Ramirez v. Exxon Mobil Corp.

In a securities fraud class action against Exxon Mobil Corporation (Exxon) and Exxon officers, the federal district court for the Northern District of Texas denied a motion by the lead plaintiff to certify a class to the extent the motion sought to certify claims regarding the defendants’ alleged misstatements about carbon proxy costs. The court determined that the defendants sufficiently rebutted the presumption of reliance on the alleged misstatements with an expert’s analysis that found no statistically significant negative price reactions to alleged corrective disclosures that included a November 2015 article about the New York Attorney General’s investigation into whether Exxon disseminated inaccurate information about climate change, a January 2016 article about a California Attorney General investigation about Exxon communications about business risks from climate change, and a 2016 op-ed by Senators Elizabeth Warren and Sheldon Whitehouse entitled “Big Oil’s Master Class in Rigging the System.” The court said the expert’s analysis not only rebutted the presumption of reliance by showing a lack of price impact but also supported the defendants’ assertation “that the market did not care about the state attorneys general’s investigations into whether Exxon Mobil misled investors about its internal use of carbon proxy costs.” The court also found unpersuasive the plaintiff’s theory characterizing Exxon’s 2016 third quarter earnings release (which did have a negative price impact) as partially correcting previous public statements about carbon proxy costs. The court did certify a class with respect to the plaintiff’s remaining claims related to the defendants’ alleged failures to properly account for and disclose losses related to certain bitumen operations in Canada and dry gas operations in the Rocky Mountains.

In a brief order, the federal district court for the Northern District of Texas denied a motion by Exxon Mobil Corporation and former Exxon officials (Exxon) to reconsider a 2018 decision denying Exxon’s motion to dismiss a securities fraud class action based on allegations of materially false and misleading statements concerning climate change risks. Exxon argued that its victory in 2019 in an enforcement action brought by the New York Attorney General required dismissal of the class action. The court did not include the reasoning for its decision in the order.

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