Exxon Mobil v. Healey ( 2022 )

18-1170
Exxon Mobil v. Healey
United States Court of Appeals
For the Second Circuit
August Term 2019
Argued: February 18, 2020
Decided: March 15, 2022
No. 18-1170
EXXON MOBIL CORPORATION,
Plaintiff-Appellant,
v.
MAURA TRACY HEALEY, in her official capacity as ATTORNEY GENERAL OF
MASSACHUSETTS, and LETITIA JAMES, in her official capacity as ATTORNEY
GENERAL OF NEW YORK, *
Defendants-Appellees.
Appeal from the United States District Court
for the Southern District of New York
No. 17-cv-2301, Valerie Caproni, Judge.
Before: KEARSE, SULLIVAN, AND BIANCO, Circuit Judges.
*The Clerk of Court is respectfully directed to amend the caption as set forth above. Additionally,
pursuant to Rule 43(c)(2) of the Federal Rules of Appellate Procedure, Attorney General Letitia
James is automatically substituted as a Defendant-Appellee for the former Attorney General of
New York, Barbara D. Underwood.
Plaintiff-Appellant Exxon Mobil Corporation appeals the dismissal of its
complaint against the New York and Massachusetts Attorneys General, which
alleged that the states’ investigations into Exxon’s purportedly deceptive speech
regarding climate change were motivated by viewpoint discrimination and
violated Exxon’s constitutional rights. During the pendency of this appeal, the
New York Attorney General closed the New York investigation and commenced
an enforcement action, which resolved in Exxon’s favor and is not being appealed
by the state. Because these events have mooted Exxon’s claims against the New
York Attorney General, we lack jurisdiction over those claims. As to Exxon’s
claims against the Massachusetts Attorney General, Exxon could have pursued the
relief it now seeks in an earlier Massachusetts state court proceeding arising from
the same events that underlie the present suit; its claims against the Massachusetts
Attorney General are thus barred under the doctrine of res judicata.
We therefore dismiss the appeal as to the New York Attorney General and
affirm the district court’s judgment as to the Massachusetts Attorney General.
DISMISSED IN PART AND AFFIRMED IN PART.
JUSTIN ANDERSON, Paul, Weiss, Rifkind,
Wharton & Garrison LLP, Washington, District of
Columbia (Theodore V. Wells, Jr., Daniel J. Toal,
Paul, Weiss, Rifkind, Wharton & Garrison LLP,
New York, New York; Patrick J. Conlon, Daniel E.
Bolia, Exxon Mobil Corporation, Spring, Texas, on
the brief), for Plaintiff-Appellant Exxon Mobil
Corporation.
SETH SCHOFIELD, Assistant Attorney General
(Richard A. Johnston, Melissa A. Hoffer,
Christophe G. Courchesne, Amanda Morejon,
Assistant Attorneys General, on the brief), for
Maura T. Healey, Attorney General of the
Commonwealth of Massachusetts, Office of the
Attorney General of Massachusetts, Boston,
Massachusetts, for Defendant-Appellee Attorney
General of Massachusetts.
2
ANISHA S. DASGUPTA, Deputy Solicitor General
(Scott A. Eisman, Assistant Solicitor General, on the
brief), for Letitia James, Attorney General of the
State of New York, New York, New York, for
Defendant-Appellee Attorney General of New York.
Jeffrey C. Mateer, First Assistant Attorney
General, Brantley D. Starr, Deputy First Assistant
Attorney General, James E. Davis, Deputy
Attorney General for Civil Litigation, David J.
Hacker, Special Counsel for Civil Litigation, for
Ken Paxton, Attorney General of Texas, Austin,
Texas; Steve Marshall, Attorney General of
Alabama; Leslie Rutledge, Attorney General of
Arkansas; Christopher M. Carr, Attorney General
of Georgia; Jeff Landry, Attorney General of
Louisiana; Paul R. LePage, Governor of Maine;
Phil Bryant, Governor of Mississippi; Doug
Peterson, Attorney General of Nebraska; Mike
Hunter, Attorney General of Oklahoma; Alan
Wilson, Attorney General of South Carolina; Brad
Schimel, Attorney General of Wisconsin, for Amici
Curiae States of Alabama, Arkansas, Georgia,
Louisiana, Nebraska, Oklahoma, South Carolina,
Texas, and Wisconsin, and Phil Bryant, Governor
of Mississippi and Paul R. LePage, Governor of
Maine in support of Plaintiff-Appellant.
Megan L. Brown, Richard W. Smith, Wiley Rein
LLP, Washington, District of Columbia, for Amici
Curiae National Association of Manufacturers and
Chamber of Commerce of the United States of
America in support of Plaintiff-Appellant.
3
Shanna M. Cleveland, Ronald A. Fein, Lisa
Danetz, Free Speech for People, Newton,
Massachusetts, and Steven H. Shiffrin, Cornell
Law School, Ithaca, New York, for Amici Curiae
Michael C. Dorf, Robert S. Stevens Professor of
Law, Cornell Law School; Daniel J.H. Greenwood,
Professor of Law, Deane School of Law, Hofstra
University; Steven Heyman, Professor of Law,
Chicago-Kent College of Law; Robert Kerr, Edith
Kinney Gaylord Presidential Professor, Gaylord
College, University of Oklahoma; Douglas Kysar,
Deputy Dean and Joseph M. Field ’55 Professor of
Law, Yale Law School; Helen Norton, Professor
and Ira C. Rothgerber, Jr. Chair in Constitutional
Law, University of Colorado School of Law;
Tamara R. Piety, Professor of Law, University of
Tulsa, College of Law; Frank Pasquale, Professor
of Law, University of Maryland; Catherine J. Ross,
Fred C. Stevenson Research Professor, George
Washington University Law School; and Laurence
H. Tribe, Carl M. Loeb University Professor and
Professor of Constitutional Law, Harvard Law
School in support of Defendants-Appellees.
Edward Notis-McConarty, M. Patrick Moore, Jr.,
Vanessa A. Arslanian, Hemenway & Barnes LLP,
Boston, MA, for Amici Curiae Martha Coakley,
Thomas Reilly, Scott Harshbarger, James M.
Shannon, and Francis X. Bellotti, Former Attorneys
General of Massachusetts in support of Defendants-
Appellees.
Jillian A. Lazar, Director of Investor Protection,
Marion Quirk, Joseph E. Gibbs-Tabler, Deputy
Attorneys General, for Matthew P. Denn, Attorney
General of Delaware, Wilmington, Delaware;
4
Benjamin Gutman, Solicitor General, Adam
Holbrook, Assistant Attorney General, for Ellen F.
Rosenblum, Attorney General of Oregon, Salem,
Oregon; Xavier Becerra, Attorney General of
California, Sacramento, California; George Jepsen,
Attorney General of Connecticut, Hartford,
Connecticut; Russell A. Suzuki, Attorney General
of Hawaii, Honolulu, Hawaii; Lisa Madigan,
Attorney General of Illinois, Chicago, Illinois;
Thomas J. Miller, Attorney General of Iowa, Des
Moines, Iowa; Janet T. Mills, Attorney General of
Maine, Augusta, Maine; Brian E. Frosh, Attorney
General of Maryland, Baltimore, Maryland; Lori
Swanson, Attorney General of Minnesota, St. Paul,
Minnesota; Jim Hood, Attorney General of
Mississippi, Jackson, Mississippi; Gurbir S.
Grewal, Attorney General of New Jersey, Trenton,
New Jersey; Hector Balderas, Attorney General of
New Mexico, Santa Fe, New Mexico; Joshua H.
Stein, Attorney General of North Carolina,
Raleigh, North Carolina; Josh Shapiro, Attorney
General of Pennsylvania, Harrisburg,
Pennsylvania; Peter F. Kilmartin, Attorney
General of Rhode Island, Providence, Rhode
Island; Thomas J. Donovan, Jr., Attorney General
of Vermont, Montpelier, Vermont; Mark R.
Herring, Attorney General of Virginia, Richmond,
Virginia; Robert W. Ferguson, Attorney General of
Washington, Olympia, Washington; Karl A.
Racine, Attorney General for the District of
Columbia, Washington, District of Columbia, for
Amici Curiae States of California, Connecticut,
Delaware, Hawaii, Illinois, Iowa, Maine,
Maryland, Minnesota, Mississippi, New Jersey,
New Mexico, North Carolina, Oregon,
Pennsylvania, Rhode Island, Vermont, Virginia,
5
Washington, and the District of Columbia in
support of Defendants-Appellees.
RICHARD J. SULLIVAN, Circuit Judge:
Plaintiff-Appellant Exxon Mobil Corporation (“Exxon”) appeals from a
judgment of the United States District Court for the Southern District of New York
(Caproni, J.), dismissing its complaint against Defendants-Appellees Maura
Healey, in her official capacity as Attorney General of Massachusetts, and Letitia
James, in her official capacity as Attorney General of New York, and denying leave
to amend the complaint as futile. The case, which developed a complex
procedural background before reaching the Southern District of New York, first
originated in 2016 when Exxon sued the attorneys general of New York and
Massachusetts (the “states”) under 18 U.S.C. §§ 1983 and 1985 – and their state-
law analogs – principally seeking an order barring those states from investigating
whether Exxon misled investors and the public regarding the company’s
knowledge about climate change. Among other things, Exxon alleged that the
states’ investigations into Exxon’s purportedly deceptive speech concerning
climate change were motivated by viewpoint discrimination and violated Exxon’s
constitutional rights.
6
In 2018, the district court dismissed Exxon’s claims against the
Massachusetts Attorney General, finding that the lawsuit was precluded by res
judicata because Exxon had litigated or could have litigated the present claims in
an earlier state proceeding. It dismissed Exxon’s claims against the New York
Attorney General for failure to state a claim and denied as futile Exxon’s motion
for leave to file a second amended complaint.
On appeal, Exxon challenges both grounds for dismissal and the denial of
leave to amend, contending that it stated plausible constitutional claims which
were not barred by res judicata as to the Massachusetts Attorney General. Exxon
also more specifically argues that the district court failed to address Exxon’s
viewpoint discrimination claim, improperly analyzed Exxon’s allegations and
demanded evidence, and drew inferences in favor of the Attorneys General.
During the pendency of the appeal, the New York Attorney General concluded
the New York investigation after commencing an enforcement action, which
eventually resulted in a judgment in Exxon’s favor. We therefore grant the New
York Attorney General’s motion to dismiss the appeal on the ground that Exxon’s
claims against her are moot. We also affirm the district court’s determination that
7
Exxon’s claims against the Massachusetts Attorney General are precluded by the
doctrine of res judicata.
I. BACKGROUND
A. State Court Investigations
In 2015 and 2016, respectively, the Attorneys General of New York and
Massachusetts commenced investigations into “whether ExxonMobil committed
consumer or securities fraud by misrepresenting its knowledge of climate
change.” J. App’x at 396. In November 2015, the New York Attorney General
(then-Attorney General Eric Schneiderman) served Exxon with a subpoena
seeking documents and communications related to its research on climate change.
In April 2016, the Massachusetts Attorney General served a Civil Investigative
Demand (the “CID”) to investigate potential violations of Section 2 of
Massachusetts General Laws chapter 93A, which prohibits “unfair or deceptive
acts or practices” in “trade or commerce.” J. App’x at 1026. The CID focused on
the marketing and sale of fossil fuel products to Massachusetts consumers, and on
the marketing and sale of Exxon securities to investors.
The New York Attorney General sought additional documents related to the
ongoing investigation in the fall of 2016. Although Exxon initially produced
8
documents in response to both New York subpoenas, the New York Attorney
General moved to compel further compliance with the 2015 subpoena in
November 2016. Shortly thereafter, Justice Barry R. Ostrager, who oversaw that
proceeding, set a deadline for Exxon to complete production. Exxon subsequently
certified compliance with the November 2015 subpoena.
B. Exxon’s Federal Action in the Northern District of Texas
On June 15, 2016, Exxon filed a complaint against Massachusetts Attorney
General Healey in the United States District Court for the Northern District of
Texas (Kinkeade, J.) seeking declaratory and injunctive relief under Texas and
federal law. Among other things, Exxon sought to enjoin the CID, alleging that
the Massachusetts investigation was pretextual and violated the dormant
Commerce Clause and Exxon’s rights under the First Amendment, its right to be
free of unreasonable searches under the Fourth Amendment, and its due process
rights under the Fourteenth Amendment. Exxon moved for a preliminary
injunction, while Attorney General Healey cross-moved to dismiss. The district
court sua sponte ordered certain jurisdictional discovery relevant to Attorney
General Healey’s motion to dismiss.
Exxon filed an amended complaint on November 10, 2016, adding then-
9
Attorney General Schneiderman as a defendant and including allegations
pertaining to the New York investigation. In addition to asserting various
constitutional claims, Exxon also alleged that the two Attorneys General conspired
to silence and intimidate one side of the climate policy debate through pretextual
investigations. In support of its claims that the Attorneys General were biased and
conducted investigations with improper political motives, Exxon pointed to,
among other things, public comments made by both Attorneys General at an “AGs
United for Clean Power” conference. Exxon also alleged that the two offices
received private presentations from climate activists and lawyers, who enlisted the
public officials to utilize state investigative authority to bring fossil fuel
companies’ internal corporate documents to light. The Attorneys General
eventually moved to dismiss Exxon’s amended complaint.
In December 2016, the Northern District of Texas court stayed its prior
jurisdictional discovery order, and, following the Fifth Circuit’s denial of the
Massachusetts Attorney General’s petition for a writ of mandamus, ordered
briefing on its ability to exercise personal jurisdiction over the Attorneys General.
C. Exxon’s Petition in Massachusetts State Court
On June 16, 2016, one day after Exxon filed its original complaint against the
10
Massachusetts Attorney General in Texas, Exxon separately petitioned a
Massachusetts Superior Court to set aside the CID and disqualify Attorney
General Healey. In that petition, Exxon contended – among other things – that the
CID violated state constitutional protections for free speech and freedom from
unreasonable searches, and that the CID was arbitrary and capricious.
Acknowledging that its petition raised issues that potentially overlapped
with those in its federal suit, Exxon requested that the Massachusetts Superior
Court grant a stay pending the outcome of the federal litigation in Texas. The
Massachusetts Attorney General cross-moved to compel Exxon to comply with the
CID.
On January 11, 2017, the Massachusetts Superior Court denied Exxon’s
petition to set aside the CID and granted the Massachusetts Attorney General’s
motion to compel. The Superior Court rejected Exxon’s assertion that the Attorney
General’s actions constituted political bias or viewpoint discrimination rising to
the level of arbitrary and capricious conduct, determining instead that the
Attorney General had “assayed sufficient grounds – her concerns about Exxon’s
possible misrepresentations to Massachusetts consumers – upon which to issue
the CID” and thus acted in good faith. J. App’x at 1017; see id. at 1016. But the
11
court declined to consider Exxon’s free speech claim at that time, reasoning that
the Attorney General was still investigating whether Exxon’s statements or
omissions in communications to consumers were misleading or deceptive, and
that misleading or deceptive speech would not be “entitled to any free speech
protection.” Id. at 1017 n.2. The court also denied Exxon’s motion to disqualify
Attorney General Healey, finding that her comments about the investigation at the
“AGs United for Clean Power” conference did not reveal bias.
On February 8, 2017, Exxon appealed the Superior Court’s order. In April
2018, the Supreme Judicial Court of Massachusetts (“SJC”) affirmed the Superior
Court’s decision. On January 7, 2019, the United States Supreme Court denied
Exxon’s petition for a writ of certiorari to review the SJC’s decision.
D. Transfer of the Federal Action to the Southern District of New York
On March 29, 2017, while the Massachusetts action was pending, Judge
Kinkeade sua sponte transferred the federal case from the Northern District of
Texas to “the proper venue” – the Southern District of New York – where it was
assigned to Judge Caproni. J. App’x at 988–1001. After receiving additional
briefing on the Attorneys General’s motions to dismiss and Exxon’s cross-motion
to amend its complaint, the district court (Caproni, J.) issued an order on March
12
29, 2018, dismissing the amended complaint with prejudice and denying Exxon’s
request for leave to amend as futile. Although the court found that Exxon’s claim
was ripe and that it had personal jurisdiction over the Massachusetts Attorney
General, it held that Exxon’s claims against the Massachusetts Attorney General
were barred by res judicata – also known as claim preclusion – since Exxon could
have raised those claims in the Massachusetts proceeding. As to Exxon’s
remaining causes of action against the New York Attorney General, the court
dismissed those claims pursuant to Federal Rule of Civil Procedure 12(b)(6),
concluding that Exxon had failed to plead an improper motive – a prerequisite for
each of Exxon’s constitutional claims.
E. Appeal of District Court’s Dismissal
Exxon timely appealed, challenging both the dismissal of its claims and the
denial of its motion to amend. Exxon asserts that it stated plausible constitutional
claims that were not barred by res judicata, and that the district court failed to
address Exxon’s viewpoint discrimination claim, incorrectly analyzed Exxon’s
allegations, wrongly demanded evidence at the pleading stage, and improperly
drew inferences in favor of the Attorneys General.
After the merits briefing on appeal concluded, the New York Attorney
13
General closed the New York investigation and brought an enforcement action
against Exxon in state court alleging “that Exxon engaged in a scheme to deceive
investors and the investment community about the risks posed to its business by
climate change regulation,” in violation of New York law. See Dkt. 190 (“MTD”)
at 5 (internal quotation marks omitted).
The New York Attorney General then moved in this Court to dismiss the
appeal as moot, arguing that because the Attorney General had ended the
investigation on which Exxon’s claims are based, there was no longer a live
controversy capable of redress. Exxon opposed the motion on several grounds,
including its contention that a live controversy still existed because the relief
sought in the federal action would prevent the New York Attorney General from
using wrongfully obtained documents in the state enforcement action. Exxon also
contended that the New York Attorney General’s termination of the investigation
fell under mootness exceptions for voluntary cessation of challenged conduct and
conduct capable of repetition but evading review. The New York Attorney
General’s motion was referred to this panel to be considered with Exxon’s appeal
from the district court’s ruling.
After the parties completed briefing on the motion to dismiss in this Court,
14
the state enforcement action proceeded to trial in the Commercial Division of the
New York State Supreme Court. On December 10, 2019, after a twelve-day trial,
Justice Ostrager issued a thirty-one-page decision in Exxon’s favor. See People v.
Exxon Mobil Corp., 119 N.Y.S.3d 829, 2019 WL 6795771 (N.Y. Sup. Ct. Dec. 10, 2019).
Among other things, Justice Ostrager concluded that, after an extensive three-and-
a-half-year investigation and pre-trial discovery period during which Exxon
produced “millions of pages of documents and dozens of witnesses for interviews
and depositions,” id. at *1, the New York Attorney General “failed to prove [at
trial], by a preponderance of the evidence, that ExxonMobil made any material
misstatements or omissions about its practices and procedures that misled any
reasonable investor,” id. at *30. Justice Ostrager further emphasized that the New
York Attorney General had not produced “testimony . . . from any investor who
claimed to have been misled by any [of Exxon’s] disclosure[s], even though the
Office . . . had previously represented it would call such individuals as trial
witnesses.” Id. On January 24, 2020, the New York Attorney General represented
she would not appeal Justice Ostrager’s ruling, and the time in which to do so has
since expired.
On October 24, 2019 – while this appeal was pending and the New York trial
15
was in its third day of testimony – the Massachusetts Attorney General filed a civil
complaint against Exxon under the Consumer Protection Act. That action, which
was removed to federal court and has since been remanded to state court, is still
ongoing. See Commonwealth v. Exxon Mobil Corp., No. 1984CV03333BLS1, 2021 WL
3493456, at *1 (Mass. Super. Ct. June 22, 2021) (denying Exxon’s motion to dismiss).
II. DISCUSSION
On appeal, Exxon challenges the district court’s dismissal on all grounds.
Although both Attorneys General contend that the district court properly
dismissed Exxon’s complaint for failure to state a claim, the New York Attorney
General raises a threshold question of mootness, arguing that there is no live
controversy because the New York investigation and related trial have concluded.
For her part, the Massachusetts Attorney General maintains that Exxon’s claims
are precluded under the doctrine of res judicata, as those claims could have been
raised in the Massachusetts Superior Court action. We are persuaded that the
appeal as to the New York Attorney General is moot and that res judicata bars
Exxon’s claims against the Massachusetts Attorney General, and therefore affirm
in part and dismiss in part on those grounds.
16
A. The Appeal Is Moot as to the New York Attorney General.
Because our jurisdiction is constitutionally limited to “actual, ongoing cases
or controversies,” a party must at all stages have “an actual injury . . . likely to be
redressed by a favorable judicial decision.” Lewis v. Cont’l Bank Corp., 494 U.S. 472,
477 (1990); see also Mangouras v. Squire Patton Boggs, 980 F.3d 88, 96 (2d Cir. 2020).
The parties must retain a continued “personal stake in the outcome,” even on
appeal, leaving us to resolve only “real and substantial controversies admitting of
specific relief” rather than issue decisions “advising what the law would be upon
a hypothetical state of facts.” Lewis, 494 U.S. at 477–78 (brackets and internal
quotation marks omitted). “A moot action therefore must be dismissed, even if
the case was live at the outset but later events rendered it moot on appeal.” N.Y.C.
Emps.’ Ret. Sys. v. Dole Food Co., 969 F.2d 1430, 1433 (2d Cir. 1992); see also Haley v.
Pataki, 60 F.3d 137, 141 (2d Cir. 1995) (“[I]t is axiomatic that there must be a
continuing controversy capable of redress by this Court.”).
A live controversy remains as long as “a court can fashion some form of
meaningful relief” to award the complaining party, and even “[t]he availability of
[a] possible remedy is sufficient to prevent [a] case from being moot.” Church of
Scientology v. United States, 506 U.S. 9, 12–13 (1992) (second emphasis added). This
17
inquiry is more complicated in cases involving states or state agents as
defendants – like this one – since the Eleventh Amendment bars the award of
money damages against state officials in their official capacities. See Pennhurst
State Sch. & Hosp. v. Halderman, 465 U.S. 89, 100–03 (1984). The Supreme Court has
made clear that, pursuant to the doctrine first articulated in Ex parte Young, 209
U.S. 123 (1908), a plaintiff may bring claims against a state official acting in her
official capacity only if he alleges an “ongoing violation of federal law and seeks
[injunctive] relief properly characterized as prospective.” Verizon Md. Inc. v. Pub.
Serv. Comm'n of Md., 535 U.S. 635, 645 (2002) (internal quotation marks omitted);
see Ford v. Reynolds, 316 F.3d 351, 355 (2d Cir. 2003). Accordingly, for this case to
remain live, there must be a possible effectual remedy for the violations it alleges,
and the remedy must be prospective relief that would address an ongoing
violation of federal law.
With respect to its claims against the New York Attorney General, Exxon
commenced the federal action principally to enjoin an investigation that has now
concluded. Additionally, the enforcement action that the New York Attorney
General brought based on that investigation has been resolved in Exxon’s favor.
In light of these developments, Exxon cannot now obtain the prospective relief it
18
requested in its operative complaint (to enjoin enforcement of the New York
Attorney General’s November 2015 subpoena) or in its proposed amended
complaint (to enjoin the New York Attorney General’s investigation generally).
Put simply, the Court cannot enjoin what no longer exists. See Browning Debenture
Holders' Comm. v. DASA Corp., 524 F.2d 811, 814 (2d Cir. 1975) (“[I]t is . . .
impossible to enjoin the meeting already held.”); see also Ne. Fla. Chapter of
Associated Gen. Contractors of Am. v. City of Jacksonville, 508 U.S. 656, 670 (1993)
(O’Connor, J., dissenting) (explaining that “challenges to legislation that . . . has
been repealed, where the plaintiff has sought only prospective relief,” are moot
because “[i]f the challenged statute no longer exists . . . an order enjoining its
enforcement would be meaningless”). The question before us, then, is whether
under these circumstances Exxon retains “some interest” in the case it brought, “so
that a decision in its favor will inure to its benefit.” New England Health Care Emps.
Union, Dist. 1199, SEIU AFL–CIO v. Mount Sinai Hosp., 65 F.3d 1024, 1029 (2d Cir.
1995).
Although Exxon concedes that the New York investigation and subsequent
enforcement action have concluded, it nevertheless insists that there are additional
injunctive remedies that would constitute prospective relief for the alleged
19
violations. These include (1) the return or destruction of documents that Exxon
produced during the course of the investigation, (2) the issuance of an affirmative
injunction directing the New York Attorney General to curtail the policies that led
to the issuance of the offensive subpoenas in the first place, and (3) declaratory
relief stating “that the [New York Attorney General’s] investigation of ExxonMobil
violated its constitutional rights.” Dkt. 203 (“Exxon MTD Opp’n”) at 17–19.
To be sure, the conclusion of an investigation will not ordinarily moot a
challenge to a subpoena if a court can order “meaningful relief” by, for example,
“ordering the . . . return [of] records” provided during the investigation. Church
of Scientology, 506 U.S. at 12–13 (contemplating the return of documents as
meaningful relief in a case involving the possession of specific materials sought by
subpoena). We have also recognized that subpoena compliance does not
necessarily moot an appeal of an order enforcing a subpoena, since respondents
maintain a privacy interest in the documents they have produced and would be
entitled to their return if successful. See Washington Nat’l Ins. Co. v. OBEX Grp.
LLC, 958 F.3d 126, 133 (2d Cir. 2020); accord Life Receivables Tr. v. Syndicate 102 at
Lloyd’s of London, 549 F.3d 210, 214 n.4 (2d Cir. 2008) (acknowledging that a privacy
interest in discovered documents remains even after compliance with a subpoena);
20
United States v. Constr. Prods. Rsch., Inc., 73 F.3d 464, 469 (2d Cir. 1996) (noting in
dicta that respondents to a subpoena had a privacy interest in the return of
surrendered documents and that the case was not moot because respondents still
contested the government actor’s authority to have issued the subpoena). But this
precedent is of no moment here, since the record reflects that Exxon stipulated to
a process by which the New York Attorney General would destroy or return
confidential documents that Exxon produced in the investigation and enforcement
action. See MTD, Mot. App’x at 150–61 (“Stipulation”).
Under the terms of the Stipulation, which was executed by the parties and
ordered by the judge in the New York enforcement proceeding, Exxon agreed to a
process by which it could designate materials as confidential, in which case the
documents – including “all reproductions thereof” – would be returned or
destroyed at the conclusion of the action. See id. at 159. While the Stipulation also
permitted opposing counsel to retain certain materials such as work product,
Exxon agreed to that carve-out and has not suggested that it did not voluntarily
enter the Stipulation. Similarly, although the Stipulation is “without prejudice to
the rights of” either party “to move for relief from any of its provisions, or to seek
or agree to different or additional protection for any particular material or
21
information,” id. at 160, the mere possibility that a party may seek some
undisclosed form of additional relief – the likelihood of which has not been
shown – does not change the fact that Exxon has already obtained by stipulation a
binding commitment from the New York Attorney General to provide the very
relief that Exxon now claims to seek. As we have previously recognized,
assurances made in stipulations that agree to provide the relief sought leaves this
Court without a role with respect to such relief, particularly where there is “no
indication that [the] understanding [between the parties] has . . . been breached.”
Sanders v. Wyman, 464 F.2d 488, 490–91 (2d Cir. 1972) (dismissing appeal as moot
where the defendants signed a stipulation and order prohibiting them from
disclosing confidential information and social service records of welfare recipients
to a housing authority without the recipients’ permission, and plaintiffs did not
show future risk of the same harm or that defendants had threatened
noncompliance with the stipulation and order); cf. Hewitt v. Helms, 482 U.S. 755,
761 (1987) (“The real value of the judicial pronouncement — what makes it a
proper judicial resolution of a ‘case or controversy’ rather than an advisory
opinion — is in the settling of some dispute which affects the behavior of the defendant
towards the plaintiff.” (emphasis in original)). The Stipulation therefore provides
22
the very relief that Exxon purports to seek from the Court, eliminating any
possibility that this Court could fashion prospective relief to address an ongoing
violation of federal law. 1
As to Exxon’s belated proposals of alternative forms of injunctive relief, we
easily reject them as speculative and not sufficiently tied to an ongoing injury. For
example, Exxon does not even attempt to explain how the imposition of a monitor
“to ensure that continued viewpoint bias does not influence [the New York
Attorney General’s] decision to use official power against ExxonMobil” would
cure an ongoing violation. Exxon MTD Opp’n at 19. Exxon has not alleged any
facts to suggest continuing harms from the now-ceased investigation and resolved
enforcement action, and the alternative relief that it seeks could only address
entirely hypothetical future harms; therefore, we conclude that Exxon’s new
arguments for alternative equitable remedies cannot overcome the obvious
mootness of Exxon’s claims.
1During oral argument, Exxon asserted that the New York Attorney General has not yet returned
or destroyed Exxon’s documents as required under the stipulation. Oral Argument at 1:09–4:33
(Feb. 18, 2020). In response, the New York Attorney General represented to the Court that she
had not done so because the Attorney General was subject to a litigation hold pursuant to the
Stipulation. Id. at 16:40–17:11; Stipulation at 160. Given that the parties voluntarily entered into
a stipulation that includes a process overseen by Justice Ostrager to adjudicate the return or
destruction of documents, the fact that this process was apparently not complete at the time of
argument will not alter our conclusion.
23
Nor does Exxon’s request for a declaratory judgment constitute a claim for
prospective relief for an ongoing constitutional violation. In Green v. Mansour, the
Supreme Court made clear that a request for a declaratory judgment as to a past
violation cannot itself establish a case or controversy to avoid mootness. 474 U.S.
64, 73–74 (1985); see also McGinty v. New York, 251 F.3d 84, 101 (2d Cir. 2001). Again,
because the Attorney General’s investigation is over, any declaratory judgment
opining on the legality of that investigation would be “entirely retrospective
because the state [is] no longer [allegedly] violating federal law.” Ward v. Thomas,
207 F.3d 114, 119 (2d Cir. 2000); see id. at 120 (“Any declaration could say no more
than that Connecticut had violated federal law in the past . . . [and] would have
much the same effect as a full-fledged award of damages or restitution by the
federal court, the latter kinds of relief being of course prohibited by the Eleventh
Amendment.” (internal quotation marks omitted)). 2
Exxon nevertheless contends that its complaint is not moot because the New
York Attorney General’s termination of the New York investigation falls within
one of the exceptions to the mootness doctrine – as either a voluntary cessation of
2Exxon’s claimed need for a declaratory injunction is particularly curious given Justice Ostrager’s
written opinion in the enforcement action. As discussed above, Justice Ostrager issued a final
order in favor of Exxon, definitively rejecting the New York Attorney General’s enforcement
action against Exxon. See Exxon Mobil Corp., 119 N.Y.S.3d 829, 2019 WL 6795771, at *30.
24
allegedly unlawful activity that may be freely resumed or as conduct that is
“capable of repetition while evading judicial review.” Exxon MTD Opp’n at 6. We
disagree.
Generally, the “voluntary cessation of allegedly illegal conduct” is not
enough to render a case moot. United States v. W. T. Grant Co., 345 U.S. 629, 632
(1953). Otherwise, a defendant might “strategically alter its conduct in order to
prevent or undo a ruling adverse to its interest.” E.I. Dupont de Nemours & Co. v.
Invista B.V., 473 F.3d 44, 47 (2d Cir. 2006). Nevertheless, a case involving such
voluntary cessation may be moot where “there is no reasonable expectation” of
the alleged violation’s recurrence, and interim events have “completely and
irrevocably eradicated the effects of the alleged violation.” County of Los Angeles
v. Davis, 440 U.S. 625, 631 (1979) (internal quotation marks omitted).
Exxon initially argued that the voluntary cessation exception applied
because the New York Attorney General made the decision to terminate the
investigation while continuing to reserve a right to seek discovery, and to utilize
the previously produced documents, in the civil enforcement action. In the
interim, of course, the enforcement action itself has concluded in Exxon’s favor,
and both parties have stipulated to the return or destruction of all documents
25
produced by Exxon during the investigation. Under these circumstances, interim
events have “completely and irrevocably eradicated the effects of the [New York
Attorney General’s] alleged violation,” id., and it cannot be seriously argued that
there is a reasonable expectation of the alleged violation’s recurrence.
Nor can Exxon succeed in arguing that the conduct is “capable of repetition,
yet evading review.” Irish Lesbian & Gay Org. v. Giuliani, 143 F.3d 638, 647 (2d Cir.
1998). For this exception to apply, (1) the plaintiff must have a “reasonable
expectation” that it will be subject to the same challenged action again, and (2) the
challenged conduct must be of “too short [a duration] to be fully litigated” before
its cessation. Id. at 647–48. “This facet of the mootness doctrine . . . is applicable
only in exceptional situations.” Dennin v. Conn. Interscholastic Athletic Conf., Inc.,
94 F.3d 96, 101 (2d Cir. 1996) (internal quotation marks omitted).
Exxon has failed to establish a reasonable expectation that the conduct at
issue in the present suit will recur, principally because the New York Attorney
General’s investigation and lawsuit have concluded; indeed, the state action was
resolved in Exxon’s favor, and the New York Attorney General did not appeal.
There is simply no rational basis to assume that the New York Attorney General
is poised to pursue a subsequent fraud investigation involving the same alleged
26
misconduct. Dennin, 94 F.3d at 100–01 (observing that “mere speculation that the
parties will be involved in a dispute over the same issue does not rise to the level
of a ‘reasonable expectation’ or ‘demonstrated probability’ of recurrence” (internal
quotation marks omitted)); Haley, 60 F.3d at 141 (stating that “the mere ‘theoretical
possibility’ that this scenario will arise again is not sufficient for the capable-of-
repetition exception to apply”); Knaust v. City of Kingston, 157 F.3d 86, 88 (2d Cir.
1998) (explaining that it will not “suffice to hypothesize the possibility that at some
future time, under circumstances that could only be guessed at now, the parties
could theoretically become embroiled in a like controversy once again”).
Exxon’s insistence that the New York Attorney General “continues to
defend the legality” of the office’s conduct does not alter our analysis. Exxon MTD
Opp’n at 9 (internal quotation marks omitted). Among other things, Exxon
contends that a press release issued by the New York Attorney General following
the New York court ruling contains politically motivated statements and
demonstrates that the Attorney General “continues to defend the legality and
propriety of its unconstitutional efforts to restrict speech, and . . . promises more
of the same.” Dkt. 286 at 2. But the broad statement in the press release –
proclaiming that the Attorney General “will continue to fight to ensure companies
27
are held responsible for actions that undermine and jeopardize the financial health
and safety of Americans across our country[] and . . . to end climate change,” id. at
61 – is too generic to create a reasonable expectation that another allegedly
pretextual investigation will recur. That is particularly true in light of the New
York Attorney General’s decision not to appeal the state court decision, leaving as
final and conclusive the state court’s ruling that the evidence developed as a result
of the New York Attorney General’s investigation was insufficient to subject
Exxon to state fraud liability. See Haley, 60 F.3d at 141 (rejecting as “entirely
speculative” the prospect that “a battle over the budget will occur next year” yet
evade review due to its transitory nature where that prospect was based on an
assumption that “the same principals will be involved in [the] next year’s budget
process” (internal quotation marks omitted)).
Nor can it be said that the New York Attorney General’s conduct was too
short-lived to be fully litigated before it ceased. To the contrary, Exxon’s
complaints about that conduct were fully litigated in the state court, which granted
a resounding victory for Exxon in a final judgment that the New York Attorney
28
General chose not to appeal, making further litigation of the federal issues wholly
unnecessary.
Finally, Exxon argues that even if this appeal is moot, the Court should
remand with instructions to the district court to vacate its dismissal of Exxon’s
complaint to avoid “giving preclusive effect to a judgment never reviewed by an
appellate court.” Exxon MTD Opp’n at 22 (internal quotation marks omitted)
(quoting Dole Food, 969 F.2d at 1435). As the Supreme Court stated in United
States v. Munsingwear, Inc., we ordinarily vacate the ruling that was the subject of
the appeal if mootness occurs through the unilateral action of the party prevailing
below – in this case, the New York Attorney General – or through circumstances
unattributable to either party. 340 U.S. 36, 39–41 (1950); but see U.S. Bancorp Mortg.
Co. v. Bonner Mall P’ship, 513 U.S. 18, 23, 25, 29 (1994) (noting that Munsingwear’s
description of the “‘established practice’ for vacatur was dictum” and holding that
it is generally inapplicable in the context of settlement). We need not vacate,
however, where “the party seeking relief from the judgment below caused the
mootness by voluntary action.” Doe v. Gonzales, 449 F.3d 415, 420 (2d Cir. 2006)
(internal quotation marks omitted); see U.S. Bancorp Mortg. Co., 513 U.S. at 26, 29(holding that, barring exceptional circumstances, “mootness by reason of
29
settlement does not justify vacatur of a judgment under review” because “[i]t is
[the] petitioner’s burden, as the party seeking relief from the status quo of the
appellate judgment, to demonstrate not merely equivalent responsibility for the
mootness, but equitable entitlement to the extraordinary remedy of vacatur”).
Here, Exxon’s appeal was rendered moot by Exxon’s insistence in
proceeding to trial in the New York enforcement action, the Attorney General’s
decision not to appeal Justice Ostrager’s ruling in favor of Exxon, and the parties’
mutual agreement and stipulation to the process for the return or destruction of
documents produced by Exxon prior to trial. In situations where “mootness is
neither happenstance, nor attributable to one party but not the other,” courts are
directed to exercise discretion in determining whether to vacate. Mfrs. Hanover Tr.
Co. v. Yanakas, 11 F.3d 381, 383–84 (2d Cir. 1993) (internal citations omitted). In
doing so, we “look at the equities of the individual case,” Hassoun v. Searls, 976
F.3d 121, 130 (2d Cir. 2020) (internal quotation marks omitted), and require that
the party seeking vacatur meet its burden of demonstrating entitlement to vacatur,
see U.S. Bancorp Mortg. Co., 513 U.S. at 26.
The equities do not favor vacatur in this case. While the New York Attorney
General ultimately had final control over whether to cease the New York
30
investigation, both parties knowingly pursued the trial of the enforcement action
with vigor. Indeed, while this appeal was pending, “Exxon stopped agreeing to
toll the limitations period for [the New York Attorney General] to bring an
enforcement action,” compelling her to commence the action before Justice
Ostrager in the Commercial Division. Dkt. 207 (“MTD Reply”) at 14. Throughout
that action, Exxon pressed “to try the case in 2019” and was “delighted that [the
court was] going to move the case.” MTD, Mot. App’x at 107. Indeed, Exxon
“promise[d]” the state court that the parties would “come back with an expedited
trial schedule.” Id. Given these facts, we conclude that the New York Attorney
General was not solely responsible in mooting the appeal.
To be clear, Exxon’s actions in nudging this case toward potential mootness
were by no means improper, and we do not suggest that Exxon engaged in any
sort of gamesmanship – only that the likely consequences of its litigation strategy,
including the mootness of this appeal, were obvious. In essence, Exxon pursued a
two-front campaign in which a victory in either court would achieve its objectives.
Having framed its federal complaint around the harms allegedly caused by
the New York Attorney General’s investigation, Exxon should have understood
that its voluntary actions in state court – which, again, facilitated the end of the
31
complained-of investigation and opened to Exxon the now-realized possibility of
prevailing on the enforcement action – risked mooting this appeal. See U.S.
Bancorp Mortg. Co., 513 U.S. at 29 (declining to grant vacatur where party seeking
relief from adverse decision participated in actions that mooted dispute on
appeal); Russman v. Bd. of Educ. of Enlarged City Sch. Dist. of Watervliet, 260 F.3d 114,
121–23 (2d Cir. 2001) (noting that an appellant’s conduct can “constitute
‘forfeiture’ of the benefit of vacatur” where it “knew or should have known that
his conduct was substantially likely to moot the appeal”); see also In re W. Pac.
Airlines, Inc., 181 F.3d 1191, 1194, 1197–98 (10th Cir. 1999) (declining to vacate
orders at issue in the appeal in part because appellants “contribut[ed] to the
mootness of th[e] appeal by failing to seek a stay” pending review of bankruptcy
court order).
Under these circumstances, and bearing in mind that “[j]udicial precedents
are presumptively correct[,] . . . valuable to the legal community as a whole,” and
“should stand unless a court concludes that the public interest would be served by
a vacatur,” U.S. Bancorp Mortg. Co., 513 U.S. at 26, we are not persuaded that Exxon
has carried its burden to show that it is equitably entitled to the “extraordinary
32
remedy of vacatur,” id.; see also Doe, 449 F.3d at 420–21. We therefore dismiss the
appeal as to the New York Attorney General.
B. Exxon’s Claims Against the Massachusetts Attorney General Are
Precluded.
With respect to its claims against the Massachusetts Attorney General,
Exxon argues that “[r]es judicata does not apply . . . because the claims asserted in
[the federal] action were not raised in or decided by the Massachusetts state court.”
Exxon Br. at 54. During oral argument, Exxon stressed that res judicata is
concerned with “claim” preclusion and not “argument” preclusion, leaving Exxon
free to raise constitutional arguments in state court to set aside the CID while
preserving its constitutional claims in federal court to enjoin the CID’s
enforcement. Again, we disagree.
Federal courts are required to “give preclusive effect to state-court
judgments whenever the courts of the [s]tate from which the judgments emerged
would do so.” Allen v. McCurry, 449 U.S. 90, 96 (1980). In Massachusetts, a prior
court decision may have claim-preclusive effect when there is “(1) the identity or
privity of the parties to the present and prior actions, (2) identity of the cause of
action, and (3) [a] prior final judgment on the merits.” Kobrin v. Bd. of Registration
in Med., 444 Mass. 837, 843 (2005) (citation omitted). Importantly, under
33
Massachusetts law, res judicata “prevents relitigation of all matters that . . . could
have been adjudicated,” not just those that were. Id. (citation omitted).
Applying these principles to the two actions before us, we agree with the
district court that all three elements of the res judicata test have been satisfied here.
1. The Parties in the Massachusetts and Federal Actions Are Identical.
Neither Exxon nor the Massachusetts Attorney General disputes that there
is a complete identity of the parties in the two actions. On June 15, 2016, Exxon
filed its federal complaint against the Massachusetts Attorney General in the
Northern District of Texas; a day later, it commenced an action in Massachusetts
Superior Court to set aside the CID and disqualify Attorney General Healey.
Accordingly, the first element of the res judicata test is clearly satisfied.
2. The Proceedings Raise Identical Claims.
Claims share identity when they “grow[] out of the same transaction, act, or
agreement, and seek[] redress for the same wrong.” Fassas v. First Bank & Tr. Co.
of Chelmsford, 353 Mass. 628, 629 (1968) (quoting Mackintosh v. Chambers, 285 Mass.
594, 596 (1934)). Claims can be identical for preclusion purposes even if raised
from “different posture[s] or in . . . different procedural form[s].” Wright Mach.
Corp. v. Seaman-Andwall Corp., 364 Mass. 683, 688 (1974). In fact, claim preclusion
34
may apply even when a claim has not been actually litigated in a prior proceeding,
as long as the claim could have been litigated in that first proceeding. See U.S. Nat’l
Ass’n v. McDermott, 87 Mass. App. Ct. 1103, 2015 WL 539311, at *1–2 (Jan. 30, 2015).
Parties cannot skirt res judicata merely “by seeking an alternative remedy,” Wright
Mach. Corp., 364 Mass. at 688, as “[t]he statement of a different form of liability is
not a different cause of action,” Fassas, 353 Mass. at 629 (internal quotation marks
omitted). That is because “[t]he effect of a former judgment . . . depends not upon
the form of the pleadings but upon the essence of the violation of legal right on
which pleadings are founded.” Mackintosh, 285 Mass. at 597.
Although raised in distinct procedural forms, Exxon’s state court petition
and federal complaint both concern the same essential violations of legal rights.
Both identify the same relevant injury: the CID’s alleged violation of various
federal constitutional provisions and their state analogues. For example, in its
state court petition to set aside the CID, Exxon alleged that “the CID constitutes
impermissible viewpoint discrimination by targeting ExxonMobil’s climate
change speech.” J. App’x at 1044. Similarly, in its first amended complaint in the
35
federal case, Exxon alleged that “the CID [is an] impermissible viewpoint-based
restriction[] on speech.” Id. at 434. 3
Moreover, the facts “relied upon to prove liability are essentially the same
as to both cases.” Ratner v. Rockwood Sprinkler Co., 340 Mass. 773, 776 (1960). As
the district court recognized, both sets of claims find support in overlapping facts,
including, among other things, allegations that (1) the New York and
Massachusetts Attorneys General joined the “AGs United for Clean Power”
conference, (2) climate activists gave private presentations to the Attorneys
General, (3) the Attorneys General publicly spoke with bias against Exxon, and (4)
the Attorneys General initiated overreaching and politically motivated
investigations in bad faith. See Exxon Mobil Corp. v. Schneiderman, 316 F. Supp. 3d
3 See also J. App’x at 1044 (alleging in the state petition that “in violation of ExxonMobil’s rights
under Article XIV of the Massachusetts Constitution, the CID launches an unreasonable fishing
expedition”); id. at 434–35 (alleging in the amended federal complaint that “[t]he subpoena and
CID are each unreasonable searches and seizures because each of them constitutes an abusive
fishing expedition . . . [which] violate[s] the Fourth Amendment’s reasonableness requirement”);
id. at 1044 (alleging in the state petition that the CID violates Exxon’s “due process right under
Article XII of the Massachusetts Constitution to a disinterested prosecutor”); id. at 435 (alleging
in the amended federal complaint that “[t]he subpoena and CID deprive ExxonMobil of due
process of law by violating the requirement that a prosecutor be disinterested”). Moreover, the
federal Commerce Clause claim, which does not have a Massachusetts analog, is identical for res
judicata purposes to the state claims. Both sets of claims concern the purported
unconstitutionality of the CID and draw from the same purportedly wrongful acts, alleging that
the CID was intended to regulate Exxon’s speech “while only purporting to investigate” Exxon
for deceptive practices. Id. at 436.
36
679, 701–02 (S.D.N.Y. 2018). [See also JA-1024–28.] Indeed, Exxon itself implied
that the two actions involved overlapping claims – not merely overlapping
arguments – in its state court filings. See J. App’x at 1111 (requesting that the state
court “defer[] considerations of claims that overlap with those presented in the
federal case”). 4
The fact that the actions arose in different procedural circumstances – via an
action to stop CID enforcement under Section 6(7) of Massachusetts General Laws
chapter 93A in the state case versus an affirmative § 1983 claim in federal court –
does not affect our analysis. See Wright Mach. Corp., 364 Mass. at 688–89. Nor does
it matter that the two actions sought nominally different remedies. See Tuite &
Sons, Inc. v. Shawmut Bank, N.A., 43 Mass. App. Ct. 751, 754 (1997) (rejecting
attempt to avoid res judicata by characterizing “affirmative damages” as distinct
from a defensive “offset” because “the gravamen of both actions is
indistinguishable”). So long as the same relief was available in the Massachusetts
proceeding, the fact that Exxon opted to seek different forms of relief in the two
actions is irrelevant to the issue of claim preclusion.
4 Exxon makes much of the SJC’s observation of “only a partial overlap in the subject matter of
[the] two actions,” Exxon Br. at 21 (quoting Exxon Mobil Corp. v. Att’y Gen., 479 Mass. 312, 329
(2018)), but the SJC’s short statement offers little insight about which claims in the state and federal
actions overlap or the significance of the differences between the claims that do not overlap.
37
Exxon nevertheless insists that the “state proceedings pertained to the
enforcement of a specific CID, while [the federal] action seeks an injunction of
Attorney General Healey’s investigation,” Exxon Br. at 55, and further contends
that certain declaratory and injunctive relief available for its affirmative § 1983
claims would not have been available in the “limited” CID proceeding, id. at 58–
60. 5 But the specific relief that Exxon now claims was available only in federal
court – namely, an injunction prohibiting pretextual investigations and ending the
Massachusetts Attorney General’s investigation – was equally available in state
court. For starters, Exxon’s emergency motion to set aside the CID acknowledged
that its Massachusetts action “seeks the same relief as [the] earlier-filed [federal]
action.” J. App’x at 1111–12 (emphasis added). In fact, Exxon repeatedly asserted
that adjudicating both actions would result in relief that was “duplicative” or
would render the latter action “moot.” See id. at 1046 (noting in CID petition that
“[s]taying the adjudication of this Petition would avoid the possibility of
duplicative or inconsistent rulings on ExxonMobil’s constitutional challenges to
5Notably, Exxon did not seek an injunction “halting or appropriately limiting the investigations”
until it proposed filing a second amended complaint. See J. App’x at 1983–84. The company’s
original complaint and first amended complaint requested only an injunction prohibiting
enforcement of the CID – the very relief sought in the Massachusetts CID action. See id. at 84–85,
438.
38
the CID”); id. at 1077 (Exxon arguing in support of its motion to set aside the CID
that, if granted, “the relief sought in [the federal] action would render this Petition
and motion moot”).
Although Exxon did argue to the SJC that a resolution of the issues pending
in the state suit would not “resolve the broader issues that are pending in [f]ederal
[c]ourt,” J. App’x at 1125, Exxon also conceded that all of its claims against the
Massachusetts Attorney General in both actions arose from the same operative
facts, id. at 1133–34. And it bears noting that Exxon did not merely seek to quash
or modify the CID under Section 6(7) of Massachusetts General Laws chapter 93A;
it also requested equitable relief relating to the broader investigation – asking the
state court to exercise its “inherent authority” to disqualify Attorney General
Healey from the investigation because of her public statements suggesting bias
against Exxon. See J. App’x at 1042–43; see also id. at 1060 (requesting
disqualification if the court “determines that it can exercise personal jurisdiction
over ExxonMobil”); Eli Lilly & Co. v. Gottstein, 617 F.3d 186, 195 (2d Cir. 2010)
(stating that a “protective order, like any ongoing injunction, is always subject to
the inherent power of the district court” and “might be thought of as a form of
injunction in . . . particular setting[s]” (internal quotation marks omitted) (quoting
39
Poliquin v. Garden Way, Inc., 989 F.2d 527, 535 (1st Cir. 1993)). The record thus
demonstrates that Exxon understood it could plead in the alternative – without
being concerned about waiving its personal jurisdiction objections – and request
relief outside the four corners of a traditional motion to quash. See Booth v. Augis,
72 Mass. App. Ct. 164, 168–69 (2008) (distinguishing cases like Heacock v. Heacock,
402 Mass. 21 (1988), “where the court in the first action . . . lacked jurisdiction to
hear the claims sought to be precluded in the second action (or to award the full
measure of relief)”); Exxon Mobil Corp., 479 Mass. at 329 n.15 (explaining that the
Superior Court “is not . . . limited [in its jurisdiction], and may hear any case under
[chapter] 93A ‘for damages and such equitable relief, including an injunction, as
the court deems to be necessary and proper’”(citation omitted)).
We are also unpersuaded by Exxon’s contention that res judicata does not
apply because the Massachusetts CID proceeding was limited in nature and thus
failed to provide Exxon with a full and fair opportunity to litigate its federal
claims. In a case involving New York’s res judicata law – which mirrors
Massachusetts law on that score – this Court rejected the suggestion that litigants
are in a “defensive” posture when they bring special proceedings objecting to
government actions; moreover, we expressly dismissed the notion that being in a
40
“defensive” posture would alter the analysis for claim preclusion. Bartel Dental
Books Co. v. Schultz, 786 F.2d 486, 489 & n.1 (2d Cir. 1986) (barring litigation of
§ 1983 claims that were or could have been litigated in state proceeding). Under
the essentially identical Massachusetts preclusion test, any differences in Exxon’s
ability to assert objections in the CID proceeding are therefore irrelevant.
Accordingly, we find that the claims brought in the federal action could
have been raised in the CID proceeding and are therefore identical for purposes of
Massachusetts res judicata law.
3. There Is a Prior Final Judgment on the Merits.
Finally, as to the third res judicata element, there can be no dispute that the
Massachusetts Superior Court issued a final order on January 11, 2017, which
denied Exxon’s petition to set aside the CID and granted the Massachusetts
Attorney General’s petition to compel Exxon’s production of documents. [JA-
1009–14.] Exxon appealed that final order to the SJC, which affirmed the Superior
Court’s decision on April 13, 2018. Exxon then sought certiorari before the United
States Supreme Court, which denied the petition on January 7, 2019. [Dkt. 213.]
Notwithstanding this series of final orders, Exxon argues that there was no
final judgment on the merits because the Superior Court expressly reserved
41
decision on Exxon’s constitutional claims. This argument is largely based on a
footnote in the Superior Court’s opinion in which the court stated that it would
“not address Exxon’s arguments regarding free speech at this time because
misleading or deceptive advertising is not protected by the First Amendment.” In
re Civ. Investigative Demand No. 2016-EPD-36, No. SUCV20161888F, 2017 WL
627305, at *4 n.2 (Mass. Super. Ct. Jan. 11, 2017). Reading the footnote to mean that
the court expressly reserved decision on the constitutional claims at issue here,
Exxon argues that “[n]o Massachusetts court has held [that res judicata] applies to
matters that a court could have adjudicated but elected not to.” Exxon Reply Br.
at 31.
But Exxon misconstrues the footnote in question. Considered in its entirety,
the Superior Court’s opinion clearly reflects that it rejected Exxon’s free speech
arguments centered on viewpoint discrimination after considering Exxon’s
contentions that the CID violated various state constitutional guarantees –
guarantees that Exxon acknowledged were coextensive with the First
Amendment. See, e.g., J. App’x at 1100 (Exxon arguing in its motion to set aside or
modify the CID that “Article XVI, like the First Amendment, prohibits government
action that targets speech because of its content” and citing Massachusetts case
42
law stating that Article XVI is coextensive with the First Amendment). Indeed,
Exxon thoroughly litigated its constitutional arguments before the Superior Court.
See id. at 1044 (Exxon arguing that Article XVI – the state First Amendment
analogue – “prohibits the Attorney General from issuing a CID to prescribe what
shall be orthodox in matters of public concern”); id. at 1071 (Exxon arguing that
the CID violates Article XVI, because it “impermissibly infringes ExxonMobil’s
political speech”); id. at 1073 (Exxon arguing that pursuant to Article XIV – the
state analogue to the Fourth Amendment – “‘unreasonable’ civil investigative
demands ‘must be quashed or modified’” (citation omitted)); see also id. at 1216–18
(counsel for the Attorney General addressing at oral argument whether the CID
violates free speech and unreasonable search and seizure guarantees).
The footnote on which Exxon stakes its argument in no way limited or
conditioned the state court’s decision to uphold the CID, and the record reflects
that the court could not have upheld the CID without first concluding that Exxon’s
impermissible motive claims were meritless. See Att’y Gen. v. Colleton, 387 Mass.
790, 800 (1982) (explaining that “[civil investigative] demands which invade any
constitutional rights of the investigated party cannot be condoned”). We therefore
find that the constitutional claims against the Massachusetts Attorney General
43
were fully litigated and decided in a final judgment on the merits.
* * *
Because all three elements of the Massachusetts claim preclusion test have
been satisfied, we agree with the district court that Exxon’s First Amendment
claims are barred by the doctrine of res judicata.
III. CONCLUSION
For the reasons stated above, we conclude that Exxon’s claims against the
New York Attorney General are moot and grant the Attorney General’s motion to
dismiss, see Dkt. 190, as the Attorney General’s investigation has ceased, the
subsequent enforcement action has been decided in Exxon’s favor, and the state is
not appealing that decision. We further conclude that Exxon’s claims against the
Massachusetts Attorney General are barred under the doctrine of res judicata, as
Exxon could have pursued the relief it now seeks in an earlier Massachusetts state
court proceeding arising from the same underlying events. Accordingly, we
DISMISS Exxon’s appeal as to the New York Attorney General and AFFIRM the
district court’s judgment as to the Massachusetts Attorney General.
44