American Funds Fee Suit Ain't Over 'Til the Ninth Circuit Sings
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Friday, March 5, 2010

American Funds Fee Suit Ain't Over 'Til the Ninth Circuit Sings

Fundsters across the business probably breathed a collective sigh of relief in December when Capital Group successfully beat back over a lawsuit over allegedly excessive mutual fund fees. But it's not over yet. Last month Milberg, the class action law firm the plaintiffs in In Re American Mutual Funds Fee Litigation, appealed its defeat to the United States Court of Appeals for the Ninth Circuit.

Milberg's Janine Pollack told Morningstar's Ryan Leggio that she expects the Ninth Circuit's decision to hinge on the results of an even higher profile appeal in a similar suit, Jones v. Harris Associates (i.e. the advisor to the Oakmark Funds). For that case, all fundsters' eyes are on the U.S. Supreme Court.

The highest court in the land is expected to issue a ruling in the Harris suit within the next few months. In fact, the Supreme Court's ruling should arrive before Milberg and Capital Group have to file their opening and answering appellate briefs (by July 21 and August 20, respectively). So the judges of the Ninth Circuit, and the attorneys on both sides of the Capital Group suit, will probably end up factoring the Supreme Court's decision into their arguments.

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