A 2004 suit filed by investors against Harris Associates, the adviser to the Oakmark Funds, was closely watched all the way to the Supreme Court. The plaintiffs held that Harris charged excessive management fees (management fees news) and thus breached its fiduciary duty. The eye-popping claim was that the fees charged them were double what Harris charged institutional clients for the same services.

At issue: The Gartenberg standard for setting mutual fund fees (mutual fund news), which "basically states that fees should be determined from arm's-length bargaining between a fund's adviser and its board of directors," according to Investment News. A circuit court rejected this standard because it "relies too little on markets." 

Somewhat surprisingly, the Supreme Court (Supreme Court news) stated that "the Gartenberg standard should be applied but stressed that the law--and not market forces--should dictate mutual fund pricing. The court pointed out that, under the Investment Company Act of 1940, a fund's board members are charged with acting as the fund's fiduciaries. And that should help keep fees from being excessive." Individual investors claimed victory, but that may be a stretch. The LA Times says that the ruling holds that mutual fund investors can sue funds for charging exorbitant fees but also made it harder for plaintiffs and regulators to win such claims. 

For more:
- here's the article 
- here's the LA Times article

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