A federal judge in Texas on Monday dismissed a lawsuit filed by oil giant Exxon Mobil against activist investor Arjuna Capital over a shareholder proposal calling for the company to reduce greenhouse gas emissions.
Judge Mark T. Pittman of the U.S. District Court for the Northern District of Texas ruled that Exxon's arguments were moot because Arjuna had withdrawn its proposal and pledged not to submit a similar proposal.
“The trend toward shareholder activism in this country is not going away,” Pittman wrote, but added that “absent ongoing litigation or controversy that would invoke jurisdiction, the Court cannot recommend rights to Exxon.”
Exxon filed suit in January against Arjuna and another investor, Follow This, seeking to block a nonbinding resolution from being put to a shareholder vote. According to Exxon's complaint, Arjuna had filed a resolution a month earlier calling on Exxon to accelerate its carbon-emissions reduction plans and “develop new plans, goals and timelines,” which Follow This then agreed to, the complaint said.
Exxon said in its lawsuit that the proposal was “not intended to improve ExxonMobil's economic performance or create shareholder value.”
“Defendants' overarching objective is to force ExxonMobil to alter the nature of its ordinary business or to go out of business entirely,” the company said.
Judge Pittman removed Netherlands-based Follow This from the case in May but allowed the case against Arjuna to continue.
Arjuna withdrew its proposal and moved to dismiss the case, but the judge rejected the motion, saying that “the withdrawal of the proposal does not preclude similar conduct in the future.” Arjuna then promised not to make a similar proposal, saying that its pledge “precludes even the remotest possibility of any new proposals” related to Exxon's carbon emissions.
Pittman's ruling came following a hearing held Monday to determine whether Arjuna's promises made Exxon's lawsuit moot.
