Exxon Mobil Corp. v. Arjuna Capital, LLC

The federal district court for the Northern District of Texas ruled that Exxon Mobil Corporation’s lawsuit asking the court to declare that it could exclude a shareholder proposal about climate change from its proxy statement was made moot by a letter in which the shareholder “unconditionally and irrevocably covenants to refrain henceforth from submitting any proposal for consideration by Exxon shareholders relating to GHG or climate change.” The court—which had found that an earlier letter from the shareholder did not make “absolutely clear” that the shareholder’s conduct would not recur—found that Exxon’s concerns that the shareholder would work “behind the scenes” with other activist investors to submit similar proposals was “conjectural” or “hypothetical” even if “plausible.” Because of the shareholder’s covenant, the court found that any ruling on Exxon’s claim would be advisory and therefore improper. The court therefore dismissed the case without prejudice.

Exxon argued that Arjuna's commitment still did not moot the case.

Five days after the court’s ruling denying Arjuna Capital's motion to dismiss, Arjuna Capital sent a letter to Exxon that included a “broader stipulation” that Arjuna “unconditionally and irrevocably covenants to refrain henceforth from submitting any proposal for consideration by Exxon shareholders relating to GHG or climate change.”