Overview
On March 30, 2010, in a unanimous decision, the United States Supreme Court endorsed the well-tested legal framework articulated in the Second Circuit’s 1982 decision in Gartenberg v. Merrill Lynch Asset Management (commonly called the Gartenberg standard). This standard—used by courts since 1982 to assess claims of excessive fund advisory fees—formed the framework used by fund boards in considering advisory fees as part of the annual advisory contract review process.
Specifically, the Court held that, in order to be found liable in a shareholder suit brought under Section 36(b) of the Investment Company Act of 1940, an investment adviser must charge a fee that is “so disproportionately large that it bears no reasonable relationship to the services rendered and could not have been the product of arm’s length bargaining.”
This page has background information about this important case and the Court’s decision.
- IDC Comments on Jones v. Harris Decision Mar 30, 2010
- ICI Responds to Supreme Court Decision in Jones v. Harris Mar 30, 2010
- Jones v. Harris Informed Supreme Court on Directors' Crucial Role Nov 2, 2009
- Jones v. Harris Raises Vital Issues for Investors Nov 2, 2009
- IDC Files Supreme Court Brief Detailing Unique Role of Independent Directors in Fee Determinations Sep 3, 2009
- ICI Files U.S. Supreme Court Brief in Jones v. Harris Sep 3, 2009
Selected Commentary
- Editorial: Mutual Assured Destruction, Wall Street Journal Nov 3, 2009
- Editorial: Stop Suing Yourself, The Washington Times Nov 2, 2009
- Opinion: The Trial Lawyers' Latest Target: Mutual Funds, National Review Online Nov 2, 2009
- Opinion: The Real Motivation Behind Jones v. Harris, Ignites Nov 2 2009
- Opinion: Tort Lawyers Target Mutual Funds, The Wall Street Journal Nov 2 2009
- Opinion: It's Time to Stop the Trial Bar's Assault on Mutual Funds, Investment News Nov 1, 2009
- Opinion: A Costly Lesson in the Rule of "Loser Pays," Financial Times Nov 2, 2009
- Opinion: Jones v. Harris: Standing Up for Directors, Board IQ Oct 27, 2009
- Opinion: Channel Anger at Wall Street Pay, Not Fund Fees, Investor’s Business Daily Oct 29, 2009
- Background on Jones v. Harris Associates L.P. Sep 28, 2009
- Myths v. Facts: Jones v. Harris Associates L.P. Sep 28, 2009
- Summary: Jones v. Harris Associates L.P. Sep 28, 2009
- Supreme Court Docket
- Respondent brief filed: August 27
- Amici curiae briefs in support of respondent filed: September 3
- Petitioner's reply brief filed: September 28
- Oral arguments: November 2 (transcript)
- Decision: March 30, 2010
- 2010 Investment Company Fact Book (pdf) Apr 28, 2010
- Trends in the Fees and Expenses of Mutual Funds, 2009 (pdf) Apr 13, 2010
- The Economics of Providing 401(k) Plans: Services, Fees, and Expenses, 2008 (pdf) Aug 6, 2009
- Trends in the Fees and Expenses of Mutual Funds, 2008 (pdf) Apr 9, 2009
- Ownership of Mutual Funds Through Professional Financial Advisers, 2007 (pdf) Sep 23, 2008
- Understanding Investor Preferences for Mutual Fund Information (pdf) Aug 25, 2006
- Mutual Funds and Institutional Accounts: A Comparison (pdf) Jan 26, 2006
- Competition in the Mutual Fund Business (pdf) Jan 17, 2006
- Overview of Mutual Fund Governance Mar 1, 2010
- Frequently Asked Questions About Mutual Fund Directors Mar 1, 2010
- Overview of Fund Governance Practices, 1994-2008 (pdf) Sep 30, 2009
- Overview of Fund Governance Practices, 1994–2006 (pdf) Nov 7, 2007
Briefs Filed by the Parties & Other Friends of the Court
Parties’ Briefs
- Brief for Petitioner Jerry N. Jones, Mary F. Jones, and Arline Winerman
- Brief for Respondent Harris Associates, L.P.
- Reply Brief for Petitioner Jerry N. Jones, Mary F. Jones, and Arline Winerman
Amicus Briefs
- Brief for Fidelity Management & Research Company in Support of Respondent
- Brief for the Mutual Fund Directors Forum in Support of Respondent
- Brief for the CATO Institute in Support of Respondent
- Brief for the Securities Industry and Financial Markets Association in Support of Respondent
- Brief for the Chamber of Commerce of the United States of America in Support of Respondent
- Brief for the Law and Finance in Support of Respondent
- Brief for United States of America in Support of Petitioner
- Brief for Robert Litan, Joseph Mason, and Ian Ayres in Support of Petitioner
- Brief for The North American Securities Administrators Association, Inc., in Support of Petitioner
- Brief for Law Professors in Support of Petitioner
- Brief for the National Association of Shareholder and Consumer Attorneys (NASCAT) in Support of Petitioner
- Brief for AARP and the Consumer Federation of America in Support of Petitioner
- Brief for Professor Deborah A. DeMott and Professor Mark L. Ascher in Support of Petitioner
- Brief for John C. Bogle in Support of Petitioner
