OPINION:
In California, we’re witnessing a legal dispute that raises troubling issues of foreign intervention in domestic courts and third-party litigation funding. It should concern Americans.
California Attorney General Rob Bonta and a cohort of environmental nongovernmental organizations have launched what Exxon Mobil Corp. alleges is a “deliberate smear campaign” at the behest of a billionaire foreign investor. Their target: Exxon Mobil’s advanced plastics recycling technology, the energy company’s proposed solution to the global plastic waste problem.
That campaign isn’t merely a debate about environmental protection technology.
According to Exxon Mobil’s recent defamation countersuit, it’s a story of political ambition, foreign money and the exploitation of American courts on behalf of a foreign competitor whose business interests are directly threatened by Exxon Mobil’s technological advances.
At the heart of that operation is Australian mining mogul Andrew Forrest, whose company, Fortescue Metals Group, competes with Exxon Mobil in the low-carbon and energy transition space. Mr. Forrest allegedly bankrolled a group of U.S.-based environmental organizations, chief among them the Sierra Club, to launch a coordinated attack on Exxon Mobil’s advanced recycling operations through his obscure nonprofit, the Intergenerational Environment Justice Fund.
Here’s where it gets even more interesting: Mr. Forrest and the nonprofit didn’t file the lawsuit themselves.
Instead, they allegedly contracted with American lawyers to find “stand-in plaintiffs” — U.S. NGOs willing to be the figureheads for the litigation — while Mr. Forrest remained behind the curtain. As Exxon Mobil’s counterclaim notes, “the foreign interests did not want to sue in their own name.”
The result? A public nuisance lawsuit packed with inflammatory claims that Exxon Mobil’s technology is a “myth,” a “sham” and a “false promise.” Conspicuously, the lawsuit includes no publicly disclosed links to the industry competitor that allegedly bankrolls those claims in hopes of profiting from its competitor’s demise.
If true, the initial lawsuit was never about environmental protection but rather protecting market share. According to that allegation, Mr. Forrest’s goal is to inflict reputational damage on a commercial competitor by exploiting American courts, American NGOs and an American attorney general.
Exxon Mobil’s countersuit says the NGO entities are not neutral nonprofits operating in the interest of the public good or transparency but rather are proxy agents for foreign corporate interests.
Consider the Sierra Club. Long viewed by media and the public as a benevolent grassroots environmentalist group, it now stands accused of serving as a glorified laundering entity for foreign cash to undermine U.S. business interests.
Exxon Mobil’s lawsuit argues that Mr. Forrest’s dollars and agenda flowed through the Sierra Club and the other NGOs with the express purpose of damaging Exxon Mobil’s reputation and halting the adoption of its recycling technology.
If the allegations are true, Mr. Bonta is far from an innocent actor in this controversy.
Mr. Bonta’s office is accused of lending legitimacy to the initial attacks by launching the investigation and subsequent lawsuit and issuing public statements echoing the “false promise” narrative. Exxon Mobil said Mr. Bonta amplified the smear campaign for political gain, cozying up to powerful environmental groups with foreign cash behind them.
If true, that kind of state-sponsored defamation should trigger alarm, especially when it targets private-sector solutions to real environmental problems.
More fundamentally, the case underscores the urgent need to rein in third-party litigation funding.
Wealthy interests, foreign and domestic, increasingly use opaque financial arrangements to bankroll U.S. lawsuits that align with their agendas. When that occurs, it amounts to lawfare, not justice. If America’s courts become “open for business” to foreign interests, the American people and businesses will pay the price.
Fortunately, potential remedies for that problem exist. Namely, Congress and state legislatures can act swiftly to require greater transparency in lawsuit funding, especially when foreign entities are involved.
The public deserves to know who is behind high-profile litigation, and businesses deserve a legal system that isn’t for sale to the highest offshore bidder.
If Exxon Mobil’s allegations succeed in court, it will expose more than an environmental controversy. It will constitute one of the most brazen examples of foreign interference and political lawfare in U.S. courts. America cannot allow foreign money and the self-interest behind it to hijack our justice system. Those with the power to remedy the situation must act accordingly.
• Timothy Lee is senior vice president of legal and public affairs at the Center for Individual Freedom.
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