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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
IN RE EXXON MOBIL CORPORATION
DERIVATIVE LITIGATION
Lead Case No. 3:19-cv-1067-K
This Document Relates to:
(Consolidated with Nos. 3:19-cv-1068-K;
3:19-cv-2267-K & 3:20-cv-1280-K)
ALL ACTIONS
(Consolidated Derivative Action)

INSTITUTIONAL PLAINTIFFS’ MOTION TO INTERVENE FOR THE LIMITED
PURPOSE OF OBJECTING TO DEFENDANTS’ REQUEST
FOR DISMISSAL WITH PREJUDICE

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TABLE OF CONTENTS
NOTICE OF MOTION AND MOTION ........................................................................................ 1
MEMORANDUM IN SUPPORT OF PROPOSED INTERVENORS’ MOTION ........................ 2
I.

PRELIMINARY STATEMENT ......................................................................................... 2

II.

STATEMENT OF FACTS .............................................................................................. 4

III.

LEGAL ARGUMENT ..................................................................................................... 6

A. The Institutional Plaintiffs Should Be Granted Intervention as of Right Pursuant to
FRCP Rule 24(a) .............................................................................................................. 7
B. The Institutional Plaintiffs Should Be Granted Permissive Intervention Pursuant to
FRCP Rule 24(b)............................................................................................................ 12
IV.

CONCLUSION .............................................................................................................. 15

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TABLE OF AUTHORITIES
Page(s)
Cases
Adams v. CLDN Tankers PTE Ltd.,
No. 2:18-CV-177, 2018 WL 7821399 (S.D. Tex. Sept. 25, 2018) ..........................................14
Allen-Pieroni v. Sw. Corr. LLC,
No. 3:13-CV-4089, 2017 WL 722200 (N.D. Tex. Jan. 26, 2017) ...........................................13
Brumfield v. Dodd,
749 F.3d 339 (5th Cir. 2014) .....................................................................................................8
Cal. State Teachers’ Ret. Sys. v. Alvarez,
179 A.3d 824 (Del. 2018), cert. denied, No. 17-1695, 2018 WL 3093913
(U.S. Oct. 1, 2018) .............................................................................................................10, 11
Ceres Gulf v. Cooper,
957 F.2d 1199 (5th Cir. 1992) .................................................................................................10
In re Chemed Corp. S’holder Deriv. Litig.,
Civil Action No. 13-1854, 2017 WL 1712530 (D. Del. Apr. 25, 2017) ....................................9
Deus v. Allstate Ins. Co.,
15 F.3d 506 (5th Cir. 1994) .....................................................................................................14
Edwards v. City of Houston,
37 F.3d 1097 (5th Cir. 1994) ...................................................................................................14
Edwards v. City of Houston,
78 F.3d 983 (5th Cir. 1996) ...............................................................................................11, 14
In re Enron Corp. Sec., Deriv. & “ERISA” Litig.,
229 F.R.D. 126 (S.D. Tex. 2005) .......................................................................................12, 13
In re Exxon Mobil Corporation Derivative Litigation,
Case No. 2:19-cv-16380-ES-SCM (filed August 6, 2019) ........................................................1
In re Intel Corp. S’holder Deriv. Litig.
No. 18-cv-01489, 2018 WL 5777138 (N.D. Cal. Nov. 2, 2018) .............................................12
Flying J. Inc. v. Van Hollen,
578 F.3d 569 (7th Cir. 2009) .....................................................................................................8
GNL Ridglea, LLC v. Guang Dong Hailea Group Co., Ltd.,
C.A. No. 4:18-cv-00286, 2018 WL 5259657 (N.D. Tex. Oct. 5, 2018) ....................................7

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Heaton v. Monogram Credit Card Bank of Ga.,
297 F.3d 416 (5th Cir. 2002) ...................................................................................................11
League of United Latin Am. Citizens, Council No. 4434 v. Clements,
884 F.2d 185 (5th Cir. 1989) ...................................................................................................12
Pomeroy, Inc. v. Border Opportunity Saver Systems, Inc.,
No. DR-10-CV-10, 2011 WL 13324298 (W.D. Tex. May 12, 2011) .......................................8
Ross v. Marshall,
426 F.3d 745 (5th Cir. 2005) ...................................................................................................11
Sierra Club v. Espy,
18 F.3d 1202 (5th Cir. 1994) ...............................................................................................8, 10
Smollar v. Potarazu,
C.A. No. 10287, 2016 WL 3910863 (Del. Ch. June 29, 2016) .................................................9
Stallworth v. Monsanto Co.,
558 F.2d 257 (5th Cir. 1977) .....................................................................................................8
Stallworth v. Monsanto Co.,
588 F.2d 257 (5th Cir. 1977) ...................................................................................................14
Texas v. U.S.,
805 F.3d 653 (5th Cir. 2015) .......................................................................................7, 8, 9, 11
Wal-Mart Stores, Inc. v. Texas Alcoholic Beverage Comm’n,
834 F.3d 562 (5th Cir. 2016) .............................................................................................7, 8, 9
Statutes, Rules, and Regulations
Delaware Court of Chancery
Rule 24 .......................................................................................................................................9
Federal Rules of Civil Procedure
Rule 23 ...............................................................................................................................2, 5, 6
Rule 24 ............................................................................................................................. passim

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NOTICE OF MOTION AND MOTION
TO: ALL PARTIES AND THEIR ATTORNEYS OF RECORD
PLEASE TAKE NOTICE that proposed intervenors Saratoga Advantage Trust Energy &
Basic Materials Portfolio (“Saratoga”) and the City of Birmingham Retirement and Relief System
(“Birmingham,” and together with Saratoga, the “Institutional Plaintiffs”), plaintiffs in the New
Jersey Action, 1 by and through their undersigned counsel, hereby move this Court for an order
allowing the Institutional Plaintiffs to intervene in the above-captioned consolidated shareholder
derivative action (the “Texas Action”) 2 pursuant to Rule 24 of the Federal Rules of Civil Procedure
(“FRCP”) for the sole purpose of filing a limited opposition to the request for dismissal with
prejudice filed by Nominal Defendant Exxon Mobil Corp. (“Exxon” or the “Company”) and the
Individual Defendants (together, “Defendants”) (Texas Action, Dkt. No. 46). 3
The Institutional Plaintiffs seek an order allowing them to intervene in this Texas Action,
as of right, pursuant to FRCP Rule 24(a), or permissively, pursuant to FRCP Rule 24(b), for the
sole purpose of filing a limited opposition to Defendants’ Motion to Dismiss and Brief in Support
(Texas Action, Dkt. No. 46, the “Motion to Dismiss”). The pending Motion to Dismiss will affect
the Institutional Plaintiffs’ claims in their shareholder derivative action, which is currently pending
1

The “New Jersey Action” refers to the proposed intervenors’ consolidated shareholder
derivative action that is currently pending before the Honorable Judge Esther Salas in the United
States District Court for the District of New Jersey, captioned: In re Exxon Mobil Corporation
Derivative Litigation, Case No. 2:19-cv-16380-ES-SCM (filed August 6, 2019).
2

The “Texas Action” refers to this consolidated derivative action, including Case Nos. 3:19cv-1067-K, 3:19-cv-1068-K, 3:19-cv-2267-K, and 3:20-cv-1280-K. The “Texas Plaintiffs” refer
collectively to the plaintiffs in the Texas Action.
3

Individual Defendants refers to: Darren W. Woods, Andrew P. Swiger, David S. Rosenthal,
Jeffrey J. Woodbury, Steven S. Reinemund, Michael J. Boskin, Samuel J. Palmisano, Kenneth C.
Frazier, Ursula M. Burns, Henrietta H. Fore, William C. Weldon, Rex W. Tillerson, William W.
George, Larry R. Faulkner, Douglas R. Oberhelman, and Peter Brabeck-Letmathe. See Dkt. No.
12, ¶¶31-46.
1

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before the Honorable Judge Esther Salas in the New Jersey Action. This Motion is based on this
Notice of Motion and Motion filed herewith, and the [Proposed] Order Granting Proposed
Intervenors’ Motion to Intervene for the Limited Purpose of Objecting to Defendants’ Request for
Dismissal with Prejudice, also filed herewith, and the pleadings and papers on file in this action.
MEMORANDUM IN SUPPORT OF PROPOSED INTERVENORS’ MOTION
I.

PRELIMINARY STATEMENT
The Institutional Plaintiffs should be granted intervention as of right pursuant to FRCP

24(a) as they have a “significantly protectable interest” that is related to the Institutional Plaintiffs’
claims in the New Jersey Action on behalf of Exxon, and will suffer a practical impairment of such
interest if not permitted to intervene and challenge the proposed dismissal of those claims with
prejudice.
The Institutional Plaintiffs and the Texas Plaintiffs both assert derivative claims on behalf
of Exxon. Defendants have moved to dismiss the Texas Action on the basis that, among other
things, the Texas Plaintiffs’ amended complaint fails to allege with sufficient particularity that
demand was wrongfully refused under FRCP 23.1. However, the Institutional Plaintiffs’ operative
complaint contains critical, outcome determinative allegations regarding the demand refusal that
are absent from the Texas Plaintiffs’ amended complaint.
The Institutional Plaintiffs assert claims that are based on a more fulsome factual record
and that contain more particularized allegations than those alleged by the Texas Plaintiffs, having
already pursued documents related to the conduct of Exxon’s internal investigation into the
underlying claims, and having received the 275-page report (the “Investigation Report”) detailing
that inquiry and investigation conducted at the Exxon Board of Directors’ (the “Board”) request.
The Institutional Plaintiffs promptly filed a consolidated amended complaint in the New Jersey
Action alleging with particularity the details of the Investigation Report, how the Board’s
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investigation was procedurally deficient and lacked the requisite independence, and challenging
the Board’s decision to refuse the litigation demanded as a breach of its fiduciary duties under
New Jersey law. New Jersey Action, Dkt. No. 56. 4 Dismissal with prejudice of the Texas Action,
in which the operative complaint was filed without the benefit of the review of the investigation
and Investigation Report, would have a preclusive effect on the Institutional Plaintiffs’ action.
Thus, if this Court grants dismissal, it should do so without prejudice, or alternatively, with
prejudice to the named Texas Plaintiffs only.
Absent a finding as of right to intervene, the Court should grant the Institutional Plaintiffs
permissive intervention under FRCP Rule 24(b). The Institutional Plaintiffs have a comparatively
greater interest in the Company, and thus the outcome of the litigation, and also have more
vigorously prosecuted the claims at issue, having already incorporated the Board’s 275-page
Investigation Report into an amended complaint in the New Jersey Action. Intervention in the
Texas Action will not expand this Court’s jurisdiction. Instead, this Court will consider limited
arguments on whether dismissal should be with or without prejudice, or a dismissal with prejudice
as to named Texas Plaintiffs only. No undue delay or prejudice to any party will result from the
Institutional Plaintiffs’ intervention. Indeed, the actions will move forward on their merits and the
interests of Exxon will remain protected, as well as the interests of shareholders suing on the
Company’s behalf.
For all of these reasons, and consistent with the liberal construction of FRCP Rule 24
favoring intervention, the motion to make a limited objection to Exxon’s Motion to Dismiss with
prejudice should be granted.

4

Reference to “Consol. Cpt.” herein refers to the foregoing consolidated complaint filed by
the Institutional Plaintiffs in the New Jersey Action.

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II.

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STATEMENT OF FACTS
Prior to filing a consolidated amended complaint in the New Jersey Action, in November

2018, the Institutional Plaintiffs demanded that Exxon investigate whether Exxon’s officers and
directors committed non-exculpable violations and/or breaches of fiduciary duties or other
violations of applicable law with respect to, inter alia, Exxon’s processes for evaluating enterprise
risks with respect to climate change (the “November 2018 Demands”). Consol. Cpt. at ¶¶239-40,
248-49. Subsequently, the Institutional Plaintiffs sought additional information regarding the
nature and progress of the investigation, and continued to communicate with Company counsel
regarding the same. Id. at ¶¶241-45. The Institutional Plaintiffs then agreed to a limited stay of
the New Jersey Action, through January 15, 2020, to allow time for the Board to make a decision
on the November 2018 Demands, and to access and review the Investigation Report. Id. at ¶¶25254.
In February and March 2020, the Institutional Plaintiffs were granted access to the
Investigation Report and the Institutional Plaintiffs thereby properly investigated the facts and
circumstances surrounding the Board’s investigation, and allowed the Board the time it required
to conclude its investigation with the eventual Investigation Report into the underlying
wrongdoing alleged in both the New Jersey Action and the Texas Action. As a result of the
foregoing efforts, on April 17, 2020, the Institutional Plaintiffs were able to allege with
particularity in the Consolidated Complaint how the Board wrongfully refused the November 2018
Demands, and to further allege why such refusal was not a valid exercise of business judgment.
Consol. Cpt. at ¶¶254-86.
Similar to the Institutional Plaintiffs, the Texas Plaintiffs assert claims against certain
officers and directors of Exxon for breach of fiduciary duty, waste of corporate assets, unjust

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enrichment, and violations of Sections 10(b), 21D, and 29(b) of the Securities Exchange Act of
1934 (the “Exchange Act”). Compare Consol. Cpt. at ¶¶287-318 with Texas Action Dkt. No. 12
(the “Texas Amended Complaint”) at ¶¶334-65. However, the Texas Amended Complaint was
filed on September 20, 2019, before the Board had refused the Texas Plaintiffs’ demand or
completed its investigation. The Texas Amended Complaint is therefore completely devoid of any
information regarding the process taken by the Board to investigate the underlying wrongdoing,
allegations regarding the Board’s independence, or even information concerning the investigation
or its outcome. Instead, the Texas Plaintiffs state only that “the Board has failed to provide [the
Texas Plaintiffs] with any information concerning any attempt to investigate the Demand, reach a
conclusion, and take appropriate action,” without detailing any effort taken by the Texas Plaintiffs
to obtain such information from Company counsel. Texas Complaint at ¶312. In lieu of the
detailed process, independence, and factual deficiencies and inconsistencies identified by the
Institutional Plaintiffs, the Texas Plaintiffs rely solely on the fact that they received no information
regarding the Company’s investigation as a “de facto refusal,” despite the fact that the Company’s
investigation was ongoing and the Texas Plaintiffs took no apparent action to receive further
information. Compare Consol. Cpt. at ¶¶254-86 with Texas Complaint at ¶¶312-19.
FRCP 23.1 requires that allegations regarding demand refusal be alleged with particularity.
Unsurprisingly, Defendants’ Motion to Dismiss argues that the Texas Amended Complaint, which
lacks any allegations about the Board’s investigation or decision, fails to plead with particularity
that the Board’s demand refusal was unreasonable under New Jersey law. Motion to Dismiss at
14-22. Significantly, the Motion to Dismiss makes, as a primary argument, that the Board acted
in good faith after conducting a reasonable inquiry, in conformity with New Jersey law, to reject
the demands at issue herein. Id. at 16, 19-22. The Texas Plaintiffs cannot effectively answer these

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arguments because their Amended Complaint alleges no facts about the investigation or refusal,
and they apparently have not reviewed the Investigation Report, in contrast to the vigorous
prosecution of the Institutional Plaintiffs. The Motion to Dismiss further requests that the Texas
Action be dismissed with prejudice under New Jersey law as a result of these shortcomings. Id. at
1, 13, 16, 22.
In response, the Texas Plaintiffs now belatedly move to conduct limited discovery into the
Defendants’ refusal of the litigation demands, presumably to conduct a review of the Investigation
Report that the Institutional Plaintiffs reviewed in February, and further have moved for an
extension of time to respond to the Motion to Dismiss. Texas Action, Dkt. Nos. 53-54. The Texas
Plaintiffs have not directly opposed Exxon’s specific request for dismissal with prejudice, which
could potentially prevent other Exxon shareholders from pursuing derivative claims on behalf of
the Company. Id.
III.

LEGAL ARGUMENT
Absent an order from this Court dismissing the Texas Action without prejudice or with

prejudice as to the named Texas Plaintiffs only, the Institutional Plaintiffs will be potentially
prejudiced. The Institutional Plaintiffs have pursued and reviewed Company documents in an
effort to allege particularized factual allegations of deficiencies in the process, controls, and
independence of the Board in carrying out its investigation into both the Texas Plaintiffs’ and
Institutional Plaintiffs’ demands. The Institutional Plaintiffs have an interest in the property
subject to the Texas Action, and without FRCP Rule 24 intervention, could be estopped in their
ability to protect the interests of Exxon and its shareholders. Thus, the Court should permit the
Institutional Plaintiff’s intervention as of right under FRCP Rule 24(a)(2) for the limited purpose
of objecting to Exxon’s request for dismissal of the underlying claims with prejudice.

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In the alternative, this Court may also grant permissive intervention under FRCP Rule
24(b)(1)(B). The claims of the Institutional Plaintiffs and the Texas Plaintiffs share common
questions of law and fact. As the Court has not yet ruled on Exxon’s Motion to Dismiss, and the
Texas Plaintiffs have requested additional time to conduct limited discovery in order to respond to
the Motion to Dismiss, the Institutional Plaintiffs’ limited intervention purposes of objecting to a
dismissal with prejudice will not cause undue delay or prejudice to the parties to this action.
Accordingly, the Institutional Plaintiffs respectfully request that the Court grant this
Motion to Intervene for this limited purpose.
A.

The Institutional Plaintiffs Should Be Granted Intervention as of Right
Pursuant to FRCP Rule 24(a)

FRCP Rule 24(a) permits a party to intervene as of right if: (i) the application is timely; (2)
the applicant has an interest relating to the property or transaction which is the subject of the action;
(3) the applicant is so situated that the disposition of the action may, as a practical matter, impair
or impede his ability to protect that interest; and (4) the applicant’s interest is inadequately
represented by the existing parties to the suit. FRCP Rule 24(a)(2); Wal-Mart Stores, Inc. v. Texas
Alcoholic Beverage Comm’n, 834 F.3d 562, 565 (5th Cir. 2016); Texas v. U.S., 805 F.3d 653, 657
(5th Cir. 2015); GNL Ridglea, LLC v. Guang Dong Hailea Group Co., Ltd., C.A. No. 4:18-cv00286, 2018 WL 5259657, at *4 (N.D. Tex. Oct. 5, 2018). “Although the movant bears the burden
of establishing its right to intervene, Rule 24 is to be liberally construed.” Texas, 805 F.3d at 656,
n.2 (citing Brumfield v. Dodd, 749 F.3d 339, 341 (5th Cir. 2014)). “Federal courts should allow
intervention when no one would be hurt and the greater justice could be attained.” Wal-Mart,

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834.3d at 565, n.2 (citing Sierra Club v. Espy, 18 F.3d 1202, 1205 (5th Cir. 1994)). The
Institutional Plaintiffs meet all elements to intervene as of right. 5
First, the Institutional Plaintiffs’ intervention is timely. As here, where intervention is
sought before discovery has begun and does not seek to delay or reconsider phases of the litigation
that have already concluded, a motion is timely. Wal-Mart, 834 F.3d at 565-66 (citing Flying J.
Inc. v. Van Hollen, 578 F.3d 569, 572 (7th Cir. 2009)). Exxon and the Individual Defendants filed
the Motion to Dismiss on August 10, 2020. Dkt. Nos. 46-47. The Institutional Plaintiffs sought
to intervene promptly, as soon as they knew that their derivative claims would be impacted by a
request to dismiss with prejudice, and can be considered alongside the Court’s deliberation on the
Motion to Dismiss the proceedings herein, eliminating the possibility of prejudice to the original
parties through delay. See Pomeroy, Inc. v. Border Opportunity Saver Systems, Inc., No. DR-10CV-10, 2011 WL 13324298, at *3 (W.D. Tex. May 12, 2011) (citing Stallworth v. Monsanto Co.,
558 F.2d 257, 265 (5th Cir. 1977)) (“the prejudice to the original parties to the litigation that is
relevant to the question of timeliness is only that prejudice which would result from the would-be
intervenor’s failure to request intervention as soon as he knew or reasonably should have known
about his interest in the action.”).
Second, the Institutional Plaintiffs have a legally protectable interest in the claims at issue
against Exxon’s senior executives and Board. A “legally protectable” interest is sufficient for
intervention “if it is of the type that the law deems worthy of protection, even if the intervenor
does not have an enforceable legal entitlement or would not have standing to pursue her own

5

In the Fifth Circuit, not all factors need to be met in order for a motion to intervene under
FRCP Rule 24(a) to yet be successful. See, e.g., Texas, 805 F.3d at 664 (“Because we hold that
the Jane Does have rebutted the presumption of adequate representation by showing adversity of
interest, we need not opine on whether these developments in the district court have impaired the
Government's ability to adequately represent the Jane Does’ interests.”).

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claim.” Wal-Mart, 834 F.3d at 566, n.7 (citing Texas, 805 F.3d at 659). The Institutional Plaintiffs
have such an interest, as they have demonstrated standing to pursue shareholder derivative claims
on behalf of Exxon in the New Jersey Action – indeed, a significantly stronger interest than those
of the Texas Plaintiffs. The Institutional Plaintiffs also have approximately 100 times the financial
interest in Exxon that the Texas Plaintiffs do. As of the dates of their demands, the Institutional
Plaintiffs owned approximately 66,700 shares of Exxon stock, while the Texas Plaintiffs together
owned 623 shares as of their demands. Compare New Jersey Acton, Dkt., No. 57-1, Exs. 1-2 with
Texas Action, Dkt. No. 8-2, at ¶3.
Further, courts have recognized that intervenors and plaintiffs hold the same interest in
pursuing shareholder derivative claims for breach of fiduciary duty, misappropriation of assets,
and corporate waste under the analogous Delaware Court of Chancery Rule 24(a). See Smollar v.
Potarazu, C.A. No. 10287, 2016 WL 3910863, at *1 (Del. Ch. June 29, 2016); see also In re
Chemed Corp. S’holder Deriv. Litig., Civil Action No. 13-1854, 2017 WL 1712530, at *10 (D.
Del. Apr. 25, 2017) (allowing intervention in a shareholder derivative action as “there is no doubt
. . . that [proposed intervenor] has a legally cognizable interest relating to the property or
transaction that is the subject of this action”). The Institutional Plaintiffs are pursuing the very
same derivative causes of action as the Texas Plaintiffs, which Exxon and the Defendants seek to
dismiss with prejudice. Motion to Dismiss at 1, 13, 16, 22. If the Court dismisses the Texas Action
with prejudice, the Institutional Plaintiffs’ efforts to secure relief on behalf of Exxon against its
officers and directors will be foreclosed.

Compounding the potential prejudice, the Texas

Plaintiffs have failed to challenge the Board’s response to the Texas Plaintiffs’ and Institutional
Plaintiffs’ demands, severely limiting prosecution of the claims due to their failure to review the
Investigation Report and amend the Texas Complaint.

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Third, because the pending Texas Action may “impair or impede the movant’s ability to
protect its interest,” intervention as of right is appropriate. FRCP Rule 24(a). The precedential
effect of an adverse judgment is a sufficient impairment to justify intervention. Sierra Club v.
Espy, 18 F.3d 1202, 1207 (5th Cir. 1994) (citing Ceres Gulf v. Cooper, 957 F.2d 1199, 1204 (5th
Cir. 1992)) ([A]n intervenor’s interest is impaired by the stare decisis effect of the district court’s
judgment . . . because of the precedential effect of the district court’s decision, an adverse
resolution of the action would impair [intervenors’] ability to protect their interest.”). As described
supra Section II. Statement of Facts at p. 6, the Texas Plaintiffs have not reviewed and incorporated
the Investigation Report into their pleadings, impeding the Institutional Plaintiffs’ ability to protect
Exxon’s and its shareholders’ interests in this action.
If the Court grants dismissal with prejudice in the Texas Action, Defendants may argue
that the Institutional Plaintiffs are collaterally estopped from pursuing the New Jersey Action. As
a recent Delaware decision held, shareholders seeking derivative claims on behalf of a company
are in privity with each other, justifying application of collateral estoppel to motions to dismiss
derivative claims. Cal. State Teachers’ Ret. Sys. v. Alvarez, 179 A.3d 824, 829-30 (Del. 2018),
cert. denied, No. 17-1695, 2018 WL 3093913 (U.S. Oct. 1, 2018). The shareholder in the
dismissed action in Alvarez, like Texas Plaintiffs here, failed to inspect company books and records
to aid in their pleadings, resulting in those claims being dismissed without the benefit of a fulsome
investigation. Id., 179 A.3d at 831. Absent limited intervention here to ensure dismissal of the
Texas Action is without prejudice, or with prejudice only to the named Texas Plaintiffs, the
Institutional Plaintiffs could similarly be estopped from pursuing their claims.
Fourth, the Institutional Plaintiffs easily make a showing that their interests may not be
adequately represented. The burden for establishing inadequate representation is “minimal,” and

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a potential intervenor need not even show actual inadequacy of representation, but “need only
show that representation by the existing parties may be inadequate.” Ross v. Marshall, 426 F.3d
745, 761 (5th Cir. 2005) (citing Heaton v. Monogram Credit Card Bank of Ga., 297 F.3d 416, 425
(5th Cir. 2002) (emphasis in original). Should the Court grant the Motion to Dismiss the Texas
Action with prejudice, Exxon and the Institutional Plaintiffs will not be adequately represented, as
the decision will have been made without the benefit of the Institutional Plaintiffs’ full
investigation, allowing them to challenge the Board’s investigation and decision promulgated in
response to plaintiffs’ demands.
A presumption of adequacy arises “when the would-be intervenor has the same ultimate
objective as a party to the lawsuit.” Texas, 805 F.3d at 661 (citing Edwards v. City of Houston, 78
F.3d 983 (5th Cir. 1996)). Here, both the Texas Plaintiffs and Institutional Plaintiffs arguably have
similar objectives in representing the Company in that they seek to assert similar claims on behalf
of the Company to protect its interests against certain of its directors and officers. See supra
Section II. Statement of Facts at p. 5. However, the presumption is defeated here because, in the
context of a shareholder derivative action with multiple shareholders seeking to represent the
interests of the Company, the difference engendered by the Institutional Plaintiffs’ vigorous
prosecution and a full investigation of the Board’s conduct in responding to plaintiffs’ demands in
comparison to the efforts taken by the Texas Plaintiffs defeats the presumption of adequacy. As
recognized in In re Intel Corp. S’holder Deriv. Litig., a recent decision concerning dismissal of
derivative claims that threatened to preclude similar derivative claims from being pursued, such a
difference in vigorousness of prosecution is a sufficient basis to find inadequacy of representation:
While the Court agrees as a general matter that disagreement as to litigation strategy
would not be a sufficient basis to find [plaintiffs] inadequate, it disagrees that
[proposed intervenors] seek intervention because they ‘believe they can litigate
better on Intel’s behalf’ or ‘disagree with decisions by plaintiffs who filed in federal

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court.’ Rather, [proposed intervenors] seek to protect the interests of Intel and its
shareholders in ensuring the derivative claims are fully investigated and litigated
on their merits to obtain the best possible recovery for Intel. This represents more
than mere difference in litigation strategy, namely the fundamentally different
points of view between [proposed intervenors] and [plaintiffs] on the litigation as a
whole.
Case No. 18-cv-01489, 2018 WL 5777138, at *4, n.5 (N.D. Cal. Nov. 2, 2018). 6 Applied to the
present action, the Texas Plaintiffs’ failure to challenge, or even examine, the Investigation Report
represents more than a mere difference in litigation strategy, but threatens to preclude prosecution
of the Institutional Plaintiffs’ well-pled claims and threatens the litigation as a whole.
B.

The Institutional Plaintiffs Should Be Granted Permissive Intervention
Pursuant to FRCP Rule 24(b)

The Court may also exercise its discretion under FRCP Rule 24(b) upon a showing of (1)
an independent ground for jurisdiction; (2) a timely motion; and (3) a claim or defense shares a
common question of law or fact in common with the main action. Fed. R. Civ. P. Rule 24(b); In
re Enron Corp. Sec., Deriv. & “ERISA” Litig., 229 F.R.D. 126, 130 (S.D. Tex. 2005). District
courts are given “broad discretion” in considering motions for permissive intervention. League of
United Latin Am. Citizens, Council No. 4434 v. Clements, 884 F.2d 185, 189 (5th Cir. 1989).
When considering its discretion to exercise permissive intervention, courts should also consider
“whether the intervention will unduly delay or prejudice the adjudication of the original parties’
rights.” Fed. R. Civ. P. Rule 24(b)(3); Enron, 229 F.R.D. at 131. The Court should grant the
Institutional Plaintiffs’ request for permissive intervention because they have made the requisite
showing and there would be no delay or prejudice to the adjudication of the rights of the parties to
this action.

6

Unless otherwise noted, emphasis is added and citations are omitted.
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By permitting the Institutional Plaintiffs’ limited intervention, the Court will not disturb
the jurisdictional basis of the Texas Action. The Institutional Plaintiffs seek the same claims on
behalf of the Company as the Texas Plaintiffs, and so do not seek to expand the Court’s jurisdiction
past the present live case or controversy. See, e.g., Allen-Pieroni v. Sw. Corr. LLC, No. 3:13-CV4089, 2017 WL 722200, at *3 (N.D. Tex. Jan. 26, 2017), report and recommendation adopted,
No. 3:13-CV-4089, 2017 WL 728235 (N.D. Tex. Feb. 23, 2017), aff’d sub nom. Allen-Pieroni v.
White, 694 F. App’x. 339 (5th Cir. 2017) (finding in the context of a third party intervention that,
“[i]n cases where a valid Article III case-or-controversy is present, the court’s jurisdiction vests”).
The Institutional Plaintiffs seek only to appear and argue the impact that a dismissal with prejudice
of the Texas Action may have on the New Jersey Action, and not to seek additional claims over
those present in the Texas Action. Instead, the Institutional Plaintiffs request only that the Court
consider supplemental argument regarding dismissal not otherwise presented here. Consequently,
the Institutional Plaintiffs do not seek to expand the Court’s jurisdiction or to claim a different
basis for jurisdiction. See Enron, 229 F.R.D. at 130 (finding permissive intervention appropriate
where “would-be intervenor is merely asking the court to exercise a power it already has”).
Next, Institutional Plaintiffs submit that the Texas Action and the New Jersey Action share
“a common question of law or fact,” justifying intervention. Fed. R. Civ. P. Rule 24(b)(1)(B);
Adams v. CLDN Tankers PTE Ltd., No. 2:18-CV-177, 2018 WL 7821399, at *1 (S.D. Tex. Sept.
25, 2018) (citing Deus v. Allstate Ins. Co., 15 F.3d 506, 525 (5th Cir. 1994)) (“Intervention is
appropriate when it prevents multiple lawsuits where common questions of law or fact are
involved.”). The Institutional Plaintiffs, like the Texas Plaintiffs, allege claims for breach of
fiduciary duty, waste of corporate assets, unjust enrichment, and violations of Sections 10(b), 21D,
and 29(b) of the Exchange Act, arising out of the Company’s processes for evaluating enterprise

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Page 18 of 20 PageID 3308

risks with respect to, and disclosures regarding, climate change. Compare Consol. Cpt. at ¶¶287318 with Texas Complaint at ¶¶334-65. The New Jersey Action thus has questions of law and fact
in common with the Texas Action, in that they seek to redress similar wrongs committed by
Exxon’s officers and directors on Exxon’s behalf.
Finally, the Institutional Plaintiffs have submitted their motion for permissive intervention
in a timely manner, so that intervention would pose no delay or prejudice to the original parties’
rights. In the Fifth Circuit, the primary factors to be considered for timeliness include: “[t]he
length of time during which the would-be intervenor actually knew or reasonably should have
known of his interest in the case before he petitioned for leave to intervene;” and “[t]he extent of
the prejudice that the exiting parties to the litigation may suffer as a result of the would-be
intervenor’s failure to apply for intervention as soon as he actually knew or reasonably should have
known of his interest in the case.” Edwards v. City of Houston, 37 F.3d 1097, 1105 (5th Cir. 1994),
on reh’g en banc, 78 F.3d 983 (5th Cir. 1996) (citing Stallworth v. Monsanto Co., 588 F.2d 257,
263 (5th Cir. 1977)). The Institutional Plaintiffs moved to intervene shortly after learning of and
reviewing Exxon’s and the Individual Defendants’ Motion to Dismiss. As discussed herein, the
Institutional Plaintiffs propose a limited intervention, only to raise a limited argument regarding a
pending motion recently submitted to the Court by an existing party. The Institutional Plaintiffs
have filed this motion well in advance of the conclusion of briefing on the Motion to Dismiss,
avoiding any delay in the prosecution of the Texas Action, and without disturbing scheduling for
briefing or the Court’s consideration of the motion.

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IV.

Page 19 of 20 PageID 3309

CONCLUSION

As set forth herein, the Institutional Plaintiffs’ intervention meets the requirements of
FRCP Rule 24. Accordingly, the Institutional Plaintiffs’ motion to intervene for the limited
purpose of ensuring that the Texas Action is not dismissed with prejudice should be granted.
Dated: September 4, 2020

Respectfully Submitted,
s/Theodore C. Anderson
Theodore C. Anderson
State Bar No. 01215700
tca@kilgorelaw.com
KILGORE & KILGORE, PLLC
3109 Carlisle
Dallas, Texas 75204
Local Counsel for Proposed Intervenor
SCOTT+SCOTT ATTORNEYS AT LAW LLP
Scott R. Jacobsen
The Helmsley Building
230 Park Avenue, 17th Floor
New York, NY 10169
Tel: (212) 223-6444
Fax: (212) 223-6334
E-mail: sjacobsen@scott-scott.com
-andGeoffrey M. Johnson
12434 Cedar Road, Suite 12
Cleveland Heights, OH 44106
Tel: (216) 229-6088
Fax: (860) 537-4432
E-mail: gjohnson@scott-scott.com
GLANCY PRONGAY & MURRAY LLP
Matthew M. Houston
Benjamin I. Sachs-Michaels
712 Fifth Avenue
New York, NY 10019
Telephone: (212) 935-7400
E-mail: bsachsmichaels@glancylaw.com
Co-Lead Counsel for Proposed Intervenor

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Page 20 of 20 PageID 3310

CERTIFICATE OF CONFERENCE

On September 3, 2020, I conferred with Michael Fistel, attorney for Plaintiffs, and he indicated that
Plaintiffs would reserve judgment on this motion until they can examine it. Counsel for Plaintiffs further
stated that they currently planned to oppose the motion to intervene, but may decide to file a non-opposition
on review of the motion. I also attempted to meet and confer with counsel for Defendants by reaching out
through e-mail, but counsel for Defendants indicated that they were unavailable to confer prior to the filing
of this motion. Defendants are accordingly presumed to oppose this motion under Local Rule 7.1(b)(3).

_/s/Benjamin I. Sachs-Michaels
Benjamin I. Sachs-Michaels, Attorney
for Proposed Intervenors

CERTIFICATE OF SERVICE
The undersigned hereby certifies that a true and correct copy of the foregoing document has
been served upon all counsel of record via the Court’s ECF filing system on this 4th day of
September, 2020.

s/Theodore C. Anderson
Theodore C. Anderson

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