In re Exxon Mobil Corp. Derivative Litigation

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Exxon Mobil Corporation and individual defendants (Exxon) moved to dismiss a shareholder derivative action in which the plaintiffs alleged misconduct related to Exxon’s use of and statements regarding proxy costs of carbon or greenhouse gas costs—including their use in the company’s asset impairment analyses and proved reserves estimates—as well as assertions that the company’s assets would be stranded due to governmental climate change policies. Exxon argued that the case should be dismissed because the company’s independent directors had determined in good faith after a reasonable inquiry that the shareholder derivative lawsuit was not in Exxon’s best interests. Exxon further argued that additional theories of wrongdoing raised in the plaintiffs’ recently filed consolidated complaint were procedurally improper because the plaintiffs had never asked Exxon’s board to investigate the allegations. Exxon said the plaintiffs had added the new theories—which included allegations of misrepresentation of the environmental benefits of the company’s products and “greenwashing campaigns” about the company’s steps to mitigate climate change—in reliance on theories in an action filed by the Massachusetts Attorney General in October 2019 and after a New York court “discredited” the plaintiffs’ core allegations in a December 2019 decision dismissing the New York Attorney General’s fraud action against Exxon Mobil Corporation.

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