On June 6th, a Federal District Court dismissed two lawsuits brought derivatively on behalf of two mutual funds by a shareholder of the funds. The shareholder alleged that the mutual funds' trustees improperly contracted to use fund assets under Rule 12b-1 to pay broker-dealers who sell fund shares and that those contracts are unenforceable under section 47(b) of the Investment Company Act ("ICA"). The Court held that to establish a section 47(b) claim, a plaintiff must assert a predicate violation of a substantive provision of the ICA which itself has a private right of action. It found however, that plaintiff failed to do so. Smith v. OppenheimerFunds Distributor Inc.