(Bloomberg) -- A federal judge dismissed a lawsuit by Exxon Mobil Corp. against Arjuna Capital after a lawyer for the activist investor group vowed not to try to resurrect a shareholder policy opposed by the company.

The judge in Fort Worth, Texas, issued his order Monday hours after holding a hearing in the closely watched case over Exxon’s novel move to use the courts to keep environmental and social investor bids out of annual meetings. The suit was part of a broader corporate pushback to the power wielded by the US Securities and Exchange Commission in the vetting of shareholder proposals.

US District Judge Mark Pittman had previously rejected Arjuna’s request for dismissal, agreeing with Exxon’s argument that even after Arjuna’s original proposal was pulled, there was nothing to stop the activist group from continuing to file similar ones. But Arjuna then “unconditionally and irrevocably” pledged not to submit similar proposals.

“At base, the second time’s the charm for Arjuna, as its ‘unconditional and irrevocable’ pledge ensures Exxon the offending conduct won’t recur,” the judge wrote.

At the hearing, Pittman told a lawyer for Arjuna that if the firm or an ally group repackages the anti-fossil fuel proposal, “I’ll take your law license away.”

Publicly traded companies typically debate the merits of individual proposals with the SEC, which can advise whether they be excluded from the ballot. But critics of the process, including Exxon, claim the SEC’s advice can vary widely depending which administration is in office.

Exxon welcomed Arjuna’s pledge to not submit similar proposals in the future.

“We’ve heard a lot about shareholder rights, and our suit has always been about preserving those rights because shareholder democracy is only as strong as the rules that govern it,” Chairman and Chief Executive Officer Darren Woods said in a statement. “Making repeated proposals that garner a small minority of support doesn’t serve anyone’s interest except the proponent’s.”

Exxon’s highly unusual decision to seek legal judgment rather than go through the SEC was seen as a test of corporations’ ability to shut down activist investor proposals they don’t like.

Arjuna had argued that Exxon was using the lawsuit to “fight a proxy war” with the securities regulator. 

But the US Chamber of Commerce and the Business Roundtable backed Exxon in a February court filing. The business trade groups said the SEC’s decision to allow “shareholder proposals pushing social and political agendas” enables “a subset of activists to commandeer corporate proxy statements for their own parochial ends.” This takes time away from “genuine proposals” and wastes company money printing and distributing the activist proposals, they said.

“As Exxon and amicus note, the trend of shareholder activism in this country isn’t going anywhere,” the judge wrote Monday. “The SEC is behind the ball on this issue. But the court cannot advise Exxon of its rights without a live case or controversy to trigger jurisdiction.”

The case is Exxon Mobil Corporation v. Arjuna Capital, LLC, 24-cv-00069, US District Court, Northern District of Texas (Fort Worth).

(Updates with Exxon comment.)

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