HOUSTON, June 17 (Reuters) - A U.S. judge on Monday

dismissed a lawsuit Exxon Mobil ( XOM ) had filed against

activist group Arjuna Capital after the group had agreed not to

pursue future proxy filings at the company's annual meetings.

The lawsuit by the largest U.S. oil company had raised alarm

among activists and public pension investors who argued it would

muzzle debate among shareholders and public companies.

U.S. District Court Judge Mark Pittman ruled Exxon's claim

was no longer valid after Arjuna "unconditionally and

irrevocably" agreed not to submit a future proposal regarding

Exxon's greenhouse gas emissions.

"The court cannot advise Exxon of its rights without a live

case or controversy to trigger jurisdiction" and Arjuna's pledge

not to file similar resolution in the future "has eliminated any

case or controversy," Pittman wrote.

Pittman's dismissal was without prejudice, meaning Exxon

could refile its case in the future.

An Exxon spokesperson declined immediate comment. Arjuna did

not respond to requests for comment.

Arjuna and Follow This, a Netherlands-based environmental

group, had proposed a resolution calling on stockholders to

request the oil major set new targets for reducing some of its

greenhouse gas emissions.

Exxon sued the pair in January and refused to drop the case

after they agreed not to bring the petition forward, citing "the

likelihood" the two could file similar resolutions in the

future. Pittman last month had dropped Follow This from the case

as the group was outside his court's jurisdiction.

"Unfortunately, we expect the company to continue this

aggressive agenda rather than returning to their past practice

of constructive dialogue with their owners," said Tim Smith, a

senior policy adviser for the Interfaith Center on Corporate

Responsibility, whose members include Arjuna.

While investors likely will be relieved by the

dismissal, Exxon "used the proxy and the shareholder meeting to

denigrate any proponents presenting resolutions as well as

challenging the authority of the SEC (Securities and Exchange

Commission) in the proxy process," Smith said, reiterating

concerns raised by the shareholder advocacy group earlier this

year.