The conclusion of the big climate change securities fraud case against Irving-based Exxon Mobil in New York last week didn't go the way the New York Attorney General's Office hoped.

New York State Supreme Court Judge Barry Ostrager ruled the New York attorney general failed to prove energy giant Exxon Mobil misled its investors and blasted the case as "hyperbolic." In the words of one attorney, the case was a major victory for Exxon Mobil and its attorneys, Theodore Wells and his colleagues at Paul, Weiss, Rifkind, Wharton & Garrison.

Michael Biles, a partner in the securities and litigation group at King & Spalding in Austin who was not involved in the matter, said this was the first case in which a state attorney general used the Martin Act for alleged securities fraud violations against a publicly traded oil and gas company for climate change-related disclosures.

Biles noted that climate change has been a hot-button issue for some years now and that there's been a lot of talk from activist shareholders that oil and gas companies aren't being truthful with shareholders about how their products impact the environment. That's why this case has garnered so much media attention, especially in Texas and within the energy industry, he said.

"The judge ruled in the trial decision that this really isn't a climate change case at all, and he's right⁠—this is a securities disclosure case, and it concerned the really technical issue of how Exxon Mobil disclosed the future cost of carbon regulation," Biles said.

Ruling 'Shuts the Door' on Similar Futures Cases

What this case came down to is really myopic, Biles said.

"It's based on whether Exxon Mobil misled investors by having two estimates about the future costs of carbon: one, a higher estimate it disclosed to investors and used to predict the future demand for its products, and a second, undisclosed, but lower-cost estimate, which it called a 'greenhouse gas estimate' to analyze the profitability of potential oil and gas projects," Biles said.