup. Ct. Albany Cnty. 2014) .............. 14, 16, 18
Alfred E. Mann Living Tr. v. ETIRC Aviation S.a.r.L, Misc. 3d 1211(A),
2010 N.Y. Slip Op. 52476(U) (Sup. Ct. N.Y. Cnty. June 24, 2010) ................................ 16
All-Waste Sys., Inc. v. Abrams, 547 N.Y.S.2d 77 (2d Dep’t 1989) ............................................. 19
Am. Dental Coop., Inc. v. Attorney-General, 514 N.Y.S.2d 228 (1st Dep’t 1987)..... 2, 14, 17, 18
Anheuser-Busch, Inc. v. Abrams, 71 N.Y.2d 327 (1988) ............................................ 2, 13, 14, 18
Application of Slipyan, 208 Misc. 515 (Sup. Ct. N.Y. Cnty. 1955) ............................................ 19
Bank of Tokyo–Mitsubishi, New York Branch v. Kvaerner, 175 Misc. 2d 408
(Sup. Ct. N.Y. Cnty. 1998) ............................................................................................... 23
City of Albany Indus. Dev. Agency v. N.Y. State Comm’n on Gov’t Integrity,
144 Misc. 2d 342 (Sup. Ct. Albany Cnty. 1989) .............................................................. 15
Cuomo v. Clearing House Ass’n, L.L.C., 557 U.S. 519 (2009) .................................................. 21
Cuomo v. Dreamland Amusements, Inc., 22 Misc. 3d 1107(A), 2
009 N.Y. Slip. Op. 50062(U) (Sup. Ct. N.Y. Cnty. Jan. 6, 2009) .................................... 21
Cuomo v. Dreamland Amusements, Inc., No. 08 Civ. 7100 (JGK),
2008 WL 4369270 (S.D.N.Y. Sep. 22, 2008) ................................................................... 21
Gobeille v. Liberty Mut. Ins. Co., 136 S. Ct. 936 (2016) ............................................................ 21
Grande Prairie Energy LLC v. Alstom Power, Inc., 5 Misc. 3d 1002(A),
2004 N.Y. Slip Op. 51156(U) (Sup. Ct. N.Y. Cnty. Oct. 4, 2004) ............................. 23, 25
Grandview Dairy, Inc. v. Lefkowitz, 76 A.D.2d 776 (1st Dep’t 1980) ....................................... 18
Hogan v. Cuomo, 888 N.Y.S.2d 665 (3d Dep’t 2009) ................................................................ 13
Horn Constr. Co. v. Fraiman, 309 N.Y.S.2d 377 (1st Dep’t 1970) ............................................ 14
In re Kushner, 108 Misc. 2d 329 (Sup. Ct. N.Y. Cnty. 1981)..................................................... 18
Liberty Mut. Ins. Co. v. N.Y. Comm’n on Human Rights, 332 N.Y.S.2d 971
(1st Dep’t 1972) ................................................................................................................ 19
Mustaphalli Capital Partners Fund, LP v. People, Index No. 650845/14,
2014 WL 2417523 (Sup. Ct. N.Y. Cnty. May 23, 2014) .................................................. 15

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N.Y. State Comm’n on Gov’t Integrity v. Congel, 142 Misc. 2d 9
(Sup. Ct. N.Y. Cnty. 1988) ............................................................................................... 16
N.Y. State Joint Comm’n on Pub. Ethics v. Campaign for One N.Y., Inc.,
53 Misc. 3d 983 (Sup. Ct. Albany Cnty. 2016) ................................................................ 16
Oncor Commc’ns v. State, 636 N.Y.S.2d 176 (3d Dep’t 1996) .................................................. 21
People v. Applied Card Sys., Inc., 11 N.Y.3d 105 (2008)........................................................... 19
People v. Forsyth, 109 Misc. 2d 234 (Sup. Ct. N.Y. Cnty. 1981) .............................................. 21
People v. Greenberg, 946 N.Y.S.2d 1 (1st Dep’t 2012) ............................................................. 19
People v. Thain, 24 Misc. 3d 377 (Sup. Ct. N.Y. Cnty. 2009).................................................... 18
Roemer v. Cuomo, 888 N.Y.S.2d 669 (3d Dep’t 2009) .............................................................. 14
Standard Fruit & S.S. Co. v. Waterfront Comm’n of N.Y. Harbor, 43 N.Y.2d 11 (1977) .......... 23

Statutes
Executive Law § 63(12) ........................................................................................................ 17, 18
General Business Law § 352(4) .................................................................................................. 21
General Business Law § 352(1) .............................................................................................. 2, 17
State Financial Law § 2(6-a) ...................................................................................................... 10
Other Authorities
Financial Accounting Standards Board, Accounting Standards Codification 360-10-35-30 ..... 20

Regulations
17 C.F.R. § 210.4-10 ..................................................................................................................... 20
17 C.F.R. § 229.1202 .................................................................................................................... 20
Instruction to 17 C.F.R. § 229.1202 (Item 1202).......................................................................... 20

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PRELIMINARY STATEMENT
The Office of the Attorney General (“OAG”) respectfully submits this memorandum of
law in opposition to Exxon Mobil Corporation’s (“Exxon”) motion to quash and in support of
OAG’s cross-motion to compel compliance with its subpoena duces tecum dated May 8, 2017,
its testimonial subpoena to a fact witness from Exxon’s majority-owned subsidiary, Imperial Oil
Limited (“Imperial”), and four records witnesses.
OAG is investigating whether Exxon has been making false and misleading statements
about specific safeguards it purports to have put in place to protect the company from risks posed
by future climate change-related regulations. Specifically, Exxon has repeatedly represented to
investors that the company applies a “proxy cost” to greenhouse gas emissions (“GHGs”) when
it makes investment decisions and performs asset valuations, and that because it does so, it can
assure investors that none of Exxon’s projects or assets will be materially impacted by future
climate change-related regulations. Contrary to Exxon’s unsupported assertion that nothing in its
production to date justifies OAG’s continued investigation into the accuracy of such
representations, OAG has uncovered significant evidence of potential materially false and
misleading statements by Exxon about its application of a proxy cost of GHGs to its investment
and impairment1 decisions, suggesting that the exercise described to investors may be a sham.
OAG’s present subpoenas, which Exxon now seeks to quash, are highly relevant to
determining whether Exxon has in fact been misleading investors, as its own documents suggest.
The subpoena duces tecum seeks targeted information and documents needed to fill the gaps in
the existing document productions concerning Exxon’s risk-management practices related to the
company’s investments and asset valuations. The testimony of the records witnesses is critical to

1

An impairment is a reduction in the recoverable amount of an asset below its book value. Affirmation of John
Oleske, dated June 1, 2017 (“Oleske Aff. ¶ __” or “¶ __”) ¶¶ 42-47.

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understanding and potentially remedying Exxon’s still-unaccounted-for destruction of documents
from key custodians, including the company’s former Chairman and CEO. The testimony of the
fact witness from Imperial is highly relevant to OAG’s investigation given that Exxon’s
documents reflect that he was directed by Exxon not to apply a proxy cost of GHGs to its
Canadian oil sands projects. As such, OAG’s subpoenas easily meet the well-established legal
standard in that they are reasonably related to OAG’s investigation. See Am. Dental Coop., Inc.
v. Attorney-General, 514 N.Y.S.2d 228, 232 (1st Dep’t 1987).
Unable to contest the authority of the Attorney General, the factual basis for his
investigation, or the relevance of the documents and information sought by the subpoena duces
tecum, Exxon resorts to arguing that the subpoenas are unduly burdensome, make improper
demands for information, and are preempted by federal law. None of these arguments has merit.
Exxon does not even try to make the required showing to establish undue burden, OAG’s
requests for information are explicitly authorized by statute,2 and none of OAG’s prospective
enforcement actions against Exxon under New York’s anti-fraud laws are subject to federal
preemption. Thus, Exxon falls far short of meeting the legal standard required to quash a
subpoena. See Anheuser-Busch, Inc. v. Abrams, 71 N.Y.2d 327, 332 (1988) (holding “[a]n
application to quash a subpoena [issued by OAG] should be granted only where the futility of the
process to uncover anything legitimate is inevitable or obvious or where the information sought
is utterly irrelevant to any proper inquiry.”).
Exxon’s motion to quash is the latest maneuver in its longstanding strategy to avoid and
delay the production of documents, information, and testimony directly relevant to OAG’s

Gen. Bus. Law. § 352(1) (OAG “may . . . require such other data and information as [it] may deem relevant[.]”);
Anheuser-Busch, Inc. v. Abrams, 71 N.Y.2d 327, 330 (1988) (holding that OAG’s interrogatories were valid).
2

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investigation.3 Despite Exxon’s obstruction and obfuscation, OAG’s investigation has persisted,
and based on the evidence that Exxon has produced, the investigation has gained urgency. That
evidence suggests not only that Exxon’s public statements about its risk management practices
were false and misleading, but also that Exxon may still be in the midst of perpetrating an
ongoing fraudulent scheme on investors and the public. Accordingly, OAG’s cross-motion to
compel should be granted and Exxon’s motion to quash should be denied in its entirety.
FACTUAL BACKGROUND
A. OAG’s Investigation Concerns Exxon’s Representations To Its Investors
1. Exxon’s Representations To Investors Regarding Its Proxy Cost Analysis
OAG is investigating the accuracy of Exxon’s representations concerning its risk
management practices that purport to address the impact of climate change and climate change
regulations on its business and financial reporting. One aspect of OAG’s investigation concerns
Exxon’s numerous representations to investors that in its economic decision-making, including
its investment decisions and asset valuations, the company applies a “proxy cost” of GHG
emissions that reasonably approximates the range of potential future government actions with
respect to climate change. Although the specific language Exxon has used has changed over
time, the overall message has remained the same: because Exxon incorporates the added proxy

3

Since November 2015, Exxon has (i) stonewalled the collection and production of relevant and responsive
documents, requiring OAG to seek relief from this Court on five separate occasions; (ii) failed to preserve and
consequently destroyed years of responsive documents from more than a dozen key management witnesses,
including Exxon’s former CEO; (iii) proffered witnesses for testimony who lacked basic knowledge about Exxon’s
preservation, collection, review, production, and recovery of relevant documents; (iv) commenced an unprecedented
lawsuit in federal court to enjoin OAG’s enforcement of its original subpoena on the grounds that it violates Exxon’s
constitutional rights; and (v) obstructed the production of documents from its independent auditor on the grounds of
a non-existent privilege.
With respect to the latter, on May 23, 2017, the First Department affirmed this Court’s order compelling subpoena
compliance by Exxon and its independent auditor on the ground that New York law, which does not recognize any
accountant-client privilege, governed the enforcement proceeding. Continuing in its effort to avoid production of
these documents from its independent auditor, Exxon has moved for reargument from the First Department and
leave to appeal its decision to the Court of Appeals, and has obtained an emergency stay of enforcement during the
motion’s pendency.

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costs of GHGs in its decisions to undertake exploration and development projects, and
incorporates these added costs in the valuation of its existing assets, the company can assure
investors that none of Exxon’s projects or assets will be materially affected by future climate
change-related regulations.
Exxon has represented that it has been applying a proxy cost of GHGs to its business
decisions since 2007. ¶ 13. Exxon further represents that its proxy cost of GHGs increases
substantially over time, reaching as high as $80/ton of carbon dioxide equivalent (i.e., CO2 or
other GHGs) by 2040. ¶¶ 13-14. Because Exxon’s major oil and gas projects often span
decades, the proxy cost of GHGs can have a material effect on the long-term profitability of
Exxon’s projects and the value of its assets. ¶ 20.
On March 31, 2014, Exxon published a report entitled Energy and Carbon—Managing
the Risks (the “MTR Report”) in response to shareholder demands that the company assess the
vulnerability of its assets to future climate regulation. Indeed, a shareholder group withdrew a
proposed resolution that it intended to submit at the company’s 2014 annual shareholders
meeting in exchange for Exxon’s commitment to publish such a report. ¶ 7. In the MTR Report,
Exxon explained its purported use of proxy-cost analysis as follows:
We also address the potential for future climate-related controls,
including the potential for restriction on emissions, through the use
of a proxy cost of carbon. This proxy cost of carbon is embedded in
our current Outlook for Energy, and has been a feature of the report
for several years. The proxy cost seeks to reflect all types of actions
and policies that governments may take over the Outlook period
relating to the exploration, development, production, transportation
or use of carbon-based fuels. Our proxy cost, which in some areas
may approach $80/ton over the Outlook period, is not a suggestion
that governments should apply specific taxes. . . . . It is simply our
effort to quantify what we believe government policies over the
Outlook period could cost to our investment opportunities. Perhaps
most importantly, we require that all our business segments include,
where appropriate, GHG costs in their economics when seeking

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funding for capital investments. We require that investment
proposals reflect the climate-related policy decisions we anticipate
governments making during the Outlook period and therefore
incorporate them as a factor in our specific investment decisions.
¶ 10, Ex. 1 (emphasis added). After explaining this purported risk management practice, Exxon
claimed that “[b]ased on this analysis, we are confident that none of our hydrocarbon reserves
are now or will become ‘stranded’” and that “the company does not believe current investments
in new reserves are exposed to the risk of stranded assets[.]” ¶ 9, Ex. 1.
Since it published the MTR Report, Exxon has continued to represent to investors in
various public filings, publications, and statements that it employs the proxy cost analysis in
evaluating investment decisions. ¶¶ 12-17. Even after the issuance of OAG’s initial subpoena in
November 2015 (the “2015 Subpoena”), which specifically requested documents relating to the
MTR Report, Exxon has continued to make such representations to the public and investors. For
example, former Chairman and CEO Rex Tillerson told attendees of the company’s May 25,
2016 annual shareholders meeting that “everything gets tested” against the purported proxy cost
analysis. ¶ 16, Ex. 2. The official notice to shareholders for the same meeting stated that Exxon
has been applying the proxy cost analysis to safeguard the company’s value since 2007. ¶ 15.
Exxon has repeated its proxy cost representations in multiple 10-Ks, multiple submissions to the
Carbon Disclosure Project,4 its annual Outlook for Energy public reports, a recent report it issued
in March 2017 entitled 2016 Energy and Carbon Summary, and in materials and statements

The Carbon Disclosure Project (“CDP”) is a United Kingdom-based nongovernmental organization that runs a
global disclosure system that enables companies and governments to measure and manage their
environmental impacts. CDP’s data enables its network of investors, supply chain purchasers and policy
makers to link environmental integrity, fiduciary duty and public interest to make better -informed decisions
on climate action. Thousands of corporations voluntarily report their GHG emissions to the CDP. Each year
Exxon submits answers to questions about climate change posed by the CDP.
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provided to investors in connection with the company’s annual shareholder meeting held on May
31, 2017.5 ¶¶ 17, 19.
Moreover, Exxon has also represented that, as required by Generally Accepted
Accounting Principles (“GAAP”), the company applies the same assumptions when it evaluates
its reserves and other assets for impairment as it does in the rest of its business determinations,
including decisions on potential investments. ¶ 45, Ex. 12.
2. Exxon’s Internal Documents Do Not Support Its Public Representations
OAG’s ongoing review of evidence, including the documents produced by Exxon in
response to the 2015 Subpoena, has revealed that those documents contradict Exxon’s
representations about the application of a proxy cost of GHGs to the company’s investment and
asset valuation decisions may be false and misleading. ¶¶ 20-59.
Internal documents produced by Exxon reveal that from at least 2010 through
approximately June 2014, Exxon told its investors it used one set of proxy-cost figures, when in
fact the company’s internal policies set forth a second set of lower proxy costs (and therefore a
less risk-sensitive version) for use in its internal business planning. ¶¶ 21-27. Exxon actually
recognized that its secret, internal figures understated the degree to which Exxon was taking into
account the risks of climate change regulations, and thus, were not as conservative as its
representations to investors suggested when applied to the vast majority of projects emitting
GHGs. ¶¶ 23-25, Exs. 3-5. Nonetheless, as it admitted in an internal presentation in May 2014,
Exxon continued to represent to investors and the public that it used the higher proxy cost
reflected in its public disclosures. ¶ 25, Ex. 5. Exxon’s documents show that former Chairman

At the May 31, 2017 shareholder meeting, despite opposition from Exxon’s management, the New York
Comptroller’s shareholder resolution seeking to require the company to publish an annual assessment of the longterm financial impacts of technological advances and climate change policies consistent with the globally agreed
upon 2-degree Celsius target passed with a vote of 62.3% for and 37.7% against. ¶ 18.
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and CEO Rex Tillerson was specifically informed of, and approved of, this inconsistency. ¶ 24,
Ex. 4. Although Exxon ended this practice in 2014, and transitioned to using the publicly-stated
proxy cost figures for internal analyses, ¶ 25, Ex. 5, Exxon did not tell investors about its secret
internal set of proxy cost formulas when it represented in 2016 that it had been applying the
proxy cost analysis since 2007, ¶ 27.
Moreover, it appears that Exxon did not even follow its deficient internal policies. OAG
has not identified any documents in Exxon’s production reflecting the consistent application of a
proxy cost of GHGs to its investment and asset valuation decisions, whether in conformity with
Exxon’s publicly-stated representations or with its secret internal versions of proxy costs.6
Rather, as to most such decisions, there appear to be no documents reflecting a proxy cost
analysis at all. Indeed, despite OAG specifically asking for such information for nearly a year,
Exxon has identified only a single, anomalous example. ¶ 37, Exs. 7-8.7 In other instances,
Exxon applied GHG costs that were a small fraction of the company’s publicly disclosed proxy
cost figures. For example, with regard to Exxon’s oil sands investments in Alberta, Canada,
documents show that instead of applying its publicly-stated proxy cost that rises to an endpoint
as high as $80/ton in 2040, Exxon applied the much lower GHG taxes then in place in Alberta
and held those figures flat indefinitely into the future. This substitution resulted in the alleged
proxy cost of GHGs being reduced to a small fraction of what Exxon told investors would be
applicable. ¶¶ 29-33. Exxon’s use of the lower GHG taxes instead of its publicly-stated proxy
costs is particularly telling because Exxon’s own documents suggest that if Exxon had applied

Exxon’s assertion that it “has produced numerous documents responsive to the Attorney General’s prior requests
that reflect the actual application of the precise figures used in the policies to company-sponsored projects,”
Anderson Aff. ¶ 2, is unsupported by a cite to a single document.
6

7

In that instance, Exxon applied a proxy cost to a project where Exxon was selling carbon dioxide to other
operators, and thus, the application of the proxy cost increased the project’s projected profitability. ¶ ¶ 37, Exs. 7-8.

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the proxy cost it promised to shareholders, at least one substantial oil sands project may have
projected a financial loss, rather than a profit, over the course of the project’s original timeline.
¶ 29.8
As to Exxon’s general policies, OAG has located only one internal summary document
published annually that reflects a company mandate to apply a proxy cost analysis to investment
and valuation decisions.9 ¶ 36 (two pages in the company’s annual Corporate Plan Dataguide
Appendix that does little more than list the purportedly-applicable proxy costs across geographic
regions and timeframes). OAG has not located any specific documents in Exxon’s production
that provide any guidance on the application of this proxy cost policy. Indeed, the evidence
indicates a widespread lack of awareness among employees of the proxy cost policy, or how it
should be applied. Id.
Similarly, although Exxon represents that it applies the same assumptions to impairment
decisions as it does with respect to other business decisions, including investment decisions, in
accordance with GAAP, the few documents Exxon has produced to date do not reflect any
attempt at all to apply a proxy cost analysis to impairment decisions, including as to oil and gas
reserves. ¶ 49. Documents produced by Exxon’s independent auditor, PricewaterhouseCoopers
LLP (“PwC”) suggest that Exxon simply did not do what it told investors – it did not apply a
proxy cost to its valuation or impairment analyses, including to its evaluation of its reserves and
other hydrocarbon assets, prior to 2016. ¶ 50.

8

In addition, despite representing to investors that the proxy-cost analysis included prospective regulations on
emissions caused by the “use” of fossil fuels such as electricity generation or motor-fuel combustion, also known as
“Scope 3” emissions, ¶ 38, Exxon’s documents indicate that even in the few instances where employees applied
some form of a proxy cost analysis, the proxy-cost calculation omitted Scope 3 emissions. Id., Ex. 10. These
emissions account for 90% of all fossil-fuel greenhouse gases. ¶ 39.
This is the same document that Exxon references in its motion to quash. Exxon’s Brief in Support of Its Motion to
Quash and For a Protective Order (“Exxon Br.”) at 16.
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B. OAG’s Additional Subpoenas
On May 8, 2017, OAG issued a second subpoena duces tecum and nine testimonial
subpoenas. ¶¶ 107, 117-19.
1. OAG’s Second Subpoena Duces Tecum
The subpoena duces tecum includes requests for information (“Interrogatories”) and for
documents. ¶ 107. The Interrogatories seek details about Exxon’s purported application of its
proxy cost analysis to its investment decisions and evaluation of assets, along with an
identification of individuals assigned to various committees overseeing the company’s reserves.
¶ 108. The Interrogatories are targeted to elicit specific information relevant to Exxon’s
purported application of proxy costs to all of its investment, valuation, and impairment decisions.
¶ 109 (Interrogatory Nos. 1, 3, 4, and 6.) Exxon either took the risk of climate change
regulations into account or it didn’t. If, as OAG’s investigation to date suggests, Exxon did not
apply a proxy cost in most instances, there will be no additional details for Exxon to provide in
response to these Interrogatories. ¶¶ 109-116. If Exxon did in fact apply a proxy cost analysis to
any of these decisions, OAG is entitled to information that would reveal details about whether,
for example, Exxon: (i) applied a lower proxy cost than it publicly represented to investors; (ii)
applied a proxy cost to only a fraction of GHG emissions from a given project; (iii) applied a
proxy cost to only certain GHGs and not others; (iv) applied a proxy cost to only direct
emissions as opposed to emissions stemming from end use of the oil and gas; and/or (v) assumed
that it could pass-through most or all of the proxy cost to its customers, while unreasonably
assuming that such pass-through would have no effect on demand for its products. The
documents Exxon has produced to date appear to reflect each of these practices, any one of
which could render Exxon’s purported proxy-cost analysis a meaningless sham. ¶ 34. OAG’s

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interrogatories call for information and data that would identify which of these practices were
used with respect to any decisions for which Exxon claims that it applied a proxy cost of GHGs.
¶ 110 (Interrogatory Nos. 2, 5, & 7.)
The document requests seek four major categories of documents. First, OAG seeks
documents relating to the use and application of a proxy cost of GHGs from the post-November
2015 period. Such documents are relevant to Exxon’s continuing proxy-cost-related
representations, and any related changes in the company’s practices. ¶ 113. Second, OAG seeks
documents that Exxon previously produced to the Securities and Exchange Commission (“SEC”)
relating to impairment decisions, reserves calculations, and climate change, a request that
imposes no appreciable burden on Exxon. ¶ 114. Third, OAG seeks documents that were
exchanged between Exxon and financial institutions relating to impairment decisions, reserves
calculations, and climate change. Such documents would include communications with equity
research departments that would form the basis for analyst reports and other information
considered by investors in their investment decisions. ¶ 115. Finally, OAG seeks documents
related to the company’s asset valuation and impairment practices for its long lived assets,10
particularly its hydrocarbon assets.11 ¶ 115.
2. OAG’s Testimonial Subpoenas
Five of the nine testimonial subpoenas seek testimony from fact witnesses. Four of these
are for fact witnesses employed directly by Exxon, ¶ 118, and one is for a fact witness employed

10

A long lived or fixed asset is any asset that a business expects to retain for at least one year. See generally N.Y.
State Fin. Law § 2(6-a).
11

Although PwC produced certain documents on these topics, it is necessary to obtain the requested documents
from Exxon because the documents produced to date show that (1) Exxon does not share with PwC all relevant
documents on this topic, including many of the cash flow models Exxon uses for impairment-related purposes; (2) in
other cases, PwC was shown such documents, but Exxon did not permit PwC to retain them; (3) PwC does not
possess drafts of relevant Exxon documents such as impairment memoranda and asset recoverability reviews; and
(4) PwC does not possess related internal Exxon communications. ¶¶ 53-54.

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by Exxon’s majority-owned subsidiary, Imperial Oil Limited (“Imperial”) in Canada. ¶ 119.
The remaining four testimonial subpoenas are for document custodians.
Confronted with Exxon’s failure to preserve subpoenaed documents and the resulting
destruction of untold numbers of documents from over a dozen key custodians, this Court
ordered Exxon to produce an affidavit from a records custodian detailing Exxon’s preservation,
collection, production, and recovery of documents from Exxon’s Management Committee and
other sources of management documents. ¶ 57. Pursuant to this Court’s March 23, 2017 order, a
senior Exxon Information Technology employee, Connie Feinstein, submitted an affidavit
describing the steps taken to preserve and search for Exxon’s management documents, the failure
to preserve such documents, the consequent destruction of those documents, and data-recovery
efforts. Id. Exxon also offered the testimony of its outside counsel, Michele Hirshman, in
response to an OAG subpoena concenring compliance with the 2015 Subpoena. Id.
The testimony of Ms. Feinstein and Ms. Hirshman made clear that Exxon failed to take
the required steps to locate, preserve, and recover critical electronically-stored information from
key custodians, including former Chairman and CEO Rex Tillerson. ¶¶ 55-65, 72-86, 99-106.
For example, during Ms. Hirshman’s testimony, she testified that she knew in “early 2016” about
the second email address for Rex Tillerson – the Wayne Tracker email address –and that she did
not disclose that email address to OAG, stating that it would “be an interesting test of whether
the Attorney General’s office is reading the documents.” ¶ 76, Ex. 16 (Hirshman Tr.) at 134
(emphasis added). Ms. Hirshman further testified that neither she nor her firm made any attempt
to look further into the preservation, collection or production of documents of the Wayne
Tracker email address at that time. The consequence of this failure was months of automatic
destruction of relevant correspondence involving Mr. Tillerson. Id. at 141-42.

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When OAG took the testimony of Ms. Feinstein about the information in her affidavit, it
quickly became apparent that she knew little about Exxon’s preservation, collection, production,
and recovery of the management documents. ¶¶ 99-105. However, during the course of her
testimony, she identified four records witnesses who were likely to have information relevant to
OAG’s questions. Id.12 These four witnesses are the subject of four of OAG’s nine testimonial
subpoenas.
C. Exxon’s Motion to Quash
After serving these subpoenas, OAG attempted to engage in a meet-and-confer call with
Exxon’s counsel to discuss the company’s compliance with the subpoenas. ¶ 121. During that
meet-and-confer, Exxon refused to discuss complying with any of the requests in the subpoena
duces tecum. ¶ 125.13 When OAG asked whether Exxon would consider responding to
narrowed requests, Exxon stated that it would only discuss production on more limited requests
if OAG withdrew its subpoena. ¶ 128. Exxon also stated that the records witness subpoenas
were unnecessary because the testimony of Ms. Feinstein and Ms. Hirshman provided sufficient
information about Exxon’s subpoena compliance, despite the fact that the testimony of both

12

Ms. Feinstein was unable to provide any specifics for any of six of the topics in the subpoena and for which
Exxon proffered her as a witness. Instead, in response to almost every request for specific information on the six
topics, Ms. Feinstein identified other individuals as responsible for those areas. She testified that (i) Ms. Helble was
responsible for the creation of the Wayne Tracker alias account; (ii) Mr. Lauck was responsible for the identification
and preservation of Management Committee documents, and the completely different manner Exxon used to collect
those documents; (iii) Ms. Leong was responsible for the automatic deletion “file sweep” tool, as well as the email
servers and back up locations needed for forensic recovery of Wayne Tracker emails; and (iv) Mr. Bolia has
personal knowledge of the matters set out in 29 of the 60 paragraphs in Ms. Feinstein’s affidavit, including those
concerning the implementation of the different search protocols employed for Management Committee custodians,
implementation of the first, second, third, and fourth searches of Management Committee records, the discovery of
Exxon’s failure to exempt the Wayne Tracker email account from the “file sweep” tool, and attempts to remediate
the loss of Wayne Tracker emails. ¶¶ 99-105.
13
When OAG pointed out that Interrogatory No. 9 asked only for a list of names of individuals on indisputably
relevant internal committees, Exxon refused to discuss complying with even that request, citing “overarching
fundamental concerns.” ¶ 126. When OAG also pointed out that document request No. 5 would require Exxon to
do nothing more than provide OAG with a copy of a previous production made to the SEC, Exxon again declined,
on the same basis. ¶ 127.

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revealed their lack of knowledge of key aspects of the preservation, collection, and production
process, and Ms. Feinstein identified other individuals who were more directly involved in the
process. ¶ 129.
Rather than engage in a good faith effort to address any objections relating to undue
burden, over breadth, or relevance, Exxon instead filed its motion to quash the subpoena duces
tecum and the four records witness subpoenas. Since filing its motion, Exxon has also asserted
that it will not comply with the subpoena for testimony of the witness from Imperial on the
purported ground that it lacks sufficient control over Imperial to compel the witness’s attendance
– despite the fact that Exxon produced documents from Imperial and this witness, many of which
are highly relevant to whether Exxon applied a lower GHG tax as compared to the higher,
publicly-stated, proxy cost of GHGs to its Canadian oil sands projects. ¶¶ 29-33.
ARGUMENT
The Court of Appeals has held that “[a]n application to quash a subpoena [issued by
OAG] should be granted only where the futility of the process to uncover anything legitimate is
inevitable or obvious or where the information sought is utterly irrelevant to any proper inquiry.”
Anheuser-Busch, Inc. v. Abrams, 71 N.Y.2d 327, 332 (1988) (emphasis added) (internal
citations, quotation marks, and brackets omitted); see also id. (where there is uncertainty about
the legality of the conduct being investigated, the Attorney General has authority to issue a
subpoena “unless the legality of the . . . practice is so well established . . . as to be free from
doubt.”); Hogan v. Cuomo, 888 N.Y.S.2d 665, 668 (3d Dep’t 2009) (even “where legality of

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underlying conduct is arguable, [Attorney General’s] power to investigate possible violations
must be sustained”).14 Exxon falls far short of meeting this standard.15
A. Exxon Should Be Compelled To Comply With OAG’s
Second Subpoena Duces Tecum
OAG’s subpoena duces tecum was carefully tailored to obtain the information and
documents relevant to the apparent contradictions between Exxon’s public representations
concerning its risk-management practices and its actual internal practices. Exxon’s conclusory
arguments that OAG’s requests for information and documents have no factual basis, are unduly
burdensome and disproportionate, and are preempted by federal law are meritless.
1. OAG’s Subpoena Is Reasonably Related To Its Investigation
Courts apply a presumption that the Attorney General is acting in good faith when
commencing an investigation and issuing a subpoena. See, e.g., Anheuser-Busch, 71 N.Y.2d at
332; Roemer v. Cuomo, 888 N.Y.S.2d 669, 671 (3d Dep’t 2009); Abrams v. Thruway Food Mkt.
& Shopping Ctr., Inc., 541 N.Y.S.2d 856, 858 (2d Dep’t 1989); Am. Dental Coop., Inc. v.
Attorney-General, 514 N.Y.S.2d 228, 232 (1st Dep’t 1987). “[A]ll that the Attorney-General

This standard, rather than any rule of proportionality, governs the enforceability of OAG’s subpoenas, and the
cases cited by Exxon, see Exxon Br. at 15, are not to the contrary. See Airbnb, Inc. v. Schneiderman, 44 Misc. 3d
351, 356 (Sup. Ct. Albany Cnty. 2014) (New York courts will limit a subpoena only to the extent requests are
unrelated to the statute under which State was investigating); Myerson v. Lentini Bros. Moving & Storage Co., 33
N.Y.2d 250, 258 (1973) (agency issuing subpoena is not “required to establish a strong and probative basis for
investigation, let alone probable cause”); A’Hearn v. Comm. on Unlawful Practice of Law, 23 N.Y.2d 916, 919
(1969) (subpoena enforceable if there is “reasonable ground to believe that there was illegal” conduct); Horn Constr.
Co. v. Fraiman, 309 N.Y.S.2d 377, 379 (1st Dep’t 1970) (even “after extensive examination of witnesses,” State
need only show a “reasonable relationship” between subsequent document requests and objective of investigation).
Here, the subpoena duces tecum is reasonably related to determining whether Exxon, consistent with its public
statements, applied a proxy cost of GHGs to its investment and impairment decisions and its internal reserve
estimates.
14

All that is required to grant OAG’s cross-motion to compel and deny Exxon’s motion to quash is an OAG
affirmation regarding its ongoing investigation, Here, OAG additionally presents certain of its investigative findings
in this memorandum and accompanying affirmation to demonstrate the extent to which Exxon’s assertion that there
is no basis for OAG’s investigation is entirely baseless. In fact, Exxon’s own documents make clear that there is
good reason for OAG to continue to investigate whether Exxon is engaged in an ongoing fraud.
15

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need show in support of his subpoena . . . is his authority, the relevance of the items sought, and
some factual basis for his investigation.” Id.16
Here, there can be no question that the Attorney General has the authority to investigate
violations of New York law,17 and that misrepresentations by Exxon to the public and investors
about Exxon’s application of a proxy cost analysis may violate New York law, including the
Martin Act and the Executive Law. Moreover, the subpoena duces tecum is reasonably related
to OAG’s investigation. OAG’s investigation of Exxon, which was initiated as a result of
Exxon’s representations to the investing public about how it is managing the risks posed by
climate change-related regulations to its business, has revealed substantial inconsistencies
between Exxon’s public statements and its internal practices. OAG’s requests were carefully
crafted to obtain specific information and documents relevant to those inconsistencies.
The fact that OAG has already obtained documents from Exxon and others does not alter
this standard, as New York courts continue to apply the same principles in evaluating follow-on
subpoenas issued in ongoing investigations. For example, in Mustaphalli Capital Partners
Fund, LP v. People, Index No. 650845/14, 2014 WL 2417523 (Sup. Ct. N.Y. Cnty. May 23,
2014), the court applied this standard and enforced a second subpoena for documents in an
ongoing Martin Act investigation, notwithstanding the recipient’s claim that OAG already had
sufficient information to determine whether there had been any actionable violations.18

16

Notably, probable cause that an illegal act was committed is not required. See, e.g., Roemer, 888 N.Y.S.2d at 670
(Attorney General need only show “some factual basis for his investigation”); Thruway Food Mkt., 541 N.Y.S.2d at
858 (Attorney General “is not required to establish the existence of probable cause” to issue a subpoena).
Exxon does not dispute OAG’s authority to issue the subpoenas.
See also City of Albany Indus. Dev. Agency v. N.Y. State Comm’n on Gov’t Integrity, 144 Misc. 2d 342, 344-45
(Sup. Ct. Albany Cnty. 1989) (refusing to quash State commission’s subpoena, which required “searching through
‘hundreds of thousands’ of documents,” with respect to an investigation that was already “well underway”; holding
that the State had “satisfactorily established that the documents sought in each of the challenged paragraphs are
reasonable in breadth and relevant and material to the issues under inquiry”).
17
18

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2. OAG’s Subpoena Is Not Unduly Burdensome
Unable to challenge the authority of the Attorney General, the factual basis for his
investigation, or the relevance of the documents and information sought by the subpoena, Exxon
resorts to objecting to the subpoena on the ground that it imposes an undue burden, without
setting forth any facts supporting such objection. The cases are clear that a subpoena recipient
cannot simply make general claims that the subpoena is unduly burdensome, but rather must
substantiate these claims. Alfred E. Mann Living Tr. v. ETIRC Aviation S.a.r.L, Misc. 3d
1211(A), 2010 N.Y. Slip Op. 52476(U), at *5 (Sup. Ct. N.Y. Cnty. June 24, 2010) (motion to
quash denied where petitioner’s “vague and conclusory assertions that the Subpoena is vastly
overbroad and burdensome is not persuasive.”); N.Y. State Joint Comm’n on Pub. Ethics v.
Campaign for One N.Y., Inc., 53 Misc. 3d 983, 1000 (Sup. Ct. Albany Cnty. 2016)
(“Notwithstanding [petitioner’s] complaints about the breadth of the subpoena, it has not made
any showing compliance would present to [petitioner] an undue burden of time or money.”);
Airbnb, Inc. v. Schneiderman, 44 Misc. 3d 351, 359 (Sup. Ct. Albany Cnty. 2014) (holding that
petitioner “failed to demonstrate that the subpoena is unduly burdensome” because it “failed to
establish, other than via conclusory assertion, that [requested] information is not collected by
petitioner or readily accessible by petitioner”).19
Similarly, here, Exxon has made only conclusory allegations that the subpoena is overly
broad and unduly burdensome, without providing any factual support for such allegations.
Moreover, contrary to Exxon’s claim that OAG is seeking records for “every oil and gas
investment decision it has made over the last 12 years,” OAG has limited its request to instances

“The judicial remedy for an attack upon an overly broad subpoena . . . is not to quash the subpoena in its entirety,
but to modify it so that the materials demanded are reasonably within the agency’s subpoena power.” N.Y. State
Comm’n on Gov’t Integrity v. Congel, 142 Misc. 2d 9, 16 (Sup. Ct. N.Y. Cnty. 1988).
19

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relating to Exxon’s decision to apply proxy costs to its investment and impairment decisions.
OAG expects that Exxon’s responses to the Interrogatories will narrow, rather than expand, the
need for additional documents because OAG’s investigation to date indicates that there are few
instances in which Exxon actually applied proxy costs to its investment or impairment decisions.
¶ 28. In any event, OAG has conveyed to Exxon that it is willing to narrow its document
requests if Exxon identifies a more efficient means of responding to the subpoena. Accordingly,
Exxon should be compelled to comply with OAG’s subpoena duces tecum.20
3. OAG Is Authorized To Issue Requests For Information or Interrogatories
Exxon’s claim that OAG lacks the authority to issue interrogatories is unavailing. OAG
has the express statutory authority to request information from subpoena recipients. The Martin
Act provides that, in addition to the Attorney General’s power to require testimony and the
production of books and records, OAG “may . . . require such other data and information as [it]
may deem relevant[.]” Gen. Bus. Law § 352(1). It further provides that OAG may require a
potential violator to file “a statement in writing . . . as to all the facts and circumstances
concerning the subject matter, and for that purpose may prescribe forms upon which such
statements shall be made.”21 Id. Executive Law § 63(12) likewise authorizes OAG to “take
proof and make a determination of the relevant facts.” In Am. Dental Co-op., Inc. v. Attorney
General, the First Department, citing Executive Law § 63(12) and General Business Law § 343
(the “Donnelly Act”), confirmed that OAG’s “investigatory power includes the right to issue

Recognizing that it cannot satisfy the high legal standard for quashing OAG’s subpoenas, Exxon moves, in the
alternative, for a protective order limiting the subpoenas. Exxon’s request for such relief also should be denied
because it has failed to put forth any facts that support its claim of undue burden and it has failed to meet-and-confer
in good faith to attempt to narrow the scope of the Subpoena.
20

Whether Exxon’s prospective responses are considered written testimony or responses to interrogatories, the result
is the same: Exxon is legally obligated under the Martin Act to answer in writing the questions posed by OAG.
21

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subpoenas and serve interrogatories.” 514 N.Y.S.2d at 279.22 The court in People v. Thain
reached the same conclusion with respect to a Martin Act subpoena. 24 Misc. 3d 377, 389-90
(Sup. Ct. N.Y. Cnty. 2009) (holding that recipient of subpoena was required to compile and
provide a list containing employee bonus-related information to OAG).
Courts have long upheld OAG’s authority to issue interrogatories under its investigative
powers, including subpoenas that include interrogatories with specific instructions designed to
elicit written responses that address precisely the matter that OAG is investigating. See, e.g.,
Anheuser-Busch, 71 N.Y.2d at 330 (holding that OAG’s interrogatories were valid); Grandview
Dairy, Inc. v. Lefkowitz, 76 A.D.2d 776, 777 (1st Dep’t 1980) (holding that detailed instructions
accompanying Donnelly Act interrogatories were “essential if interrogatories are to serve as a
useful tool for gathering evidence against a corporate entity” and noting that “[w]ithout the
instructions the interrogatories might well be stripped of all efficacy through evasiveness and
nonresponsiveness by the corporate officer answering the interrogatories”); Airbnb, 44 Misc. 3d
at 359 (holding that OAG’s interrogatories, issued pursuant to Executive Law § 63(12), about
numerous Airbnb hosts and specific rentals were not unduly burdensome); In re Kushner, 108

The Donnelly Act, which sets out OAG’s antitrust investigatory authority, includes the same language as the
Martin Act authorizing OAG to require the production of “a statement in writing . . . as to all the facts and
circumstances concerning the subject matter” and “such other data and information as he may deem relevant[.]”
This language first appeared in the Martin Act when it was enacted in 1921, and was added to the Donnelly Act in
1933 for the express purpose of enlarging OAG’s subpoena power to the extent provided for in the Martin Act. The
Martin Act is thus at least as broad as the Donnelly Act in this respect. See Public Papers of Governor Lehman,
Aug. 15, 1933, at 160-61 (¶ 136, Ex. 29) (including recommendation by Governor Lehman to the Legislature that
the Donnelly Act be amended “to enlarge the power of subpoena, examination and prosecution by the AttorneyGeneral in the same manner as now provided in the Martin Act,” to enable OAG “to conduct adequate investigations
to ascertain the underlying facts concerning violations of the Donnelly Act”); Annual Report of the AttorneyGeneral, 1934, at 51 (Id., Ex. 30) (noting that the Donnelly Act amendment of the prior year “was patterned after the
Martin Act”).
22

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Misc. 2d 329, 332 (Sup. Ct. N.Y. Cnty. 1981) (upholding the validity of OAG subpoena with
interrogatories, which are “a useful tool for gathering evidence against a corporate entity”).23
Exxon ignores this overwhelming authority and instead argues that it cannot be
compelled to create new documents to comply with the subpoena. However, all but two of the
cases it cites in support of this proposition (Exxon Br. at 18-19) pertain to civil discovery
obligations and do not involve investigative subpoenas from government agencies. In the
remaining two cases, the statute pursuant to which the subpoena was issued did not specifically
authorize interrogatories and requests for information at the time the subpoena was issued.24
4. OAG’s Subpoena Is Not Preempted By Federal Law
Contrary to Exxon’s contention, OAG’s subpoena is not preempted by federal law. Any
preemption analysis is “guided by the starting presumption that Congress does not intend to
supplant state law unless its intent to do so is clear and manifest.” People v. Applied Card Sys.,
Inc., 11 N.Y.3d 105, 113 (2008) (internal quotation marks omitted). This presumption is
particularly strong with respect to state blue-sky laws such as the Martin Act, because federal
securities laws “presuppose an important role for state Attorneys General in investigating fraud
and bringing civil actions to enjoin wrongful conduct, vindicate the rights of those injured
thereby, deter future fraud, and maintain the public trust.” People v. Greenberg, 946 N.Y.S.2d 1,
5 (1st Dep’t 2012).

See also All-Waste Sys., Inc. v. Abrams, 547 N.Y.S.2d 77, 78 (2d Dep’t 1989) (holding that OAG’s interrogatories
were valid under the Donnelly Act).
23

Liberty Mut. Ins. Co. v. N.Y. Comm’n on Human Rights, 332 N.Y.S.2d 971 (1st Dep’t 1972) (decision concerning
authority of City of New York Commission on Human Rights under former N.Y.C. Admin. Code § B1-5.0, see
¶ 137, Ex. 31); Application of Slipyan, 208 Misc. 515 (Sup. Ct. N.Y. Cnty. 1955) (decision concerning authority of
Commissioner of Investigation under former Executive Law § 11, see ¶ 138, Ex. 32).
24

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Any potential claims by OAG, including those related to asset impairment, do not come
close to conflicting with the federal regulations that Exxon cites, which concern the calculation
and disclosure of proved reserves under a formula specified by the SEC. As Exxon’s own
spokesperson highlighted in a recent earnings call, reserves reporting pursuant to SEC rules is
distinct from evaluation of assets for potential impairment.25 Notably, although SEC rules
require companies to report proved reserves in light of existing conditions (see 17 C.F.R.
§§ 210.4-10, 229.1202), estimates of future cash flows for purposes of impairment testing “shall
incorporate the entity’s own assumptions . . . and shall consider all available evidence.” ¶ 47,
Ex. 11 (Financial Accounting Standards Board, Accounting Standards Codification 360-10-3530).
Exxon represents to investors and to the public that it follows this rule of consistency in
evaluating whether its assets are impaired.26 But as set forth above, it appears that Exxon’s
impairment evaluations did not incorporate its publicly-touted assumptions about a proxy cost of
GHGs prior to 2016. Any claims stemming from Exxon’s inconsistency in this respect would
have little or nothing to do with SEC reserve reporting regulations, let alone conflict with such
regulations.27 Indeed, the subpoena duces tecum specifies that OAG is not requesting

See ¶ 139, Ex. 33 (Transcript of Earnings Call, Exxon Mobil Corp. Q4 2016 Results), at 23 (“I want to make sure
that everybody’s very clear that there is a separation between proved reserves reporting under the SEC rules and
then the whole issue of asset impairments.”) (remarks of Jeff Woodbury, Vice President of Investor Relations,
Exxon).
25

See, e.g., ¶ 44, Ex. 12 (Exxon Mobil Corp., Form 10-K, 2015), at 57 (“Cash flows used in recoverability
assessments are based on the Corporation’s assumptions which are developed in the annual planning and budgeting
process, and are consistent with the criteria management uses to evaluate investment opportunities.”).
26

27

Moreover, state and federal law on this point could not conflict even in theory, because the federal regulations that
Exxon cites make clear that companies may disclose estimates of oil and gas resources other than the reserves
calculations mandated by those regulations if such disclosure is required by state law. Instruction to 17 C.F.R.
§ 229.1202 (Item 1202).

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information about Exxon’s SEC reserves reporting process. (Anderson Aff. Ex. T at
Interrogatory Nos. 6 & 7).28
Furthermore, OAG has not filed a complaint; thus far, it has only issued subpoenas,
rendering Exxon’s preemption argument premature in any event. See Oncor Commc’ns v. State,
636 N.Y.S.2d 176, 178 (3d Dep’t 1996) (holding that, absent claims asserted in a complaint,
“there can be no meaningful consideration of the preemption issue”); Cuomo v. Dreamland
Amusements, Inc., No. 08 Civ. 7100 (JGK), 2008 WL 4369270, at *8 (S.D.N.Y. Sep. 22, 2008)
(holding that preemption issue could not be resolved because the potential claim that may have
been preempted was “only one of several bases” for OAG’s investigation); Cuomo v. Dreamland
Amusements, Inc., 22 Misc. 3d 1107(A), 2009 N.Y. Slip. Op. 50062(U), at *6-7 (Sup. Ct. N.Y.
Cnty. Jan. 6, 2009) (same).29
B. This Court Should Compel the Testimony of the Records Witnesses
There can be no question that OAG has the right to ensure that responsive documents are
preserved, collected, and produced in the course of the its investigation, and furthermore, to
investigate any failures in that process as well as obstruction or frustration of its investigation.30
Here, Exxon and its outside counsel have failed to observe basic requirements for the
preservation, collection, production, and recovery of electronically-stored information.

These requests concern Exxon’s internal reserves estimates, which are not based on the SEC formula, but rather
on Exxon’s own assumptions, and which feed into its impairment decisions.
28

29

The cases Exxon cites with respect to raising preemption as a defense to a subpoena (see Exxon Br. at 20-21) are
inapposite. Gobeille v. Liberty Mut. Ins. Co., 136 S. Ct. 936 (2016), did not involve investigatory subpoenas at all,
but rather concerned reporting requirements in addition to those specified by ERISA. In Cuomo v. Clearing House
Ass’n, L.L.C., 557 U.S. 519, 535-36 (2009), the Court addressed whether state authority to issue subpoenas was
preempted by federal law limiting visitorial powers over national banks. By contrast, Exxon does not assert a
general immunity from state subpoenas, but only that OAG’s potential claims may be preempted.
30
See Gen. Bus. Law § 352(4); see also People v. Forsyth, 109 Misc. 2d 234, 237 (Sup. Ct. N.Y. Cnty. 1981)
(upholding jury verdict that failing to obey a Martin Act subpoena violated § 352(4) because, inter alia, defense of
impossibility is not a reasonable cause for failure to obey a subpoena “[w]here the defendant is responsible for his
inability to comply”).

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¶¶ 57-106. These failures directly resulted in the destruction of months, and in many cases, more
than a year’s worth, of emails and other electronic documents belonging to key custodians
including the company’s top management and reserves analysts. ¶¶ 72-92. The testimony of
Ms. Feinstein and Ms. Hirshman has revealed that, despite being proffered by Exxon as
knowledgeable on these topics, they lack knowledge about many of the relevant details,
including, crucially, information about Exxon’s data-backup processes and its recovery efforts to
date. ¶¶ 101-06. Despite being proffered as a witness on the six topics in OAG’s subpoena, on
almost 200 occasions, Ms. Feinstein testified that she did not know the requested details, and
nothing in Ms. Hirshman’s testimony provides further elucidation on these points. ¶¶ 103, 106.
Thus, OAG subpoenaed the four Exxon witnesses identified by Ms. Feinstein as being
knowledgeable on such details. ¶ 117.
Unable to contest the relevance of the testimony of these witnesses, Exxon contends that
their testimony is cumulative, speculative, and unduly burdensome. None of these objections has
merit given that Ms. Feinstein did not know the answers to many of OAG’s questions, and
identified these four record custodians as likely to know the answers to such questions.
¶¶ 99-105. Moreover, any undue burden to Exxon is outweighed by OAG’s need for this
relevant information about the full scope of Exxon’s document destruction and ensuring the
recovery of the destroyed documents. Because OAG has established that (i) Ms. Feinstein was
unable to provide certain information; (ii) the four newly-noticed witnesses are likely to provide
the information that Ms. Feinstein was unable to provide; and (iii) the testimony of such
witnesses is relevant to the investigation, this Court should compel Exxon to produce these
witnesses for testimony.

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C. This Court Should Compel the Testimony of Jason Iwanika,
An Imperial Oil Limited Witness
Despite having produced over 670 documents from the custody of Jason Iwanika, an
employee of Exxon’s majority-owned subsidiary, Imperial, based in Canada, Exxon now refuses
to produce Mr. Iwanika for testimony in this investigation, contending for the first time that it
lacks control over its majority-owned subsidiary from which it has been producing documents
for months. ¶¶ 84, 120, 132-33. Mr. Iwanika’s testimony is highly relevant to OAG’s
investigation given that documents produced by Exxon indicate that he was directed by Exxon
not to apply a proxy cost to Exxon’s Canadian oil sands projects. ¶¶ 29-33.
Under New York law, a parent corporation can be required to produce documents or
testimony from subsidiaries. For example, in Grande Prairie Energy LLC v. Alstom Power, Inc.,
the court held that “a parent company . . . can be compelled to produce for deposition an
employee of its foreign subsidiary,” and required an American company to produce for
testimony an employee of a Swiss affiliate. 5 Misc. 3d 1002(A), 2004 N.Y. Slip Op. 51156(U),
at *3 (Sup. Ct. N.Y. Cnty. Oct. 4, 2004). Likewise, in Bank of Tokyo–Mitsubishi, New York
Branch v. Kvaerner, the court held that “if a [company] subject to the court’s in personam
jurisdiction controls a foreign corporate entity the [company], by virtue of its control, should be
obligated to produce any and all appropriate discovery under its aegis, including that under the
control of its subsidiary, wherever the subsidiary may be located.” 175 Misc. 2d 408, 411 (Sup.
Ct. N.Y. Cnty. 1998) (requiring defendant to produce documents in the possession of its whollyowned foreign subsidiary).31

31

This principle applies equally to a majority-owned subsidiary that is, for relevant purposes, under the control of
the parent corporation. See Standard Fruit & S.S. Co. v. Waterfront Comm’n of N.Y. Harbor, 43 N.Y.2d 11, 15
(1977) (“[s]o long as the person who participated in the questioned corporate activity is an officer or employee of
the corporation, or is under its control or direction, it is the corporation’s responsibility to produce that person
pursuant to a subpoena served upon the corporation” even if that person is located in a foreign jurisdiction).

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Having spent months producing Mr. Iwanika’s documents, Exxon now claims,
implausibly, that it has no control over Imperial or Mr. Iwanika. Exxon’s baseless assertion is
refuted by Exxon’s own documents, including those produced from Mr. Iwanika’s files. Exxon’s
Corporate Plan documents, in which the company sets out corporate-level assumptions for the
proxy cost of GHGs, include sub-sections for the Canadian provinces where Imperial operates.
¶¶ 33, 36. Numerous documents reflect that Mr. Iwanika sought direction and guidance from
Exxon employees concerning how to apply this portion of the Exxon Corporate Plan in the
course of his work. See, e.g., ¶ 26, Ex. 6; ¶¶ 29-33. In certain instances, those Exxon employees
advised Mr. Iwanika not to apply the proxy cost of GHGs that appears in the Corporate Plan, and
instead, to apply only the much lower actual cost of carbon under existing Alberta law. ¶ 33.
The documents produced by Exxon reveal that Mr. Iwanika pushed back and questioned those
instructions, expressing his belief that he was bound to follow Exxon’s Corporate Plan guidance.
Id. Nonetheless, it appears that Mr. Iwanika relented and complied with Exxon’s instructions to
deviate from the company’s internal policies. Id. These and other documents confirm that
Exxon controls Imperial32 and Mr. Iwanika with respect to matters at the core of OAG’s
investigation, and as such, Exxon cannot now refuse to produce Mr. Iwanika for testimony
simply because he is located outside New York.
Additionally, Mr. Iwanika appears on Exxon’s privilege logs, including for a
communication he sent that purportedly contained legal advice. ¶ 133. Other Imperial
employees appear on Exxon’s privilege logs as well. Id.33 Exxon’s apparent contention that Mr.
Besides this substantial document production, other indicia of Exxon’s control over Imperial include the
following: (i) Exxon produced documents from a second Imperial employee, Susan Swan, Oleske Aff. ¶ 133; (ii)
Exxon’s Law Department conducted custodial interviews of both Ms. Swan and Mr. Iwanika, id.; and (iii) at least 28
Imperial employees were placed on litigation hold by Exxon’s Law Department, id.
32

In addition to Iwanika, 27 other Imperial employees have been placed on preservation hold by Exxon’s Law
Department. ¶ 133.
33

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Iwanika’s presence on a document does not break privilege is an implicit acknowledgment that
he is under Exxon’s control. Grande Prairie Energy, 5 Misc. 3d 1002(A), 2004 N.Y. Slip Op.
51156(U), at *3 (holding that party “cannot have it both ways” in this respect).
Accordingly, this Court should compel Exxon to produce Mr. Iwanika for testimony in
response to OAG’s subpoena.

CONCLUSION
For the reasons set forth above, Exxon’s motion to quash should be denied in its entirety,
and OAG’s cross-motion to compel compliance with OAG’s subpoena duces tecum, its four
subpoenas for the testimony of record custodians, and its subpoena for the testimony of Mr.
Iwanika should be granted in its entirety.

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Dated:

RECEIVED NYSCEF: 06/02/2017

New York, New York
June 2, 2017

ERIC T. SCHNEIDERMAN
Attorney General of the State of New York

By: _________/s______________________
John Oleske
Senior Enforcement Counsel
Jonathan Zweig
Assistant Attorney General
Mandy DeRoche
Assistant Attorney General
Jordan Salberg
Assistant Attorney General
120 Broadway
New York, New York 10271
Tel.: 212-416-8660
Attorneys for Petitioner
People of the State of New York

Of Counsel:
MANISHA M. SHETH
Executive Deputy Attorney General, Economic Justice Division
KATHERINE C. MILGRAM
Bureau Chief, Investor Protection Bureau
LEMUEL SROLOVIC
Bureau Chief, Environmental Protection Bureau

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