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Supreme Court Opinion in Jones v. Harris Associates

March 30, 2010

On March 30, 2010, the U.S. Supreme Court released its opinion in the Jones v. Harris Associates case.

Justice Alito delivered the opinion of the unanimous court  embracing the "Gartenberg standard" regarding how mutual fund directors assess the fees their funds pay for investments advice.  The Court forcefully articulated the importance of a robust decision made by independent directors, finding that "if the disinterested directors considered the relevant factors, their decision to approve a particular fee agreement is entitled to considerable weight, even if a court might weigh the factors differently."  In its opinion, the Court vacated the Seventh Circuit's ruling and remanded the case back to the lower court for further fact finding and a new ruling based on the standards set forth in the Supreme Court's opinion.