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ExxonMobil and Plan Trustees Win Motion to Dismiss ERISA Class Action

Paul, Weiss achieved a significant victory for Exxon Mobil Corporation and the trustees of its savings plan when the U.S. District Court for the Southern District of Texas granted their motion to dismiss a putative ERISA class action. The plaintiffs were current and former employees who were participants in and beneficiaries of ExxonMobil’s Savings Plan who invested in the company’s common stock during the period November 1, 2015 through October 28, 2016.

In an amended complaint filed in February 2017, the plaintiffs alleged that the trustees breached their duty of prudence based on purported non-public information showing that ExxonMobil common stock had become artificially inflated due to alleged fraud relating to certain climate-change issues. They further alleged that ExxonMobil breached its duty to monitor the trustees by not removing them and appointing new trustees.

In dismissing the complaint, the court ruled that the plaintiffs had failed to plausibly plead the existence of any non-public information on which the trustees should have acted or any alternative action that was so clearly beneficial that a prudent fiduciary would have been obliged to pursue. The court found that the plaintiffs had also failed to plead an underlying breach by the trustees and had failed to plead facts suggesting that ExxonMobil had a duty to appoint new trustees.

The Paul, Weiss team included litigation partners Ted Wells, Daniel Kramer, Daniel Toal and Gregory Laufer and counsel Jonathan Hurwitz.

March 30, 2018

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