Home Fossil Energy US judge dismisses ExxonMobil’s lawsuit against climate activist shareholder as moot
June 19, 2024,
by
Melisa Čavčić
A federal judge has ruled that the U.S.-headquartered energy heavyweight ExxonMobil no longer has a leg to stand on concerning its legal action against Arjuna Capital, a compatriot investment player, given the climate activist investor’s withdrawal of emission reduction-related shareholder proposal and reassurance it will not be put forward again.
Illustration; Source: ExxonMobil
The court saga over a shareholder proposal aiming to raise the greenhouse gas (GHG) emission reduction bar to wind down ExxoNMobil’s oil and gas business due to its alleged contributions to anthropogenic climate change began on January 22, 2024, when the U.S. giant sued Arjuna Capital and Follow This due to resubmission of the same elements contained in the proposals from 2022 and 2023.
The oil major’s legal action to exclude the proposal from its 2024 proxy statement due to its shareholders overwhelmingly rejecting the previous proposals, led Arjuna Capital and Follow This to withdraw their shareholder proposal on February 2, 2024. However, ExxonMobil asked the court to continue the suit on February 5.
In response to the request, Mark Pittman, U.S. District Judge for the Northern District of Texas, allowed the U.S. oil giant to move forward against Arjuna Capital on May 22 but dismissed the claim against Follow This, due to jurisdiction issues as the firm is based in the Netherlands.
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Posted: 27 days ago
On June 17, Pittman dismissed as moot ExxonMobil’s action against Arjuna Capital, based on the latter’s unconditional and irrevocable promise not to resubmit the challenged proposal. While emphasizing that his hands are “tied by the Constitution,” the judge wrote in the ruling: “Exxon can only sue Arjuna if there’s an ‘actual, ongoing controversy’ between them. While one remained despite Arjuna’s withdrawal of the 2024 proposal, none survives its current covenant.”
Commenting on the court’s decision, Darren Woods, ExxonMobil’s Chairman and CEO, highlighted: “Our lawsuit put a spotlight on the widespread abuse of the shareholder proxy submission process. In this particular case, the defendants withdrew their proxy submission twice in an effort to convince the court that our case against them was moot.
“Both attempts failed and, yesterday, the court went one step further and made it clear that Arjuna is bound by its commitment to not submit, or work with others to submit, similar proposals to ExxonMobil in the future.”
After the U.S. energy giant argued in court that Arjuna was untrustworthy and the scope of its promise was unclear, the climate activist investor explained that its promise forecloses even the remotest chance of another proposal regarding the oil major’s GHG emissions.
While explaining that “nothing says ‘dedication to the cause’ like dropping a proposal at the first hint of litigation,” Pittman underlined “Arjuna cannot be faulted for bowing out,