A judge has overturned Exxon Mobil’s lawsuit against activist investor Arjuna Capital over a shareholder proposal to reduce its greenhouse gas emissions.
Judge Mark T. Pittman of the US District Court for the Northern District of Texas ruled the case was moot.
This was because Arjuna had withdrawn its proposal and pledged not to submit similar proposals.
Judge Pittman wrote: “The trend of shareholder activism in this country isn’t going anywhere, adding that “the court cannot advise Exxon of its rights without a live case or controversy to trigger jurisdiction.”
In January, Exxon sued Arjuna and another investor, Follow This.
This was to prevent their nonbinding resolution from being put to a shareholder vote.
Arjuna filed a resolution a month earlier calling on Exxon to accelerate its plans to reduce carbon emission.
The company urged the oil giant to provide new targets and timetables.
Follow This later supported the proposal.
In its complaint, Exxon argued the proposal did not improve the company’s economic performance or create shareholder value.
Exxon claimed: “Defendants’ overarching objective is to force Exxon Mobil to change the nature of its ordinary business or to go out of business entirely.”
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In May, Judge Pittman dismissed Follow This, based in the Netherlands, from the lawsuit.
However, he allowed the case against Arjuna to proceed.
Arjuna then withdrew the proposal and sought dismissal of the lawsuit.
The judge initially denied this, citing that the withdrawal alone did not prevent similar future actions.
However, Arjuna subsequently promised not to submit similar proposals again.
It stressed this pledge eliminated any possibility of future proposals related to Exxon’s carbon emissions.
Following a hearing on Monday, June 17, Judge Pittman concluded Arjuna’s commitment rendered Exxon’s complaint moot, leading to the dismissal.
