Peddling Ignorance: A New Falsity Standard for Scientific Knowledge Fraud Cases

Abstract

Attorneys general from New York, Massachusetts, and several other states are investigating whether Exxon Mobil Corp. misled investors and the public about climate change over the past four decades. The allegations against the oil company closely resemble schemes carried out by the tobacco, asbestos, chlorofluorocarbon, and leaded gasoline industries, among others. The scheme works like this: there is a product that is both profitable and destructive, and the companies selling it tell the public “the science is unsettled” when in fact the science is clear enough to know it poses a danger and greater regulation is needed.

Distortions like these may, if all the elements are met, constitute fraud. But plaintiffs in fraud cases of this kind, where the alleged misrepresentation pertains to scientific knowledge, face far greater obstacles to proving the falsity element than typical plaintiffs. This is because scientific knowledge cannot generally be labeled unequivocally “true” or “false,” and there are many widely held prejudices and misconceptions about science that make it easier to get away with lying about it. Accordingly, the scale is tipped heavily in favor of industry defendants. Using the ExxonMobil investigation as a case study, this Article proposes a new falsity standard to level the playing field in scientific knowledge fraud cases.

Keywords: Climate Change, Law and Science, Fraud, Misrepresentation, Scientific Knowledge, Environmental Law, Torts

JEL Classification: K13, K32