ExxonMobil Wins Complete Defense Verdict in Rare Securities Class Action Jury Trial

Paul, Weiss won a resounding trial victory on behalf of ExxonMobil and three of its former executives, defeating a $3 billion securities fraud case in federal district court in the Northern District of Texas. Following a two-and-a-half-week trial and after less than four hours’ deliberation, the jury returned a complete defense verdict. The verdict represents a historic and rare trial victory in a securities fraud class action.

A Pennsylvania pension fund filed suit in 2016, alleging that ExxonMobil and the former executives made false and misleading statements about the company’s accounting for the costs of climate change, the value of its Rocky Mountain dry gas assets, and the quantity of proved reserves at its Kearl Oil Sands Project in Canada.

In 2023, Paul, Weiss significantly narrowed the case at the class certification stage when District Judge Ed Kinkeade held that the defendants had proven the absence of any price impact for all but one of the plaintiff’s seven claimed corrective disclosures. Finding that none of the alleged misrepresentations about ExxonMobil’s climate change accounting had any impact on ExxonMobil’s stock price, Judge Kinkeade refused to certify a class concerning these alleged misstatements. The court certified a significantly narrowed class based on the plaintiff’s remaining allegations that ExxonMobil made false and misleading statements in its 2015 Form 10-K disclosure about the profitability of Kearl and its volume of proved reserves, and about the value of its Rocky Mountain dry gas assets.

Although securities class action trials are exceedingly rare and the stakes, both financial and reputational, were high, the defendants were determined to clear their names. After the court denied summary judgment, the defendants elected to go to trial.

At trial, Paul, Weiss and co-counsel presented compelling testimony from more than a dozen witnesses, seamlessly weaving the winning narrative. Witness after witness confirmed that the alleged misstatements were, in fact, genuinely held conclusions based on careful and well-documented work performed by dozens of ExxonMobil employees with many decades of combined experience. The testimony affirmed that ExxonMobil’s executives created a corporate culture of diligence and integrity and did not pressure anyone to achieve an accounting result.

The Paul, Weiss team included litigation partners Dan Toal, Ted Wells, Audra Soloway, Paul Brachman, Daniel Kramer and Matthew Stachel and counsel Sam Kleiner.