In This Story
Nobody won in a major climate change lawsuit.
A federal judge dismissed ExxonMobil’s controversial suit against an environmental activist shareholder group on Monday, arguing that there was no reason for the suit to even exist. Judge Mark Pittman of the northern district of Texas wrote in his order ending the case that “the exercise of judicial power is improper without a live case or controversy.”
In January, Exxon sued the Netherlands-based Follow This and U.S.-based Arjuna Capital over a shareholder proposal they were pursuing that would have forced the oil giant to account for the carbon emissions of its customers in addition to its own operations. Exxon didn’t want to do that, and it was tired of being asked to do so after multiple proposals along those lines had already failed in years prior.
Follow This and Arjuna recalled the proposal after being sued, but Exxon continued the suit anyway because it wanted to make sure the groups couldn’t submit the proposals again in the future. A number of Exxon investors, including California’s state pension fund and Noway’s sovereign wealth fund, expressed their discontent over what they saw as assaults on both the climate and shareholder rights, withholding support for board of director nominees at Exxon’s annual meeting. (They got elected anyway.)
Last month, Follow This won its motion to be removed from the case because it’s not an American group. And despite Exxon’s protestations that Follow This and Arjuna’s promise not to refile the proposal was untrustworthy, Pittman is letting Arjuna out the case as well.
“As Arjuna has eliminated any case or controversy between the Parties here, Exxon’s claim is MOOT and must be DISMISSED without prejudice,” he wrote this week.
In a statement provided to Quartz, Follow This claimed a partial victory: “The dismissal stalls Exxon’s attack on the rights of all shareholders to table proposals about emissions, the root cause of the climate crisis,” said founder Mark van Baal. “Exxon will not be able to reach its true goal with the lawsuit: circumventing the SEC to seek a court ruling to prevent any shareholder from filing emissions proposals in the future.”
Exxon also claimed a partial victory: “Our lawsuit put a spotlight on the widespread abuse of the shareholder proxy submission process,” CEO Darren Woods said in a statement. “In this particular case, the defendants withdrew their proxy submission twice in an effort to convince the court that our case against them was moot. Both attempts failed and, yesterday, the court went one step further and made it clear that Arjuna is bound by its commitment to not submit, or work with others to submit, similar proposals to ExxonMobil in the future.”