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Ramirez v. Exxon Mobil Corp.

United States District Court for the Northern District of Texas, Dallas Division

August 14, 2018, Decided; August 14, 2018, Filed

Civil Action No. 3:16-CV-3111-K

Opinion

 [*839]  MEMORANDUM OPINION AND ORDER

Before the Court are: (1) Defendants ExxonMobil Corporation, Rex W. Tillerson, Andrew P. Swiger, Jeffrey [**3]  J. Woodbury, and David S. Rosenthal's Motion to Dismiss the Consolidated Complaint (Doc. No. 46) and (2) Defendants ExxonMobil Corporation, Rex W. Tillerson, Andrew P. Swiger, Jeffrey J. Woodbury, and David S. Rosenthal's Motion to Strike the Declaration of Charlotte J. Wright, Ph.D., the Affirmation of John Oleske, and the Allegations of the Consolidated Complaint that Rely on Them (Doc. No. 48). The Court carefully considered the motions, the responses, the replies, the appendices, the relevant record, and the applicable law. Because it is inappropriate to consider expert opinions at the pleading stage of a case and the Court cannot consider conclusory allegations and unwarranted deductions, the Court GRANTS in part and DENIES in part Defendants' motion to strike. Lead Plaintiff sufficiently pleaded the alleged material misstatements and loss causation and met the heightened scienter standard, and therefore the Court DENIES in part the motion to dismiss as to Defendants ExxonMobil Corporation, Rex W. Tillerson, Andrew P. Swiger, and David S. Rosenthal. The Court GRANTS the motion to dismiss as to the securities fraud Section 10(b) and Rule 10b-5 claim for Defendant Jeffrey J. Woodbury but DENIES the motion [**4]  to dismiss as to the Section 20(a) claim for Defendant Jeffrey J. Woodbury.

I. Factual and Procedural Background

Lead Plaintiff Greater Pennsylvania Carpenters Pension Fund ("Pension Fund") filed this securities fraud case on behalf of all persons who purchased or otherwise acquired Defendant ExxonMobil Corporation's ("ExxonMobil") publicly traded common stock between March 31, 2014 and January 30, 2017, inclusive (the "Class Period"). Pension Fund bases their securities fraud claims on alleged material misrepresentations or omissions made during the Class Period by Defendants ExxonMobil, Chairman of the Board and Chief Executive Officer Rex W. Tillerson ("Tillerson"), Senior Vice President and Principal Financial Officer Andrew P. Swiger ("Swiger"), Vice President of Investor Relations and Secretary Jeffrey J. Woodbury ("Woodbury"), and Vice President, Controller and Principal Accounting Officer David S. Rosenthal ("Rosenthal") (collectively "ExxonMobil").

On March 31, 2014, the first day of the Class Period, ExxonMobil released its report "Energy and Carbon—Managing the Risks" ("MTR Report"), which addressed shareholder concerns regarding global energy demand and supply, climate change policy, and [**5]  carbon asset risk. The MTR Report explained that ExxonMobil considers possible government policy changes on climate-related controls, such as restricting emissions, and the effect of these policy  [*840]  changes on oil and gas exploration, development, production, transportation, and use of carbon-based fuels. The MTR Report stated that ExxonMobil takes these policies into consideration by factoring in a proxy cost of carbon when calculating any investment's or project's projected financial outlook. On March 31, 2014, ExxonMobil also released a report entitled "Energy and Climate," which stated ExxonMobil applied a proxy cost of approximately $60 per ton in 2030 and $80 per ton in 2040.

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334 F. Supp. 3d 832 *; 2018 U.S. Dist. LEXIS 136935 **; Fed. Sec. L. Rep. (CCH) P100,241; 2018 WL 3862083

PEDRO RAMIREZ, JR., Individually and on Behalf of All Others Similarly Situated, Plaintiff, v. EXXON MOBIL CORPORATION, REX W. TILLERSON, ANDREW P. SWIGER, JEFFREY J. WOODBURY, and DAVID S. ROSENTHAL, Defendants.

CORE TERMS

proxy, scienter, alleges, reserves, impairment, carbon, material misstatement, misleading, investors, Affirmation, strong inference, disclose, pleaded, argues, Bitumen, motion to dismiss, securities fraud, contends, costs, de-booked, Declaration, disclosures, Dry, credit rating, causation, climate, email, year-end, material misrepresentation, Offering