A federal judge in Texas has dismissed Exxon Mobil’s bombshell defamation lawsuit against environmental groups that it had accused of trying to sabotage its recycling business in collusion with an Australian mining magnate.
But the judge allowed a parallel case against California’s attorney general, Rob Bonta, to proceed.
The dispute began in the fall of 2024 when Mr. Bonta filed a lawsuit against Exxon after a two-year investigation. He said his office had concluded the company had engaged in a “decades-long campaign of deception” that helped create a global plastics-pollution crisis.
Mr. Bonta’s lawsuit, filed in a state court in California, said the company had misled the public in order to profit from its production of polymers, which are essential ingredients in single-use plastics. The suit took particular issue with Exxon’s statements about “advanced recycling,” a chemical process that differs from traditional recycling and is used to make fuels and other substances.
The attorney general said Exxon, which is based in Spring, Texas, should create a pollution abatement fund and refrain from “any further false or misleading statements about plastics recycling.” Four California nonprofits filed a parallel lawsuit making the same claims.
Exxon shot back that California officials were seeking to blame the industry for their own decades-long failure to run an effective recycling program. Three months later, it responded with its countersuit.
The company filed the suit in the U.S. District Court for the Eastern District of Texas, near its recycling facilities, claiming that Mr. Bonta and the nonprofits were onetime proponents of recycling who had done an “about-face” at the behest of Andrew Forrest, an Australian mining magnate. The suit said that Mr. Forrest, who is outspoken about the need to reduce fossil-fuel use and is the founder of Fortescue Metals Group, was a business competitor with a grudge against Exxon.
The suit named Mr. Bonta in his personal capacity, as well as a little-known Australian nonprofit that Mr. Forrest had funded, the Intergenerational Environment Justice Fund. It alleged a conspiracy in which the Australian fund hired an American law firm to engage in “political activities,” including recruiting the other nonprofit groups to be plaintiffs in the plastics-recycling lawsuit. Those “proxies” signed up “as nothing but local placeholders, acting for the foreign business interests competing in U.S. courts rather than the marketplace,” the complaint said.
Judge Michael J. Truncale held a hearing in Beaumont, Texas, in August. In his decision, issued on Feb. 13, he found that the nonprofits had insufficient connection to Texas to continue the case.
In a statement, Mr. Forrest said he welcomed the court’s dismissal of what he called an “extreme and baseless attack.” He said the cases by the nonprofits and Mr. Bonta against Exxon in California would bring “much needed transparency” to questions about recycling as plastic waste “continues to choke our landfills, rivers and oceans.” He called Exxon’s countersuit “an attempt to silence scrutiny rather than answer it.”
Baykeeper, an environmental group in San Francisco dismissed from Exxon’s countersuit, said it would continue to pursue its California suit. “We will continue to speak freely about our litigation and hold Exxon accountable, as protected by the First Amendment and California law,” said its executive director, Sejal Choksi-Chugh.
Representatives for the Sierra Club, based in Oakland, and Surfrider Foundation, in San Clemente, also named in Exxon’s countersuit, said they were pleased by the dismissal. Another group, Heal the Bay, in Santa Monica, declined to comment. The Australian fund did not respond to requests for comment.
The decision centered on the legal ramifications of online speech. Many of the statements by the nonprofits were relatively vague and had no particular link to Texas, Judge Truncale found.
Mr. Bonta had claimed immunity from lawsuits because of his position as a public official. Judge Truncale went through a list of Mr. Bonta’s statements, including media interviews and a campaign fund-raising email.
The campaign email, for example, was “not within Bonta’s scope of employment,” leaving him unable to claim official immunity, the judge said.
Ashkhen Kazaryan, a senior legal fellow at the Future of Free Speech, a think tank at Vanderbilt University, said Judge Truncale’s decision raised alarm bells. By holding that Mr. Bonta had lost immunity when one of his statements appeared in a campaign email, the court created a template that could be used against other officials, she said. The line between speech that is part of one’s official duties and speech in the context of a political campaign “will be very difficult to draw consistently in the modern media environment,” she said.
In a statement, Exxon called the California lawsuits “a campaign of lies designed to derail our advanced recycling business” and said it was expanding its recycling operations. “We refuse to let others attack our reputation and technology for their financial and political gain,” said Liza Steger, a spokeswoman for the company.
Mr. Bonta’s office has filed an appeal to the U.S. Court of Appeals for the Fifth Circuit. A spokesperson said the attorney general looked forward to litigating the case.
Karen Zraick covers legal affairs for the Climate desk and the courtroom clashes playing out over climate and environmental policy.
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