Exxon Mobil Corp. v. Attorney General , 479 Mass. 312 ( 2018 )

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SJC-12376
EXXON MOBIL CORPORATION vs. ATTORNEY GENERAL.
Suffolk. December 5, 2017. - April 13, 2018.
Present: Gants, C.J., Gaziano, Lowy, Budd, Cypher, &
Kafker, JJ.
Attorney General. Consumer Protection Act, Investigative
demand. Jurisdiction, Personal, Foreign corporation, Long-
arm statute. Due Process of Law, Jurisdiction over
nonresident.
Motion filed in the Superior Court Department on June 16,
2016.
The proceeding was heard by Heidi E. Brieger, J.
The Supreme Judicial Court on its own initiative
transferred the case from the Appeals Court.
Justin Anderson, of the District of Columbia (Jamie D.
Brooks & Theodore V. Wells, Jr., of New York, Thomas C.
Frongillo, & Caroline K. Simons also present) for the plaintiff.
Richard A. Johnston, Assistant Attorney General (Melissa A.
Hoffer, I. Andrew Goldberg, Christopher G. Courchesne, Peter C.
Mulcahy, & Seth Schofield, Assistant Attorneys General, also
present) for the defendant.
Wendy B. Jacobs & Shaun A. Goho, for Francis X. Bellotti &
others, amici curiae, submitted a brief.
2
Archis A. Parasharami, of the District of Columbia, &
Steven P. Lehotsky, for Chamber of Commerce of the United States
of America, amicus curiae, submitted a brief.
CYPHER, J. In 2015, news reporters released internal
documents from Exxon Mobil Corporation (Exxon) purporting to
show that the company knew, long before the general public, that
emissions from fossil fuels -- Exxon's principal product --
contributed to global warming and climate change, and that in
order to avoid the consequences of climate change it would be
necessary to reduce drastically global fossil fuel consumption.
The documents also purported to establish that despite Exxon's
knowledge of climate risks, the company failed to disclose that
knowledge to the public, and instead sought to undermine the
evidence of climate change altogether, in order to preserve its
value as a company.
Upon reviewing this information, the Attorney General
believed that Exxon's marketing or sale of fossil fuel products
in Massachusetts may have violated the State's primary consumer
protection law, G. L. c. 93A. Based on her authority under
G. L. c. 93A, § 6, the Attorney General issued a civil
investigative demand (C.I.D.) to Exxon, seeking documents and
information relating to Exxon's knowledge of and activities
related to climate change.
3
Exxon responded by filing a motion in the Superior Court,
pursuant to G. L. c. 93A, § 6 (7), seeking to set aside or
modify the C.I.D. Exxon argued that (1) Exxon is not subject to
personal jurisdiction in Massachusetts; (2) the Attorney General
is biased against Exxon and should be disqualified; (3) the
C.I.D. violates Exxon's statutory and constitutional rights; and
(4) Exxon's Superior Court case should be stayed pending a
ruling on Exxon's request for relief in Federal court.1 The
Attorney General cross-moved to compel Exxon to comply with the
C.I.D. A Superior Court judge denied Exxon's motion and allowed
the Attorney General's cross motion to compel. Exxon appealed,
and we transferred the case from the Appeals Court on our own
motion. We conclude that there is personal jurisdiction over
Exxon with respect to the Attorney General's investigation, and
that the judge did not abuse her discretion in denying Exxon's
requests to set aside the C.I.D., disqualify the Attorney
General, and issue a stay. We affirm the judge's order in its
entirety.2
1 One day before filing its instant Superior Court motion,
Exxon filed a complaint for declaratory and injunctive relief in
the United States District Court for the Northern District of
Texas, challenging the C.I.D. on constitutional grounds not
raised in this action. Exxon Mobil Corp. vs. Healey, U.S. Dist.
Ct., No. 4:16-CV-469 (N.D. Tex. June 15, 2016).
2 We acknowledge the amicus briefs submitted by five former
Massachusetts Attorneys General and the Chamber of Commerce of
the United States of America.
4
1. Personal jurisdiction. Exxon's primary argument is
that, as a nonresident corporation, it is not subject to
personal jurisdiction in Massachusetts. For a nonresident to be
subject to the authority of a Massachusetts court, the exercise
of jurisdiction must satisfy both Massachusetts's long-arm
statute, G. L. c. 223A, § 3, and the requirements of the due
process clause of the Fourteenth Amendment to the United States
Constitution. SCVNGR, Inc. v. Punchh, Inc., 478 Mass. 324, 325
(2017). The Attorney General "has the burden of establishing
the facts upon which the question of personal jurisdiction over
[Exxon] is to be determined." Droukas v. Divers Training
Academy, Inc., 375 Mass. 149, 151 (1978), quoting Nichols
Assocs. v. Starr, 4 Mass. App. Ct. 91, 93 (1976).
A business is a "resident," and therefore subject to the
forum's general jurisdiction, if the business is domiciled or
incorporated or has its principal place of business in the forum
State. Goodyear Dunlop Tires Operations, S.A. v. Brown, 564
U.S. 915, 924 (2011). Exxon is incorporated in New Jersey and
headquartered in Texas. Because "[t]he total of [Exxon's]
activities in Massachusetts does not approach the volume
required for an assertion of general jurisdiction," Tatro v.
Manor Care, Inc., 416 Mass. 763, 772 n.6 (1994), citing
Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408,
413-416 (1984), our inquiry in this case concerns the exercise
5
of specific jurisdiction. This requires an "affiliatio[n]
between the forum and the underlying controversy" (citation
omitted). Goodyear Dunlop Tires Operations, S.A., supra at 919.
See G. L. c. 223A, § 3 (granting jurisdiction over claims
"arising from" certain enumerated grounds occurring within
Massachusetts); Tatro, supra at 772, citing Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 472 (1985) ("The plaintiff's claim must
arise out of, or relate to, the defendant's forum contacts").
Exxon denies any such affiliation in this case, contending
that it "engages in no suit-related conduct" in Massachusetts.
Here there is no "suit," however, as this matter involves an
investigation -- a precursor to any formal legal action by the
Attorney General. So while our typical inquiry asks whether
there is a nexus between the defendant's in-State activities and
the plaintiff's legal claim(s), the investigatory context
requires that we broaden our analysis to consider the
relationship between Exxon's Massachusetts activities and the
"central areas of inquiry covered by the [Attorney General's]
investigation, regardless of whether that investigation has yet
to indicate [any] . . . wrongdoing." Securities & Exch. Comm'n
vs. Lines Overseas Mgt., Ltd., U.S. Dist. Ct., No. Civ.A. 04-302
RWR/AK (D.D.C. Jan. 7, 2005). Cf. Gucci Am., Inc. v. Weixing
Li, 768 F.3d 122, 141-142 (2d Cir. 2014) (personal jurisdiction
in nonparty discovery dispute "focus[es] on the connection
6
between the nonparty's contacts with the forum and the discovery
order at issue"); Matter of an Application to Enforce Admin.
Subpoenas Duces Tecum of the Secs. Exch. Comm'n v. Knowles, 87
F.3d 413, 418 (10th Cir. 1996) (personal jurisdiction over
nonresident in subpoena enforcement action, which was part of
investigation into potential violation of Federal securities
laws, where "[t]he underlying investigation and th[e] subpoena
. . . ar[o]se out of [nonresident's] contacts with the United
States"). At this stage, the Attorney General is statutorily
authorized to investigate whatever conduct she believes may
constitute a violation of G. L. c. 93A. G. L. c. 93A, § 6 (1).
We therefore must construe the C.I.D. broadly, and in connection
with what G. L. c. 93A protects.
General Laws c. 93A "is a statute of broad impact" that
prohibits "unfair methods of competition" and "unfair or
deceptive acts or practices in the conduct of any trade or
commerce." Slaney v. Westwood Auto, Inc., 366 Mass. 688, 693-
694 (1975). See G. L. c. 93A, § 2 (a). "Under [G. L. c.] 93A,
an act or practice is unfair if it falls 'within at least the
penumbra of some common-law, statutory, or other established
concept of unfairness'; 'is immoral, unethical, oppressive, or
unscrupulous'; and 'causes substantial injury to consumers.'"
Walsh v. TelTech Sys., Inc., 821 F.3d 155, 160 (1st Cir. 2016),
quoting PMP Assocs., Inc. v. Globe Newspaper Co., 366 Mass. 593,
7
596 (1975). The same protection also applies in the commercial
context, as G. L. c. 93A extends "to persons engaged in trade or
commerce in business transactions with other persons also
engaged in trade or commerce." Kraft Power Corp. v. Merrill,
464 Mass. 145, 155 (2013), quoting Manning v. Zuckerman, 388
Mass. 8, 12 (1983). See Kraft Power Corp., supra, citing G. L.
c. 93A, § 11 ("The development of the statute . . . suggests
that the unfair or deceptive acts or practices prohibited are
those that may arise in dealings between discrete, independent
business entities").
Our analysis of what constitutes an unfair or deceptive act
or practice requires a case-by-case analysis, see Kattar v.
Demoulas, 433 Mass. 1, 14 (2000), and is neither dependent on
traditional concepts nor limited by preexisting rights or
remedies. Travis v. McDonald, 397 Mass. 230, 232 (1986). "This
flexible set of guidelines as to what should be considered
lawful or unlawful under c. 93A suggests that the Legislature
intended the terms 'unfair and deceptive' to grow and change
with the times." Nei v. Burley, 388 Mass. 307, 313 (1983).
The Attorney General's investigation concerns climate
change caused by manmade greenhouse gas emissions -- a
distinctly modern threat that grows more serious with time, and
the effects of which are already being felt in Massachusetts.
See, e.g., Massachusetts v. Environmental Protection Agency, 549
8
U.S. 497, 521-523 (2007) (describing current and future harms
from climate change affecting Massachusetts). More
particularly, the investigation is premised on the Attorney
General's belief that Exxon may have misled Massachusetts
residents about the impact of fossil fuels on both the Earth's
climate and the value of the company, in violation of c. 93A.
"Despite [Exxon's] sophisticated internal knowledge" about that
impact, the Attorney General states, "it appears that . . .
Exxon failed to disclose what it knew to either the consumers
who purchased its fossil fuel products or investors who
purchased its securities." Because the crux of a failure to
disclose theory is knowledge, the C.I.D. seeks "information
related to . . . what Exxon knew about (a) how combustion of
fossil fuels (its primary product) contributes to climate change
and (b) the risk that climate change creates for the value of
Exxon's businesses and assets." The C.I.D. also seeks
information about "when Exxon learned those facts" and "what
Exxon told Massachusetts consumers and investors, among others,
about [them]." The primary question for us is whether there is
a sufficient connection between those inquiries and Exxon's
Massachusetts-based activities.
9
a. Long-arm analysis.3 Massachusetts's long-arm statute,
G. L. c. 223A, § 3, "sets out a list of specific instances in
which a Massachusetts court may acquire personal jurisdiction
over a nonresident defendant." Tatro, 416 Mass. at 767. "A
plaintiff has the burden of establishing facts to show that the
ground relied on under § 3 is present." Id. In the Superior
Court, the Attorney General invoked the "transacting any
business" clause of § 3, so we focus our inquiry on that
subsection. See G. L. c. 223A, § 3 (a) ("[a] court may exercise
personal jurisdiction over a person . . . as to a cause of
action in law or equity arising from the person's . . .
transacting any business in this commonwealth"). "For
jurisdiction to exist under § 3 (a), the facts must satisfy two
requirements -- the defendant must have transacted business in
Massachusetts, and the plaintiff's claim must have arisen from
3 The parties' arguments on the jurisdictional issues focus
exclusively on the due process question, forgoing any analysis
under Massachusetts's long-arm statute, G. L. c. 223A, § 3. We
recently clarified, however, that Massachusetts courts cannot
"streamline" the personal jurisdiction inquiry by focusing
solely on due process considerations, under the theory that the
limits imposed by the long-arm statute and due process are
coextensive. See SCVNGR, Inc. v. Punchh, Inc., 478 Mass. 324,
329-330 & n.9 (2017). They are not. Id. "The long-arm statute
'asserts jurisdiction over [a nonresident] to the constitutional
limit only when some basis for jurisdiction enumerated in the
statute has been established." Id. at 329, quoting Good Hope
Indus., Inc. v. Ryder Scott Co., 378 Mass. 1, 6 (1979). We
analyze the long-arm statute's requirement first "in order to
avoid unnecessary consideration of constitutional questions."
SCVNGR, Inc., supra at 325.
10
the transaction of business by the defendant." Tatro, supra at
767. We construe these dual requirements "broadly," id. at 771,
and conclude that they are satisfied here.
In Massachusetts, Exxon operates a franchise network of
more than 300 retail service stations under the Exxon and Mobil
brands that sell gasoline and other fossil fuel products to
Massachusetts consumers. The Attorney General contends that
this network establishes an independent basis for personal
jurisdiction over Exxon in this matter.4 The franchise system is
governed by a Brand Fee Agreement (BFA). Under section 7 of the
BFA, the "BFA Holder" pays Exxon a monthly fee for the use of
Exxon's trademarks and to participate in Exxon's business
services and programs at the BFA Holder's gasoline stations.
Under section 5 of the BFA, Exxon prescribes a method for
converting unbranded fuel to Exxon- and Mobil-branded gasoline
by injecting certain fuel additives; these additives are to be
obtained exclusively from suppliers identified by Exxon, and are
inserted according to Exxon's specifications. Under section
7(a)(ii) of the BFA, the dollar amount of a BFA Holder's monthly
fee is determined in part by the total amount of Exxon- and
The Attorney General also cites additional Massachusetts
4
contacts besides Exxon's franchise network as grounds for our
exercise of personal jurisdiction over Exxon. We address those
contacts in our discussion of due process, given our conclusion
that the "literal requirements of the [long-arm] statute are
satisfied" through Exxon's franchise system. Tatro v. Manor
Care, Inc., 416 Mass. 763, 767 (1994).
11
Mobil-branded fuel sold at the BFA Holder's stations.
Specifically, the monthly fee for the final five years of BFA
shall equal the amount agreed to between the parties or an
amount determined by "Recalculated Total Volume," which is the
function of "the total volume of [Exxon- and Mobil-branded fuel]
sold in the aggregate by all Direct Served Outlets" during a
given period.
The sample BFA submitted to the Superior Court was struck
between Exxon and a Massachusetts-based limited liability
company; it states that it shall be in effect for a period of
fifteen years, with possible extensions, and governs the
operation of over 300 Exxon- and Mobil-branded "retail motor
fuel outlets" located throughout the State. This network
represents Exxon's "purposeful and successful solicitation of
business from residents of the Commonwealth," Tatro, 416 Mass.
at 767, such that it satisfies the "transacting any business"
prong of § 3 (a).
The more difficult question is whether the C.I.D. "aris[es]
from" this network of Exxon- or Mobil-branded fuel stations.
G. L. c. 223A, § 3 (a). Exxon argues that it does not, because
while the Attorney General's investigation is concerned
primarily with Exxon's marketing and advertising of its fossil
fuel products to Massachusetts consumers, Exxon does not control
its franchisees' advertising, and hence those communications
12
cannot be attributed to Exxon for purposes of personal
jurisdiction. The judge determined that Exxon's assertion of a
lack of control over franchisees' advertising conflicts with the
terms of the BFA. We agree. Section 15(a) requires the BFA
Holder and "its Franchise Dealers to diligently promote the sale
of [Exxon- or Mobil-branded fuel], including through
advertisements," and states that "Exxon[] shall have the
authority to review and approve, in its sole discretion, all
forms of advertising and sales promotions . . . for the
promotion and sale of any product, merchandise or services" that
"(i) uses or incorporates any [Exxon trademark] or (ii) relates
to any Business operated at a BFA Holder Branded Outlet." This
section also obligates the BFA Holder to "expressly require all
Franchise Dealers to . . . agree to such review and control by
Exxon[]."5
In Depianti v. Jan-Pro Franchising Int'l, Inc., 465 Mass.
607, 617 (2013), we applied the "right to control" test to the
franchisor-franchisee relationship, holding that "a franchisor
5 Exxon says that it proffered evidence below that "BFA
holders control their own marketing," citing to certain
provisions of the BFA and to an affidavit from Exxon's United
States Branded Wholesale Manager, Geoffrey Doescher. The cited-
to provisions of the BFA (sections 2[e][6] and 3[a], [h])
address the establishment of the franchise relationship and the
use of Exxon's trademarks, and do not clarify control over
advertising. Similarly, while the Doescher affidavit states in
conclusory fashion that Exxon does not control the "marketing
of" or "advertisements by BFA-holders," this is belied by
section 15(a) of the BFA.
13
is vicariously liable for the conduct of its franchisee only
where the franchisor controls or has a right to control the
specific policy or practice resulting in harm to the plaintiff."
This test is a useful measure for determining when the conduct
of a franchisee may be properly attributed to a franchisor, and
we believe that it is equally well suited to our analysis of
personal jurisdiction in this case. By virtue of section 15(a)
of the BFA, Exxon has the right to control the advertising of
its fossil fuel products to Massachusetts consumers.6
This leads to our conclusion that the C.I.D. "aris[es]
from" the BFA and Exxon's network of branded fuel stations in
Massachusetts. G. L. c. 223A, § 3 (a). Through its control
over franchisee advertising, Exxon communicates directly with
Massachusetts consumers about its fossil fuel products (and
hence we reject Exxon's assertion that it "has no direct contact
with any consumers in Massachusetts"). This control comports
with one of Exxon's "primary business purpose[s]" as expressed
6 We are not persuaded by Exxon's argument that its control
over franchisee advertising is solely to protect its trademarks
under Federal law. See Depianti v. Jan-Pro Franchising Int'l,
Inc., 465 Mass. 607, 615 (2013) ("Under Federal law, a
franchisor is required to maintain control and supervision over
a franchisee's use of its mark, or else the franchisor will be
deemed to have abandoned its mark under the abandonment
provisions of the Lanham Act"). Section 15(a) expressly states
that Exxon's exclusive authority to review and approve such
advertising extends not only to advertisements that incorporate
Exxon's trademarks, but also, more broadly, to advertising that
"relates to any Business operated at a BFA Holder Branded
Outlet" (emphasis added).
14
in section 13(a) of the BFA: "to optimize effective and
efficient . . . representation of [Exxon- and Mobil-branded
fuel] through planned market and image development." The C.I.D.
seeks information about the nature and extent of Exxon's
Massachusetts advertisements, including those disseminated
through Exxon's franchisees.
More broadly, the C.I.D. seeks information concerning
Exxon's internal knowledge about climate change. Many of the
requests in the C.I.D. seek documents to substantiate public
statements made by Exxon in recent years on the topic of climate
change. Exxon protests that its franchisees have nothing to do
with climate change and have played no part in disseminating
those statements, so the Attorney General's requests cannot
"arise from" Exxon's franchise system. Bearing in mind the
basis for the C.I.D. and the Attorney General's investigation,
G. L. c. 93A, we disagree.
The statute authorizes the Attorney General to initiate an
investigation "whenever [s]he believes a person has engaged in
or is engaging in" a violation of G. L. c. 93A, in order "to
ascertain whether in fact [that] person" is doing so. G. L.
c. 93A, § 6 (1). A person may violate G. L. c. 93A through
false or misleading advertising. "Our cases . . . establish
that advertising need not be totally false in order to be deemed
deceptive in the context of G. L. c. 93A. . . . The criticized
15
advertising may consist of a half-truth, or even may be true as
a literal matter, but still create an over-all misleading
impression through failure to disclose material information."
Aspinall v. Philip Morris Cos., 442 Mass. 381, 394-395 (2004).7
In order to determine whether Exxon engaged in deceptive
advertising at its franchisee stations, by either giving a
misleading impression or failing to disclose material
information about climate change, the Attorney General must
first ascertain what Exxon knew about that topic.
b. Due process. We must also determine whether the
exercise of personal jurisdiction over Exxon comports with the
requirements of due process. The "touchstone" of this inquiry
remains "whether the defendant purposefully established 'minimum
contacts' in the forum state." Tatro, 416 Mass. at 772, quoting
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985). "The
due process analysis entails three requirements. First, minimum
contacts must arise from some act by which the defendant
purposefully avails itself of the privilege of conducting
7 See 940 Code Mass. Regs. § 3.02(2) (2014) ("No statement
or illustration shall be used in any advertisement . . . which
may . . . misrepresent the product in such a manner that later,
on disclosure of the true facts, there is a likelihood that the
buyer may be switched from the advertised product to another");
940 Code Mass. Regs. § 3.05(1)-(2) (1993) ("No claim or
representation shall be made by any means concerning a product
which directly, or by implication, or by failure to adequately
disclose additional relevant information, has the capacity or
tendency or effect of deceiving buyers or prospective buyers in
any material respect").
16
activities within the forum State, thus invoking the benefits
and protections of its laws. . . . Second, the claim must arise
out of or relate to the defendant's contacts with the forum.
. . . Third, the assertion of jurisdiction over the defendant
must not offend traditional notions of fair play and substantial
justice" (citations and quotations omitted). Bulldog Investors
Gen. Partnership v. Secretary of the Commonwealth, 457 Mass.
210, 217 (2010).8
8 Following the Superior Court judge's decision and the
parties' submission of their appellate briefs, the United States
Supreme Court decided Bristol-Myers Squibb Co. v. Superior Court
of Cal., San Francisco County, 137 S. Ct. 1773 (2017) (Bristol-
Myers), which addresses the exercise of specific personal
jurisdiction. Exxon argues that Bristol-Myers controls our
decision, but we are not persuaded. Bristol-Myers concerned
whether the California Supreme Court properly exercised personal
jurisdiction over the claims of nonresident plaintiffs, despite
the lack of any identifiable connection between those
plaintiffs' claims and the nonresident defendant's activities in
California. Id. at 1778. In concluding that there was personal
jurisdiction over the nonresident plaintiffs' claims, the
California Supreme Court applied a "sliding scale approach,"
under which "the strength of the requisite connection between
the forum and the specific claims at issue is relaxed if the
defendant has extensive forum contacts that are unrelated to
those claims." Id. at 1781. The Supreme Court reversed,
criticizing the "sliding scale approach" and reiterating the
need for "a connection between the forum and the specific claims
at issue." Id. Unlike in Bristol-Myers, the Attorney General's
investigation is brought on behalf of Massachusetts residents,
for potential violations occurring within Massachusetts.
Moreover, our conclusion that there is personal jurisdiction
over Exxon here rests not on Exxon's general Massachusetts-based
activities, but on the nexus between certain of Exxon's
Massachusetts-based activities and the Attorney General's
investigation.
17
First, Exxon has purposefully availed itself of the
privilege of conducting business activities in Massachusetts,
with both consumers and other businesses. As mentioned, Exxon
is the franchisor of over 300 Exxon- and Mobil-branded service
stations located throughout Massachusetts, and through that
arrangement Exxon controls the marketing of its products to
Massachusetts consumers. In addition, Exxon admits that it
created Massachusetts-specific advertisements for its products
in print and radio. Such "advertising in the forum State,"
especially when coupled with its extensive franchise network, is
indicative of Exxon's "intent or purpose to serve the market in
the forum State." Asahi Metal Indus. Co., Ltd. v. Superior
Court of Cal., Solano County, 480 U.S. 102, 112 (1987). See
Workgroup Tech. Corp. v. MGM Grand Hotel, LLC, 246 F. Supp. 2d
102, 114 (D. Mass. 2003) (purposeful availment where defendant
"had advertisements in publications that circulated in
Massachusetts" and "purposefully derived economic benefits from
its forum-[S]tate activities"); Gunner v. Elmwood Dodge, Inc.,
24 Mass. App. Ct. 96, 99-101 (1987) (out-of-State company's
advertisements "aimed squarely at Massachusetts targets," which
were directed "at establishing ongoing relationships with
Massachusetts consumers," supported jurisdiction). Exxon also
operates a Web site that is accessible in Massachusetts and
enables visitors to locate the nearest Exxon- and Mobil-branded
18
service station or retailer. See Hilsinger Co. v. FBW Invs.,
109 F. Supp. 3d 409, 428-429 (D. Mass. 2015) (purposeful
availment where nonresident defendant's Web site enabled
visitors to contact company to learn where they can buy its
products); Bulldog Investors Gen. Partnership, 457 Mass. at 217
(solicitation sent to Massachusetts resident, coupled with Web
site accessible in Massachusetts, made it "reasonable for the
[nonresident] to anticipate being held responsible in
Massachusetts").
Further, Exxon's franchise system in Massachusetts is
governed by a contract, the BFA. While such a contractual
relationship is not necessarily a "contact," Burger King Corp.,
471 U.S. at 478, when that relationship "reach[es] out beyond
one [S]tate and create[s] continuing relationships and
obligations with citizens of another [S]tate," the nonresident
subjects itself to that other State's jurisdiction for claims
related to the contract. Travelers Health Ass'n v. Virginia ex
rel. State Corp. Comm'n, 339 U.S. 643, 647 (1950). See Baskin–
Robbins Franchising LLC v. Alpenrose Dairy, Inc., 825 F.3d 28,
38 (1st Cir. 2016) (purposeful availment where, among other
things, defendant received monthly payments from plaintiff's
Massachusetts headquarters). Under the BFA, the BFA Holder pays
Exxon a monthly fee in exchange for the use of Exxon's
trademarks, as well as various Exxon business services and
19
programs, including training and uniforms; Exxon also assists
the BFA Holder in procuring the additives necessary to create
and sell Exxon- and Mobil-branded fuel. Through this agreement
Exxon has "deliberately targeted the Massachusetts economy and
reasonably should have foreseen that, if a controversy
developed, it might be haled into a Massachusetts court."
Baskin–Robbins Franchising LLC, supra at 39.
The Attorney General's investigation "arise[s] out of, or
relate[s] to" these contacts. Tatro, 416 Mass. at 772. As
mentioned, the Attorney General is authorized to investigate
potential violations of G. L. c. 93A. G. L. c. 93A, § 6. In
addition to prohibiting deceptive advertising to consumers,
Aspinall, 442 Mass. at 395, c. 93A also requires honest
disclosures in transactions between businesses. See Kraft Power
Corp., 464 Mass. at 155; G. L. c. 93A, § 11. "A duty exists
under c. 93A to disclose material facts known to a party at the
time of a transaction." Underwood v. Risman, 414 Mass. 96, 99-
100 (1993). The C.I.D. seeks information relating to Exxon's
knowledge of "the risk that climate change creates for the value
of [its] businesses and assets," and "what Exxon told
Massachusetts consumers and investors, among others, about those
facts." Possible misrepresentations or omissions about the
threat that climate change poses to Exxon's business model are
highly relevant to its contracts with BFA Holders, who agree,
20
under section 1 of the BFA, to fifteen-year terms with Exxon and
who are required, under section 21(b), to indemnify Exxon
against all claims and liabilities based on State consumer
protection and environmental laws, among others.
The exercise of personal jurisdiction over Exxon also does
not offend "traditional notions of fair play and substantial
justice." International Shoe Co. v. Washington, 326 U.S. 310,
316 (1945), quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940).
See Burger King Corp., 471 U.S. at 477 (where court has
determined nonresident has requisite minimum contacts, party
must "present a compelling case that the presence of some other
considerations would render jurisdiction unreasonable"). Exxon
has produced no evidence that responding to the Attorney
General's investigation would be unreasonable. Even assuming
that it had, we would balance that showing with "the
Commonwealth's interest in enforcing its laws in a Massachusetts
forum." Bulldog Investors Gen. Partnership, 457 Mass. at 218.
As Massachusetts's chief law enforcement officer, the Attorney
General has a manifest interest in enforcing G. L. c. 93A. See,
e.g., G. L. c. 93A, § 6 (Attorney General may investigate
"whenever [s]he believes" c. 93A violation has occurred); id. at
§ 4 (Attorney General may file civil actions "in the name of the
commonwealth"); id. at § 5 (Attorney General may seek assurances
of discontinuance of unlawful acts or practices); id. at § 2 (c)
21
(Attorney General "may make rules and regulations interpreting"
what constitutes unlawful act or practice).9
2. Exxon's challenge to the substance of the C.I.D. Exxon
also challenges the C.I.D. based on its content, arguing that it
is "overbroad and unduly burdensome," as well as "arbitrary and
capricious." Exxon argues that these points constitute "good
cause" warranting our modifying or setting aside the C.I.D.
under G. L. c. 93A, § 6 (7) ("the court may, upon motion for
good cause shown . . . modify or set aside such demand or grant
a protective order"). As "[t]he party moving to set aside [the]
C.I.D.[, Exxon] bears a heavy burden to show good cause why it
should not be compelled to respond." CUNA Mut. Ins. Soc'y v.
Attorney Gen., 380 Mass. 539, 544 (1980). See Attorney Gen. v.
Bodimetric Profiles, 404 Mass. 152, 155 (1989). The judge
concluded that Exxon had failed to sustain that burden, and we
review her conclusion for an abuse of discretion. Matter of a
9 Because we conclude that due process is satisfied by
virtue of the nexus between the Attorney General's investigation
and Exxon's franchise system, we need not reach the parties'
arguments with respect to the Attorney General's alternative
theory that Exxon may have deceived investors with respect to
climate change. Although the cover letter of the C.I.D. states
that the investigation concerns potential violations of G. L.
c. 93A with respect to both consumers and investors, very few of
the C.I.D.'s requests even mention investors or securities, and
even then, those requests likewise concern Exxon's internal
knowledge and discussions concerning climate change (in these
requests, for the purpose of preparing securities filings or
investor communications). Given the focus on Exxon's knowledge,
these requests also relate sufficiently to the Attorney
General's consumer deception theory.
22
Civil Investigative Demand Addressed to Yankee Milk, Inc., 372
Mass. 353, 356 (1977) (Yankee Milk) ("in C.I.D. matters there
must be, as in all discovery proceedings, a broad area of
discretion residing in the judge").
By its terms, G. L. c. 93A, § 6, authorizes the Attorney
General to initiate an investigation "whenever [s]he believes a
person has engaged in or is engaging in any method, act or
practice declared to be unlawful by this chapter." This grants
the Attorney General "broad investigatory powers." Bodimetric
Profiles, 404 Mass. at 157. See Yankee Milk, 372 Mass. at 364
("the Legislature [particularly in providing that the
interrogated party must show 'good cause' why demands should not
be honored] has indicated that the statute should be construed
liberally in favor of the government"). Still, the statute
imposes certain limitations on the scope of the Attorney
General's investigative authority that we must consider.
In pertinent part, § 6 (1) (b) authorizes the Attorney
General to "examine . . . any documentary material . . .
relevant to such alleged unlawful method, act or practice" that
is the subject of the Attorney General's investigation. This
"sets forth a relevance test to define the documents the
Attorney General may examine." Yankee Milk, 372 Mass. at 357.
See Bodimetric Profiles, 404 Mass. at 156. Her power to examine
such documents is further constrained by § 6 (5), in particular
23
its provision prohibiting a C.I.D. from "contain[ing] any
requirement [that] would be unreasonable or improper if
contained in a subpoena duces tecum issued by a court of the
[C]ommonwealth." We have interpreted this particular provision
to impose a "three-pronged test" intended to "balance the
opposing interests of the investigator and the investigated."
Yankee Milk, supra at 361 n.8. Here, a court must consider (1)
whether the C.I.D. "describe[s] with reasonable particularity
the material required,"10 (2) whether "the material required is
not plainly irrelevant to the authorized investigation,"11 and
(3) whether "the quantum of material required does not exceed
reasonable limits." Id. at 360-361. See Matter of a Civil
Investigative Demand Addressed to Bob Brest Buick, Inc., 5 Mass.
App. Ct. 717, 719-720 (1977) ("It cannot now be said that the
C.I.D., as modified, was too indefinite, exceeded reasonable
limits, or was plainly irrelevant . . . to the public interest
sought to be protected" [citations and quotations omitted]).
10This factor mirrors the particularity requirement of the
previous section, G. L. c. 93A, § 6 (4) (c), which mandates that
the notice of a C.I.D. "describe the class or classes of
documentary material to be produced thereunder with reasonable
specificity, so as fairly to indicate the material demanded."
See Yankee Milk, 372 Mass. at 361 (observing that these two
provisions "impose[] . . . an equivalent [specificity]
standard").
11Similarly, the relevance requirement of this second
factor mirrors the relevance requirement of § 6 (1) (b), and we
interpret the two to impose an identical standard.
24
"Violation of one of these standards [under § 6 (5)] constitutes
'good cause' allowing the court to modify or set aside a demand"
pursuant to § 6 (7). Yankee Milk, supra at 359 n.7. See Harmon
Law Offices, P.C. v. Attorney Gen., 83 Mass. App. Ct. 830, 834-
835 (2013) ("Good cause is shown only if the moving party
demonstrates that the Attorney General acted arbitrarily or
capriciously or that the information sought is plainly
irrelevant"). With these limitations in mind, we turn to the
judge's conclusion that Exxon had not met its burden of showing
"why it should not be compelled to respond" to the C.I.D. CUNA
Mut. Ins. Soc'y, 380 Mass. at 544.
First, we agree with the judge that the C.I.D. describes
with reasonable particularity the material requested, G. L. c.
93A, § 6 (4) (c), (5), given its focus on Exxon's knowledge of
the impacts of carbon dioxide and other fossil fuel emissions on
the Earth's climate. With respect to the relevance of the
materials sought, Exxon argues that the Attorney General's
request for historic documents dating as far back as 1976 are
not relevant to an investigation under c. 93A, which carries a
four-year statute of limitations. G. L. c. 260, § 5A. We find
no support for Exxon's position, either in law (Exxon fails to
cite any case) or logic. A document created more than four
years ago is, of course, still probative of Exxon's present
knowledge on the issue of climate change, and whether Exxon
25
disclosed that knowledge to the public. Because these materials
are not "plainly irrelevant," Yankee Milk, 372 Mass. at 360, the
requests are permissible under this factor.
We are also not persuaded that the C.I.D.'s requests
"exceed reasonable limits." Id. at 361. Documentary demands do
so "only when they 'seriously interfere with the functioning of
the investigated party by placing excessive burdens on manpower
or requiring removal of critical records.'" Bodimetric
Profiles, 404 Mass. at 159, quoting Yankee Milk, supra at 361
n.8. In analyzing this point, the judge properly considered the
fact that Exxon has already complied with a request for similar
documents from New York's Attorney General. The judge
reasonably inferred that it would not be too burdensome for
Exxon, having already complied with that request, to comply with
the Massachusetts C.I.D., which is similar in nature.12 Exxon
does not cite to the record before us to support a contrary
conclusion. Further, we have recognized that in cases such as
this, where "the requested information is . . . peculiarly
within the province of the person to whom the C.I.D. is
addressed, broad discovery demands may be permitted even when
The judge wrote: "At the hearing, both parties indicated
12
that Exxon has already complied with its obligations regarding a
similar demand for documents from the New York Attorney General.
In fact, as of December 5, 2016, Exxon had produced 1.4 million
pages of documents responsive to the New York Attorney General's
request."
26
such a demand 'imposes considerable expense and burden on the
investigated party.'" Bodimetric Profiles, supra.
The remainder of Exxon's challenge to the substance of the
C.I.D. concerns its assertion that the Attorney General issued
the C.I.D. solely as a pretext, "rendering the [C.I.D.] an
arbitrary and capricious exercise of executive power." Exxon
cites to cases from other contexts to suggest that our analysis
of the propriety of the C.I.D. must include an evaluation of the
reasonableness of the Attorney General's reasons for issuing it.
"There is no requirement that the Attorney General have probable
cause to believe that a violation of . . . c. 93A has occurred.
[She] need only have a belief that a person has engaged in or is
engaging in conduct declared by be unlawful by . . . c. 93A. In
these circumstances, the Attorney General must not act
arbitrarily or in excess of [her] statutory authority, but [s]he
need not be confident in the probable result of [her]
investigation." CUNA Mut. Ins. Soc'y, 380 Mass. at 542 n.5.
The judge determined that the Attorney General has "assayed
sufficient grounds -- her concerns about Exxon's possible
misrepresentations to Massachusetts consumers -- upon which to
issue the [C.I.D]." The Attorney General's belief that Exxon's
conduct may violate c. 93A is all that is required under G. L.
c. 93A, § 6 (1).
27
3. Disqualification of the Attorney General. Exxon also
seeks the disqualification of the entire office of the Attorney
General from this investigation. Exxon bases its request on
comments made by the Attorney General in March, 2016, at the
press conference where she announced the commencement of her
investigation into Exxon. The judge denied Exxon's request, and
we review the denial for an abuse of discretion. Commonwealth
v. Reynolds, 16 Mass. App. Ct. 662, 664 (1983).
At the press conference, titled "AGs United for Clean
Power," the Attorney General spoke about the basis for her
investigation. The relevant portion of her comments were as
follows:
"Part of the problem has been one of public
perception, and it appears, certainly, that certain
companies, certain industries, may not have told the whole
story, leading many to doubt whether climate change is real
and to misunderstand and misapprehend the catastrophic
nature of its impacts. Fossil fuel companies that deceived
investors and consumers about the dangers of climate change
should be, must be, held accountable. That's why I, too,
have joined in investigating the practices of Exxon . . . .
We can all see today the troubling disconnect between what
Exxon knew, what industry folks knew, and what the company
and industry chose to share with investors and with the
American public."
Exxon argues that these comments violated Mass. R. Prof. C.
3.6, as appearing in 471 Mass. 1430 (2015), which prohibits any
lawyer from making prejudicial statements to the public
concerning an ongoing investigation. Where a violation has
occurred, a judge may disqualify the violator. See Pisa v.
28
Commonwealth, 378 Mass. 724, 728-730 (1979). The judge
concluded that the Attorney General's comments contained no
"actionable bias," and instead were intended only to inform the
public of the basis for the investigation into Exxon. We
discern no abuse of discretion in the judge's conclusion. The
Attorney General is authorized to investigate what she believes
to be violations of c. 93A. G. L. c. 93A, § 6 (1). As an
elected official, it is reasonable that she routinely informs
her constituents of the nature of her investigations. See
Buckley v. Fitzsimmons, 509 U.S. 259, 278 (1993) (statements to
press by prosecutor serve vital public function); Commonwealth
v. Ellis, 429 Mass. 362, 372-373, 378 (1999) (discussing
prosecutor's duty to zealously advocate within ethical limits).
4. Exxon's request for a stay. The day before filing its
request to modify or set aside the C.I.D., Exxon filed a
complaint for declaratory and injunctive relief in the United
States District Court for the Northern District of Texas
challenging the C.I.D. on constitutional grounds not raised in
this action.13 Exxon requested that the Superior Court judge
13The Federal action was transferred to the United States
District Court for the Southern District of New York, and on
March 29, 2018, the District Court dismissed Exxon's complaint
with prejudice due to Exxon's failure to state a claim and the
preclusive effect of the Superior Court decision in this matter.
See Exxon Mobil Corp. vs. Healey & another, U.S. Dist. Ct., No.
1:17-cv-02301 (S.D.N.Y. Mar. 29, 2017). Because Exxon may
29
stay this matter pending the resolution of the Federal suit.
The judge denied Exxon's request, and we review that denial for
an abuse of discretion. Soe v. Sex Offender Registry Bd., 466
Mass. 381, 392 (2013).
In denying Exxon's request, the judge reasoned that the
Superior Court is better equipped than a Federal court in Texas
to decide a matter pertaining to Massachusetts's primary
consumer protection law, G. L. c. 93A.14 Exxon argues that this
constitutes an abuse of discretion, and contends, somewhat
remarkably, that there "is good reason to question the premise"
that Massachusetts courts are more capable than out-of-State
courts to oversee cases arising under c. 93A. The Legislature
designated the Superior Court as the forum for bringing a
challenge to a C.I.D. issued under G. L. c. 93A, § 6. See G. L.
c. 93A, § 6 (7) ("[t]he motion may be filed in the superior
court of the county in which the person served resides or has
his usual place of business, or in Suffolk county"). Likewise,
the Legislature provided that civil actions under G. L. c. 93A,
§ 9 or 11, may be brought in the Superior Court, the Housing
appeal from the Federal decision, we do not treat as moot
Exxon's request to stay the Massachusetts proceedings.
14The judge also determined that "the interests of
substantial justice dictate that the matter be heard in
Massachusetts," citing G. L. c. 223A, § 5. Exxon has not argued
that it would be unfairly prejudiced by having to litigate in
Massachusetts, and thus has not moved to dismiss under the
doctrine of forum non conveniens.
30
Court, or the District Court, see G. L. c. 93A, §§ 9 (1), (3A),
11, with the Superior Court retaining the broadest grant of
jurisdiction over c. 93A claims.15 It should go without saying
that Massachusetts courts, which routinely hear c. 93A claims,
are better equipped than other courts in other jurisdictions to
oversee such cases.
Exxon's contention that the lower court erred in failing to
apply the "first-filed" rule is equally unavailing. The filing
of a complaint in Federal court one day before a State court
filing hardly triggers a mechanical application of the first-
filed rule. See, e.g., EMC Corp. v. Parallel Iron, LLC, 914 F.
Supp. 2d 125, 127 (D. Mass. 2012) ("Exceptions to the [first-
filed] rule are not rare. . . . [A court] has discretion to
give preference to a later-filed action when that action will
better serve the interests involved"); Bacardi Int'l Ltd. v. V.
Suarez & Co., 719 F.3d 1, 15 (1st Cir.), cert. denied, 134 S.
Ct. 640 (2013) (discouragement of forum-shopping is
consideration when ruling on motion to stay).
15Whereas the Housing Court's jurisdiction over c. 93A
claims is restricted to those involving housing matters, see
G. L. c. 93A, § 9 (1); G. L. c. 185C, § 3, and the District
Court has jurisdiction over actions "for money damages only,"
G. L. c. 93A, §§ 9 (3A), 11, the Superior Court is not so
limited, and may hear any case under c. 93A "for damages and
such equitable relief, including an injunction, as the court
deems to be necessary and proper." G. L. c. 93A, § 9 (1).
31
Finally, where there is only a partial overlap in the
subject matter of two actions, a judge has considerable
discretion when deciding whether to grant a stay. See In re
Telebrands Corp., 824 F.3d 982, 984 (Fed. Cir. 2016); TPM
Holdings, Inc. v. Intra-Gold Indus., Inc., 91 F.3d 1, 4 (1st
Cir. 1996) ("where the overlap between two suits is less than
complete, the judgment is made case by case"). Exxon
acknowledges that the Federal action "challenges the
investigation on constitutional grounds not raised in this
action" (emphasis added).16 The judge did not abuse her
discretion in denying the stay. Compare Provanzano v. Parker,
796 F. Supp. 2d 247, 257 (D. Mass. 2011) (declining to stay
because first-filed action was in anticipation of lawsuit in
question, claims in cases were not identical, current action had
proceeded further in court, and case involved application of
Massachusetts statute).
5. Conclusion. We affirm the order denying Exxon's motion
to modify or set aside the C.I.D., Exxon's request to disqualify
the Attorney General, and Exxon's motion to stay these
proceedings. We further affirm the order granting the Attorney
16Exxon's Federal complaint for declaratory and injunctive
relief is based on violations of Exxon's rights under the First,
Fourth, and Fourteenth Amendments to the United States
Constitution, as well as an alleged violation of the dormant
commerce clause and an abuse of process claim.
32
General's cross motion to compel Exxon's compliance with the
C.I.D.
Judgment affirmed.