A federal judge in Texas on Monday dismissed a controversial lawsuit filed by Exxon Mobil Corp against activist shareholder Arjuna Capital over a climate proposal, ruling that the investor’s promise not to file a similar resolution in the future made the issue moot.
“Arjuna has dismissed any issue or controversy between the parties here, and Exxon’s claim is moot and should be dismissed without prejudice,” U.S. District Judge Mark Pittman for the Northern District of Texas wrote in his ruling after a hearing on Monday.
Exxon had sued Arjuna Capital and another shareholder, Follow This, in January to prevent them from presenting a proposal at the oil major’s annual shareholder meeting on May 29. Investors called on the company to accelerate the pace of reducing carbon dioxide emissions.
Critics of the lawsuit argued that it would have a chilling effect on future shareholder petitions.
The two activist shareholders withdrew the proposal after Exxon filed a lawsuit. However, the oil major continued to file the lawsuit, claiming that investors could make a similar proposal at a future shareholder meeting.
Pittman had originally allowed the lawsuit against Arjuna to proceed, echoing the oil major’s arguments, while dropping the lawsuit against Netherlands-based Follow This over jurisdictional issues.
But the judge said on Monday there was no longer at stake in the case after Arjuna gave an “unconditional and irrevocable” undertaking to ensure Exxon would not make a similar offer again.
“Arjuna was caught between a rock and a hard place,” Pittman wrote in his ruling Monday. “Arjuna is a wealth management firm with offices in North Carolina and Massachusetts. Exxon is one of the largest multinational conglomerates on the planet.”
Exxon’s claims against Arjuna stem from SEC rules that allow companies to exclude shareholder resolutions that deal with a matter related to the company’s normal business operations, or Very similar to proposals made in the past five years.
“The SEC is behind the ball in this case,” Pittman wrote in the ruling. “But the court cannot advise Exxon on its rights without a live case or controversy to trigger jurisdiction.”
When contacted by CNBC, Arjuna declined to comment.
“Web maven. Infuriatingly humble beer geek. Bacon fanatic. Typical creator. Music expert.”
More Stories
An East Coast port strike looms for the first time since 1977. Here’s what to know.
DJT Stock: The Trump Media co-founder offloaded nearly $100 million worth of stock
OpenAI’s Sam Altman told employees he didn’t take a “huge equity stake.”