Catalyst Summer 2016

With Tobacco or Climate Denial, There’s No Constitutional Right to Commit Fraud

Interview with Sharon Eubanks

Sharon Eubanks is a nationally recognized attorney at the Wheeling, West Virginia-based law firm of Bordas & Bordas. She served for 22 years as an attorney in the US Justice Department and, from 2000 to 2005, was lead counsel on behalf of the United States in the federal tobacco litigation United States v. Philip Morris USA, et al.
Photo: © The Washington Post/Getty Images

Since publication of the Union of Concerned Scientists’ report The Climate Deception Dossiers, the attorneys general of several US states have launched investigations to determine whether ExxonMobil defrauded its shareholders and the public about the climate impacts of its products. To learn more about the case and potential parallels with the government’s prosecution of tobacco companies, Catalyst interviewed Sharon Eubanks, lead US counsel in the government’s racketeering case against the tobacco industry.

The government’s decision to prosecute the tobacco companies ultimately proved to be quite a success.

Sharon Eubanks: Yes. It was the largest civil racketeering case ever filed. We alleged in that case 50 years of fraud by the tobacco industry, which ultimately was proven. The court issued a lengthy decision in the government’s favor 10 years ago after a trial that lasted nine months.


Based on that experience, what similarities do you see with the current investigations into ExxonMobil?

Sharon EubanksOne thing that stands out is the evidence that has come to light that climate denial front groups are disseminating the fraudulent message that it is an open scientific question whether humans are changing the climate. In the tobacco litigation, the companies claimed that it had not been proven that smoking caused ill health and, therefore, since it wasn’t proven, cigarettes were okay to smoke—when, in fact, the companies knew from their own internal research that tobacco was deadly. So, that aspect is very similar based on what we know so far. It appears from the documents that UCS and others have released that, as early as the 1970s, Exxon knew of humans’ role in climate change and they initially said they were going to do something about it in the way of research. But then the company seems to have decided instead to finance groups to sow doubt.


Did the use of front groups feature prominently in the tobacco case?

Sharon EubanksOh, yes. They were part of the conspiracy claim under the racketeering statute. The key defendants in the case all sold cigarettes in the United States. However, there were also a couple groups that coordinated with them—industry groups—and these groups were often run by the tobacco companies’ lawyers. I don’t yet know to what extent the fossil fuel industry has used or is using lawyers to assist in carrying out the mission to sow doubt, but I do know that lawyers played a significant role in manufacturing doubt about the health consequences of smoking and furthering fraud in the federal tobacco case. The trial judge in the tobacco case found that the industry lawyers played “an absolutely central role” in creating and keeping the racketeering enterprise alive and in implementing its fraudulent scheme.


Recently, ExxonMobil and its surrogates have complained that the investigations are infringing on the company’s First Amendment right to free speech. Is that something tobacco companies claimed as well?

Sharon EubanksYes. The tobacco companies claimed that their free-speech rights were protected when they lobbied Congress, even when they provided fraudulent and untrue statements. But we countered by successfully making the argument that there isn’t a constitutional right to commit fraud. In other words, fraudulent speech is not protected. Now, the fossil fuel industry is saying, “You’re pointing a finger at us for saying things that you claim are untrue, but we had a right to make those statements whether or not they were true.” In a legal sense you probably don’t have a right if you are doing that in order to secure certain things. For example, there certainly is no right to lie in connection with information sought in an investigation. RICO [the Racketeer Influenced and Corrupt Organizations Act] is a complex statute but one thing is for sure: you don’t have a constitutional right to lie. Yet, if you consider their invocation of the First Amendment, that’s essentially what they’re saying. The other important point about this is that an investigation by an entity such as a state attorney general is not the same as a prosecution. I can’t say that loudly enough. So in this case, when the fossil fuel companies say that a state’s investigation represents a violation of their First Amendment rights, it’s ridiculous. In our system, attorneys for the state need to determine whether there has been a violation and whether to move forward. That is how our system works. So when the companies cry “this investigation is a violation of the First Amendment”— no, it is not.


What other pertinent lessons do you draw from the tobacco case?

Sharon Eubanks: First, it takes a long time for change to come about. Think of this for a moment: Closing arguments were made in the tobacco litigation in 2005 in a case that was filed in 1999—and some aspects of the case are still going on today in 2016! Importantly though, in 2009, President Obama signed a bill giving the FDA [Food and Drug Administration] power to regulate tobacco. I think that the litigation was part of what led to the regulation of tobacco we have today. Remember that the FDA had previously asserted its authority to regulate tobacco but was found by the Supreme Court not to have that authority because Congress hadn’t given it in statute. So, in 2009, that was corrected.


Do you have advice for those who want to stop major fossil fuel companies from underwriting climate misinformation?

Sharon Eubanks: Remember that they’ve got the entire playbook from the tobacco litigation so they know everything we’ve done in the past. With climate change and the fossil fuel industry, a lot is already happening as organizations like UCS educate the public by speaking out about what the industry has done. That’s great because public opinion carries a great deal of weight in the long run in getting things done. So, I would say: continue to get the information out there about climate change and about the industry’s obfuscation. Get support for your position by letting people look at the facts and the evidence for themselves. But, based on the tobacco case, my advice would also be to take these companies to court. Period. It is the only thing that can really level the playing field. If you can make your arguments before a court, you will have a neutral fact finder—then you are far better off. It’s no different from the civil rights movement where people took human rights issues to court when they couldn’t get justice any other way. Court, or lawsuits, should not necessarily be the first resort, but shouldn’t be considered the last resort either.