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- Exxon Mobil Corp. v. Arjuna Capital, LLC
Litigation
Exxon Mobil Corp. v. Arjuna Capital, LLC
About this case
Documents
Filing Date
Type
Action Taken
Document
Summary
06/17/2024
Decision
Action dismissed without prejudice.
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.
06/10/2024
Reply
Reply brief filed by Exxon Mobil Corporation addressing mootness following May 27, 2024 letter.
–
05/31/2024
Brief
Brief filed by Exxon regarding mootness.
Exxon argued that Arjuna's commitment still did not moot the case.
05/27/2024
Notice
Notice filed by Arjuna Capital regarding letter to Exxon.
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.”
05/22/2024
Decision
Follow This motion to dismiss granted and Arjuna motion to dismiss denied.
The federal district court for the Northern District of Texas allowed Exxon Mobil Corporation (Exxon) to proceed with its lawsuit requesting a declaratory judgment that Exxon may exclude from its proxy statement a shareholder proposal supporting accelerated reduction of greenhouse gas emissions. The court concluded that the defendant shareholders’ withdrawal of the proposal did not moot the case because the defendants did not show that it was “absolutely clear” that the challenged conduct would not recur. Although the court rejected Exxon’s contention that it had personal jurisdiction over the two shareholders under the Securities Exchange Act of 1934, the court concluded it did have personal jurisdiction over one of the shareholders (Arjuna Capital) under Texas’s “long-arm” statute but not over the other defendant (Follow This).
02/05/2024
Status Report
Status update filed by Exxon.
On February 2, 2024, Reuters <a href="https://www.reuters.com/sustainability/climate-energy/exxon-says-investors-withdrawing-climate-proposal-annual-shareholder-meeting-2024-02-02/">reported</a> that the shareholders had withdrawn their proposal. Exxon then filed a status report stating that although the shareholders had said they would not file the proposal in future years, the withdrawal did not provide Exxon complete relief. Exxon said it would continue with the suit because a ruling from the court was needed on whether the SECs rules’ “ordinary business” or “resubmission” exclusions would allow Exxon to exclude the proposal from its proxy statement.
01/21/2024
Complaint
Complaint filed.
Exxon Mobil Corporation (Exxon) filed a complaint in the federal district court for the Northern District of Texas seeking a declaratory judgment that it may exclude a shareholder proposal supporting accelerated reduction of Exxon’s greenhouse gas emissions from the company’s proxy statement and not present the proposal for a shareholder vote. Exxon alleged that the “overarching objective” of the shareholders—which the complaint described as an “activist wealth management firm” and an organization that solicits funds to buy enough shares in energy companies to submit shareholder proposals—was “to force [Exxon] to change the nature of its ordinary business or to go out of business entirely.” Exxon alleged that almost 90% of voting shareholders rejected a similar proposal in 2023 and contended that the defendants “should not be permitted to continue to misuse the shareholder proposal rules.” The complaint alleged that the shareholder proposal and proxy voting process was “flawed” and that current guidance from Securities and Exchange Commission staff about how to apply Rule 14a-8, which governs shareholder proposals, was at odds with the rule. Exxon said the rule’s “plain language” supported exclusion of the proposal. On February 2, 2024, Reuters <a href="https://www.reuters.com/sustainability/climate-energy/exxon-says-investors-withdrawing-climate-proposal-annual-shareholder-meeting-2024-02-02/">reported</a> that the shareholders had withdrawn their proposal. Exxon then filed a status report stating that although the shareholders had said they would not file the proposal in future years, the withdrawal did not provide Exxon complete relief. Exxon said it would continue with the suit because a ruling from the court was needed on whether the SECs rules’ “ordinary business” or “resubmission” exclusions would allow Exxon to exclude the proposal from its proxy statement.
Summary
Action seeking a declaratory judgment that Exxon Mobil Corporation may exclude a shareholder proposal regarding climate change from its proxy statement.