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Michael Hiltzik: Oil industry subpoenas aim to harass and intimidate, consumer group says

Michael Hiltzik, Los Angeles Times on

Published in Business News

That's the approach Consumer Watchdog has taken thus far. The organization was founded in 1985 as the Foundation for Taxpayer and Consumer Rights by consumer activist Harvey Rosenfield, who drafted Proposition 103, an insurance reform measure passed by California voters in 1988.

Its most important current campaign aims to reform the state's overly restrictive limit on damage awards in malpractice cases, which it's hoping to place on the November state ballot, but allegations of price fixing by the oil industry have been on its agenda for years.

Consumer Watchdog responded in September to the oil companies' July 2019 subpoena by submitting 43 pages of press releases, blog posts, news articles and videos, most of which already had appeared on its website. But it rejected demands for what it called confidential or proprietary information or any "privileged information, including, without limitation, information protected by the attorney-client privilege, attorney work product privilege, and the 1st Amendment."

"We have nothing to hide, other than our sources," Flanagan told me.

Sletten dismissed those objections in a letter to Flanagan on Sept. 24. Sletten asserted that in part because Consumer Watchdog's "misguided advocacy was a catalyst for plaintiffs' unfounded and unsupported conspiracy claims," it's "far from independent" and not entitled to free speech protections traditionally enjoyed by journalists.

"What Chevron and Exxon have failed to explain is why they need Consumer Watchdog's confidential sources and compelled testimony to prove their case that they did nothing wrong," Flanagan says. "They can do that without harassing Consumer Watchdog by bringing in their own experts to prove their case."

Whether the oil companies will follow through on their subpoenas by asking a judge to compel Consumer Watchdog's compliance isn't clear. There are risks to both sides in jumping the matter up to that level.

The 1st Amendment argument, in the judgment of UCLA's Marcus, is a "strong argument" for the consumer group. "They say, 'We're an advocacy organization and our work requires us to have people talk to us and give us information, and if they knew the oil companies could get it simply by issuing a subpoena, we wouldn't be able to do our work.' That's probably enough to shift the burden to the oil companies to show why their request wouldn't infringe on (the subpoena targets') rights."

 

Moreover, judges generally are unhappy with subpoenas that "seem to have an air of harassment about them," Marcus says. "There might be some risk for oil companies in really pursuing this."

On the other hand, litigation often unfolds as a war of attrition, and the oil industry has a lot more money to spend than Consumer Watchdog, which has an annual budget of about $3 million and lots on its plate.

"They could walk away, but they're Chevron and Exxon," Flanagan says. "They're not going to walk away."

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