In Masters v. UHS of Del. Inc., Appeal No. 09-3543 (8th Cir. January 6, 2011) (“Masters”), in contrast to at least one other appellate circuit, the Eighth Circuit held that actual confusion is not a prerequisite to an award of monetary damages under the Lanham Act.
In the wake of Hardt v. Reliance Standard Life Ins. Co., 130 S. Ct. 2149 (May 24, 2010), in which the Supreme Court held that a party must achieve "some success on the merits" in order to obtain an attorney’s fee award under ERISA, two federal circuits have concluded that the so-called "five-factor test" for determining such awards used by many district courts prior to Hardt remains an appropriate analytical framework for deciding whether to award attorneys fees under ERISA, but only after first concluding that a party has achieved some success on the merits.
On March 30, 2010, the US Supreme Court issued its decision in Jones v Harris Associates, embracing the Gartenberg standard (from the Second Circuit) for evaluating advisory fees and rejecting the approach articulated by the Seventh Circuit, which looks to market efficiency and trust law fiduciary duty.
In In re American Funds Fee Litigation, a recent decision by the U.S. District Court for the Central District of California, investors in several American Funds mutual funds brought a derivative action against a registered investment adviser and its subsidiary, a registered broker-dealer and American Funds’ distributor and underwriter, alleging that they breached their fiduciary duties to investors under Section 36(b) of the Investment Company Act of 1940 in connection with various fees charged to the funds.
The Department of Labor, AARP, and a group of law professors have filed amicus briefs in support of plaintiffs’ petition for rehearing and rehearing en banc in Hecker v. Deere, which remains pending in the Seventh Circuit.
On April 8, 2009, in Gallus v. Ameriprise Financial, Inc., the U.S. Court of Appeals for the Eighth Circuit weighed in on the ongoing debate regarding the evaluation of advisory fees and the corresponding fiduciary duty set forth in Section 36(b) of the 1940 Act and, in doing so, added yet another wrinkle to a debate which has worked its way up to the U.S. Supreme Court.
The Eighth Circuit, in Gallus v. Ameriprise Financial, Inc., No. 07-2945, 2009 WL 928920 (8th Cir. Apr. 9, 2009), held that the factors set forth in Gartenberg v. Merrill Lynch Asset Management Inc., 694 F.2d 923 (2d Cir. 1982) provide a useful framework for evaluating whether an investment adviser violated its fiduciary duty under 36(b) of the Investment Company Act of 1940 (1940 Act) by charging an excessive fee.
A recent opinion by the U.S. Court of Appeals for the Eighth Circuit reinforces the importance of good process surrounding board decision making, as well as a good faith effort by the investment adviser to provide accurate and complete information to the board during the contract review process.
The U.S. Court of Appeals for the Eighth Circuit recently added another possibility to be considered by the U.S. Supreme Court in its October 2009 term when it decides Jones v. Harris Associates L.P.
The U.S. Court of Appeals for the Eighth Circuit is the latest court to establish a standard for evaluating excessive fee claims under Section 36(b) of the Investment Company Act of 1940, a standard that focuses on the adviser's conduct during the negotiation process and the end result.