D.C. Attorney General’s Attack on Energy Companies Teeming with Special Interests

Washington D.C. Attorney General Karl Racine just announced his intention to open an investigation and “very likely” pursue litigation against several energy companies in a Frankenstein’s monster of a lawsuit. Speaking at an event hosted by the Sierra Club last week, Racine encouraged the audience to “look out for developments in the fall,” according to reporting by E&E News.

According to Racine, the investigation will not only scrutinize investor disclosures related to climate change, similar to New York’s , but will also include a “broader climate change aspect,” comparable to against multiple energy companies. This multi-pronged approach suggests that Racine has predetermined that energy producers must be guilty of something, and he plans to hire outside attorneys to help him dig around until he figures out what exactly he wants to allege they are guilty of.

But Racine’s tactics have come under fire in recent months and have revealed a desire to avoid transparency and a willingness to welcome outside donors and undue influence into the Office of the Attorney General (OAG).

DC’s unprecedented bid for outside counsel for climate litigation

In February, 2019 the OAG released a proposal soliciting outside counsel on a contingency basis “for legal services in support of OAG’s investigation and potential litigation against ExxonMobil Corporation…in connection with Exxon’s statements or omissions about the effects of its fossil fuel products on climate change.” According to the proposal, the hired outside counsel will only receive monetary compensation for their work if they negotiate a settlement or are victorious in court.

However, the arrangement also allows for hired counsel to seek outside funding, opening the case up to a phenomenon called “litigation investment,” which allows investors to pay the upfront costs of litigation in exchange for a healthy cut of the eventual settlement or award. Typically, this is used to help a plaintiff without means to pay their medical bills or immediate legal costs.

According to Andrew Grossman, an attorney and adjunct scholar at the Cato Institute, this phenomenon was blocked by most states and bar associations until recently, and is “unheard-of” for financing law enforcement action by government officials.


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