David Migdal; Linda Rohrbaugh v. Rowe Price-Fleming International, Incorporated

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
 DAVID MIGDAL; LINDA ROHRBAUGH,
Plaintiffs-Appellants,
v.
ROWE PRICE-FLEMING INTERNATIONAL,
INCORPORATED; T. ROWE PRICE
INTERNATIONAL STOCK FUND; T.
ROWE PRICE GROWTH STOCK FUND;
T. ROWE PRICE ASSOCIATES,
INCORPORATED; T. ROWE PRICE
RETIREMENT PLAN SERVICES,
INCORPORATED; T. ROWE PRICE No. 00-1420 INVESTMENT SERVICES, INCORPORATED,
Defendants-Appellees,
and
M. DAVID TESTA; MARTIN G. WADE;
DONALD W. DICK, JR.; ANTHONY W.
DEERING; PAUL M. WYTHES; JAMES
A.C. KENNEDY, III; HANNE M.
MERRIMAN; JAMES S. RIEPE; HUBERT
D. VOS; DAVID FAGIN; T. ROWE
PRICE SERVICES, INCORPORATED,
Defendants. 
Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Andre M. Davis, District Judge.
(CA-98-2162-AMD)
Argued: January 24, 2001
Decided: May 1, 2001

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Before WILKINSON, Chief Judge, and WIDENER and
WILLIAMS, Circuit Judges.
Affirmed by published opinion. Chief Judge Wilkinson wrote the
opinion, in which Judge Widener and Judge Williams joined.
COUNSEL
ARGUED: Ronald Barry Rubin, RUBIN & MONAHAN, CHAR-
TERED, Rockville, Maryland, for Appellants. Daniel A. Pollack,
POLLACK & KAMINSKY, New York, New York, for Appellees.
ON BRIEF: Joel C. Feffer, Wechsler Harwood, HALEBIAN & FEF-
FER, L.L.P., New York, New York, for Appellants. Anthony Zac-
caria, POLLACK & KAMINSKY, New York, New York; David
Clarke, Jr., PIPER MARBURY, L.L.P., Washington, D.C., for Appel-
lees.
OPINION
WILKINSON, Chief Judge:
Plaintiffs, shareholders of two mutual funds, sued the investment
advisers of their funds for breach of fiduciary duty under § 36(b) of
the Investment Company Act of 1940, ("ICA"), 15 U.S.C. § 80a-
35(b). After twice permitting plaintiffs to amend their complaint, the
district court dismissed the action with prejudice. Because plaintiffs
have failed to state a claim that the fees charged by the funds’ invest-
ment advisers were excessive in relation to the services they provided,
we affirm the judgment of the district court.
I.
A.
This appeal concerns the organization and governance of mutual
funds. A fund, or "investment company," is typically organized by a
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sponsor, such as an investment management company or a financial
institution. Most funds are externally managed — each fund contracts
with an investment adviser to recommend and supervise the fund’s
investments. The investment adviser also provides varying levels of
service to the fund, for instance, by providing the fund with office
space and staff. A fund’s investment adviser is typically affiliated
with the entity which originally organized the fund.
The fund’s board of directors is responsible for approving the advi-
sory agreement setting the investment adviser’s fee. See 15 U.S.C.
§ 80a-15(a), (c). Under the ICA, at least forty percent of a fund’s
directors must be "disinterested" — i.e., independent of the invest-
ment adviser. See 15 U.S.C. §§ 80a-10(a) & 80a-2(a)(19)(A). Further-
more, the advisory agreement between a fund and its investment
adviser must be approved by a majority of the fund’s disinterested
directors. See 15 U.S.C. § 80a-15(c).
B.
Plaintiffs David Migdal and Linda Rohrbaugh are shareholders in
the International Stock Fund and the Growth Stock Fund respectively.
Both of these funds are part of the T. Rowe Price Fund Complex, and
both are registered "investment companies" under the ICA. See 15
U.S.C. § 80a. Two T. Rowe Price affiliates serve as the investment
advisers of plaintiffs’ respective funds. Rowe Price-Fleming Interna-
tional, Inc., is the International Stock Fund’s investment adviser. T.
Rowe Price Associates, Inc., is the Growth Stock Fund’s investment
adviser.
Plaintiffs filed an initial, and later an amended, complaint against
these two investment advisers and various subsidiaries for breach of
fiduciary duty under § 36(b) of the ICA, 15 U.S.C. § 80a-35(b). The
district court dismissed the amended complaint for failure to state a
claim upon which relief could be granted. The court, however,
granted plaintiffs leave to re-amend their complaint.
On February 16, 1999, plaintiffs filed a second amended complaint,
which again alleged violations of Section 36(b) of the ICA, 15 U.S.C.
§ 80a-35(b). The amended complaint asserted two related claims.
First, plaintiffs alleged that the investment advisers breached their
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fiduciary duty under Section 36(b) because the fees they received
were excessive. Second, plaintiffs contended that the "independent"
directors of each of the mutual funds were not actually disinterested
parties as required by the ICA. See 15 U.S.C. §§ 80a-10(a) & 80a-
15(c). Specifically, several of the funds’ disinterested directors served
on the boards of between twenty-two and thirty-eight other funds
within the T. Rowe Price Fund Complex. For their services, these
directors received aggregate compensation of either $65,000 or
$81,000. Plaintiffs alleged that since forty percent of the boards were
not disinterested, the advisory agreements could not have been prop-
erly approved as required by Section 15(c). Therefore, the defendant
investment advisers breached their fiduciary duty under Section 36(b)
by failing to negotiate their advisory agreements at arm’s-length.
On March 20, 2000, the district court granted defendants’ Rule
12(b)(6) motion with prejudice. The court held that plaintiffs had
failed to plead sufficient facts to show that the compensation the
investment advisers received was excessive. The court stated that the
complaint’s "level of generality remains too high," because the plain-
tiffs’ allegations "do not remotely touch on the issue of what, if any,
relation exists between the disputed fees on the one hand, and the ser-
vices provided in consideration for their payment, on the other hand."
The court also held that plaintiffs had failed to allege sufficient facts
to show that the funds’ directors were not "disinterested," and hence
in violation of the ICA. Plaintiffs now appeal.
II.
A.
A Rule 12(b)(6) motion should only be granted if, after accepting
all well-pleaded allegations in the plaintiff’s complaint as true, it
appears certain that the plaintiff cannot prove any set of facts in sup-
port of his claim entitling him to relief. See Edwards v. City of Golds-
boro, 178 F.3d 231, 244 (4th Cir. 1999). Furthermore, the "Federal
Rules of Civil Procedure do not require a claimant to set out in detail
the facts upon which he bases his claim." Conley v. Gibson, 355 U.S.
41, 47 (1957). Rather, Rule 8(a)(2) requires only a "short and plain
statement of the claim showing that the pleader is entitled to relief."
Fed. R. Civ. P. 8(a)(2).
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Rule 12(b)(6), however, is not without meaning. "The presence [ ]
of a few conclusory legal terms does not insulate a complaint from
dismissal under Rule 12(b)(6) when the facts alleged in the com-
plaint" cannot support the legal conclusion. Young v. City of Mount
Ranier, 238 F.3d 567, 577 (4th Cir. 2001). And "[a]lthough the plead-
ing requirements of Rule 8(a) are very liberal, more detail often is
required than the bald statement by plaintiff that he has a valid claim
of some type against defendant." 5A Charles A. Wright & Arthur R.
Miller, Federal Practice and Procedure § 1357 at 318 (2d ed. 1990).
This requirement serves to prevent costly discovery on claims with no
underlying factual or legal basis. "Conclusory allegations in a com-
plaint, if they stand alone, are a danger sign that the plaintiff is
engaged in a fishing expedition." DM Research v. College of Am.
Pathologists, 170 F.3d 53, 55 (1st Cir. 1999).
B.
Section 36(b) of the ICA creates a fiduciary duty in a mutual fund’s
investment adviser "with respect to the receipt of compensation for
services." 15 U.S.C. § 80a-35(b). Section 36(b) also provides a pri-
vate cause of action to a mutual fund investor, against the fund’s
investment adviser, "for breach of fiduciary duty in respect of such
compensation" paid to the investment adviser by a fund.1 Id. The
1Section 36(b) states, in relevant part:
For the purposes of this subsection, the investment adviser of a
registered investment company shall be deemed to have a fidu-
ciary duty with respect to the receipt of compensation for ser-
vices, or of payments of a material nature, paid by such
registered investment company, . . . to such investment adviser
or any affiliated person of such investment adviser. An action
may be brought under this subsection . . . by a security holder
of such registered investment company on behalf of such com-
pany, against such investment adviser, or any affiliated person of
such investment adviser, . . . for breach of fiduciary duty in
respect of such compensation or payments paid by such regis-
tered investment company . . . to such investment adviser or per-
son.
15 U.S.C. § 80a-35(b).
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plaintiff bears the "burden of proving a breach of fiduciary duty." 15
U.S.C. § 80a-35(b)(1).
Plaintiffs’ first claim is that defendants violated Section 36(b)
because the fees the investment advisers received from the fund were
so disproportionately large that they bore no reasonable relationship
to the services rendered. In Gartenberg v. Merrill Lynch Asset Mgmt.,
Inc., 694 F.2d 923 (2d Cir. 1982), the court exhaustively analyzed
Section 36(b). Gartenberg concluded that the standard for determin-
ing whether compensation for managing a fund constitutes a breach
of fiduciary duty is "whether the fee schedule represents a charge
within the range of what would have been negotiated at arm’s-length
in the light of all of the surrounding circumstances." Id. at 928. The
court reasoned that the typical arm’s-length bargaining does not occur
between an investment adviser and a mutual fund because the opera-
tions of the fund are conducted by the adviser. Gartenberg concluded,
therefore, that to violate Section 36(b), "the adviser-manager must
charge a fee that is so disproportionately large that it bears no reason-
able relationship to the services rendered and could not have been the
product of arm’s-length bargaining." Id.
Section 36(b) was enacted in large part because Congress recog-
nized that as mutual funds grew larger, it became less expensive for
investment advisers to provide the additional services. Congress
wanted to ensure that investment advisers passed on to fund investors
the savings that they realized from these economies of scale. See
Fogel v. Chestnutt, 668 F.2d 100, 111 (2d Cir. 1981). Plaintiffs, how-
ever, do not make any allegations about excess profits from econo-
mies of scale here. Rather, they offer the following as evidence of
"excessive fees." First, the amount of fees charged by the two funds.
Second, the fact that two or three similar funds offered lower fee rates
than the funds in this case, while simultaneously outperforming them.
Third, the fact that the two funds in question did not meet their prese-
lected benchmark performance standards. Fourth, the fact that despite
the funds’ underperformance, the defendant investment advisers’
earnings increased by more than 20 percent.
The district court held that these allegations failed to state a claim
because plaintiffs did not address in any way the relationship between
the fees that the advisers received and the services which they pro-
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vided in return. Several district courts have reached the same conclu-
sion. See, e.g., Krantz v. Prudential Investment Fund Mgmt., LLC, 77
F. Supp. 2d 559, 565 (D.N.J. 1999) (dismissing excessive fees claim
under Section 36(b) where plaintiff failed to make allegations about
the services defendants rendered); Strougo v. Scudder, Stevens &
Clark, Inc., 964 F. Supp. 783, 805 (S.D.N.Y. 1997) (same); but see
Krantz v. Fidelity Mgmt. & Research, Co., 98 F. Supp. 2d 150 (D.
Mass. 2000).
We agree with the district court. To survive a motion to dismiss,
a complaint may not simply allege in a conclusory manner that advi-
sory fees are "excessive." Instead, a plaintiff must allege facts that, if
true, would support a claim that the fees at issue are excessive. As the
district court correctly recognized, in order to determine whether a fee
is excessive for purposes of Section 36(b), a court must examine the
relationship between the fees charged and the services rendered by the
investment adviser. See Gartenberg, 694 F.2d at 928 (to violate Sec-
tion 36(b), "the adviser-manager must charge a fee that is so dispro-
portionately large that it bears no reasonable relationship to the
services rendered") (emphasis added).
Plaintiffs have failed to allege any facts pertinent to this relation-
ship between fees and services. Specifically, while plaintiffs have
challenged the fees that defendants charged, they have failed to allege
sufficient facts about the services that defendants offered in return for
those fees. For example, plaintiffs’ comparison between the two
underlying funds and three other mutual funds is not particularly
meaningful precisely because it does not address the particular ser-
vices offered by the defendants in this case.
Plaintiffs contend, however, that the evidence they have offered
with respect to the funds’ performance is the ultimate proxy for the
services offered by the investment advisers. They argue that if a fund
underperforms, the services of its investment adviser are worth less
than those offered by the investment adviser of a better performing
fund. While performance may be marginally helpful in evaluating the
services which a fund offers, allegations of underperformance alone
are insufficient to prove that an investment adviser’s fees are exces-
sive. Investing is not a risk-free endeavor. Even the most knowledge-
able advisers do not always perform up to expectations, and
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investments themselves involve quite different magnitudes of risk.
Furthermore, investment results are themselves cyclical. An under-
achieving fund one year may be an overachieving fund the next.
Accepting plaintiffs’ invitation to permit discovery here because the
funds underperformed would make it possible for other plaintiffs to
state a claim in limitless actions filed under Section 36(b). The district
court provided plaintiffs with three opportunities to allege something
about the particular services offered by the funds’ investment advis-
ers. Plaintiffs failed to do so, and thus failed to state a claim that the
fees charged by defendants were excessive.
Plaintiffs now seek discovery in order to uncover the elements
which are currently missing from their Section 36(b) claim. While we
certainly do not expect plaintiffs to prove a claim in their complaint,
they must state a claim therein. Rule 12(b)(6) requires more than the
mere recitation of boilerplate statutory language. While Rule 8 is a
liberal standard, plaintiffs cannot simply promise the court that once
they have completed discovery, something will turn up. Rather before
they are permitted to proceed to discovery, plaintiffs must have some
factual basis for believing that a legal violation has actually occurred.
In this case, plaintiffs have alleged nothing to suggest that the invest-
ment advisers’ fees are excessive. Accordingly, the district court was
correct in ruling that plaintiffs failed to state a claim and thus satisfy
the requirements of Rule 12(b)(6).
C.
1.
Plaintiffs contend, however, that Section 36(b)’s private right of
action is not limited solely to claims for excessive compensation.
Rather, plaintiffs assert that they do not need to allege excessive fees
because they instead alleged that the directors of the funds were not
independent. Specifically, plaintiffs alleged that the disinterested
directors served on multiple boards within the T. Rowe Price Fund
Complex and they were substantially remunerated for their service.
Plaintiffs therefore contend that the defendant investment advisers
breached their fiduciary duty under Section 36(b) by bargaining at
less than arm’s-length with the funds’ directors.
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Plaintiffs’ position, however, is not supported by either the statu-
tory text or the caselaw. Section 36(b) imposes on an investment
adviser a "fiduciary duty with respect to the receipt of compensation
for services." 15 U.S.C. § 80a-35(b) (emphasis added). And Section
36(b) grants individual investors a private right of action only "for
breach of fiduciary duty in respect of such compensation." Id.
(emphasis added). As the statutory text indicates, Section 36(b) is
sharply focused on the question of whether the fees themselves were
excessive, and not on the status of the directors who approved them.
Congress passed Section 36(b) primarily to address the concern that
"advisers’ fees, generally stated as a percentage of the market value
of the managed assets, which had been altogether reasonable when a
fund was launched, may have become unreasonably high when the
fund grew to enormous size." Fogel, 668 F.2d at 111. Other sections
of the ICA address the independence of the funds’ directors. For
instance, Section 10(a) addresses the composition of a fund’s board
of directors, and Section 15(c) addresses the requisite percentage of
disinterested directors necessary to ratify an advisory agreement. See
15 U.S.C. §§ 80a-10(a) & 80a-15(c). Furthermore, Section 36(a)
imposes a general fiduciary duty upon both the directors and invest-
ment advisers of a fund. See 15 U.S.C. § 80a-35(a). Section 36(b) was
not enacted to provide a cause of action separate from Section 36(a)
to govern the directors’ independence or the investment adviser’s
general performance.
For this reason, most of the cases decided under Section 36(b) are
narrowly focused on disproportionate, excessive, or unearned fees.
See, e.g., Meyer v. Oppenheimer Mgmt. Corp., 895 F.2d 861, 866 (2d
Cir. 1990); Krinsk v. Fund Asset Mgmt., Inc., 875 F.2d 404, 409 (2d
Cir. 1989); Kalish v. Franklin Advisers, Inc., 742 F. Supp. 1222, 1227
(S.D.N.Y. 1990), aff’d, 928 F.2d 590 (2d Cir. 1991); see also In re
Nuveen Fund Litig., No. 94 C 360, 1996 WL 328006, at *14 (N.D.
Ill. June 11, 1996) ("Accordingly, every court addressing a § 36(b)
claim has required the plaintiff to demonstrate that the compensation
or payment received by the investment adviser was disproportionate
to the services rendered."); but see Krantz v. Prudential Invs., 77 F.
Supp. 2d at 565; Green v. Nuveen Advisory Corp., 186 F.R.D. 486
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(N.D. Ill. 1999); Green v. Fund Asset Mgmt., L.P., 19 F. Supp. 2d 227
(D.N.J. 1998).2
Thus, if this claim for general breach of fiduciary is to be brought,
it must be done under some other section of the ICA, or alternatively
under state law. Section 36(b) is limited to cases where there was
excessive compensation. Allegations about the status of directors with
whom fee negotiations took place relate too tangentially to the simple
question of whether the investment advisers received excess compen-
sation for the services they rendered. Once again, as the district court
recognized, plaintiffs failed to address the relationship between fees
and services in their complaint. General breach of fiduciary duty
claims which involve merely an incidental or speculative effect on
advisory fees are not properly within the scope of Section 36(b).
2.
Even assuming that claims beyond those simply for excessive com-
pensation are cognizable under Section 36(b), the district court cor-
rectly dismissed plaintiffs’ claim. Plaintiffs have failed to properly
allege that the funds’ disinterested directors were actually "interested"
under the ICA. Thus, plaintiffs’ theory that the investment advisers
breached their fiduciary duty under Section 36(b) by negotiating the
advisory agreements with the directors fails.
The ICA requires that at least forty percent of an investment com-
pany’s directors be "disinterested," 15 U.S.C. § 80a-10(a), and that
2The district court cases which have expanded the scope of Section
36(b) beyond claims for excessive fees have universally relied on the
Second Circuit’s opinion in Galfand v. Chestnutt Corp., 545 F.2d 807
(2d Cir. 1976). However, contrary to the district courts’ analyses, Gal-
fand cannot be read to expand the scope of the private right of action
under Section 36(b). Galfand interpreted Section 36(b) to provide a
cause of action against an investment adviser for inadequate disclosure
of information regarding a fee agreement, which permitted the invest-
ment adviser to obtain a higher, unjustified fee. Galfand, 545 F.2d at
811-12. Thus, Galfand was about the excessive fees which ensued from
the fee arrangement, not about the disinterestedness of the independent
directors.
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every agreement with an investment adviser be approved by a major-
ity of the disinterested directors. See 15 U.S.C. § 80a-15(c). "Disinter-
ested" directors are, inter alia, those directors who are not "affiliated"
with the fund’s investment adviser — i.e., they are not "controlled"
by the investment adviser. See 15 U.S.C. §§ 80a-2(a)(19) & 80-
2(a)(3). "Control" is "the power to exercise a controlling influence
over the management or policies of a [fund], unless such power is
solely the result of an official position with such [fund]." 15 U.S.C.
§ 80a-2(a)(9). The ICA, however, expressly creates a presumption
against control, stating that a "natural person shall be presumed not
to be a controlled person within the meaning of this subchapter." Id.
This presumption, however, may be rebutted by "evidence." Id.
As evidence that the disinterested directors were in fact interested
parties, plaintiffs alleged the following. First, that the funds’ disinter-
ested directors served on the boards of directors of between twenty-
two and thirty-eight other funds within the T. Rowe Price Fund Com-
plex. Second, that these directors received, in aggregate, $65,000 or
$81,000 for their services on these multiple boards. Third, that
because of their obligations to so many funds, the directors could not
spend enough time on each particular fund. Fourth, that the directors
were dependent on the investment advisers for information and for
their positions on the boards.
However, plaintiffs have failed to allege any facts that, if true,
would support a claim that the disinterested directors were actually
interested. As an initial matter, neither the ICA nor the SEC pro-
scribes the use of multi-board membership within mutual fund com-
plexes. See Krantz v. Fidelity Mgmt., 98 F. Supp. 2d at 154-55. In
fact, membership on the boards of several funds within a mutual fund
complex is the prevailing practice in the industry. See Olesh v. Drey-
fus Corp., Fed. Sec. L. Rep. (CCH) ¶ 98,603, 1994 WL 780179
(E.D.N.Y. Aug. 15, 1994). The SEC has noted that "interlocking
boards of directors within an investment complex are neither prohib-
ited nor uncommon." Id. (citing In the Matter of the Vanguard Group,
Inc., SEC Release No. 11645, 1981 SEC Lexis 1981, at *16 n.35
(Feb. 25, 1981)). Indeed, the SEC has recently reaffirmed its position
that "a director of a fund who also is a director of another fund man-
aged by the same adviser generally would not be viewed as an inter-
ested person of the fund under section 2(a)(19) solely as a result of
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this relationship." Interpretive Matters Concerning Independent
Directors of Investment Companies, [1999-2000 Transfer Binder]
Fed. Sec. L. Rep. (CCH) ¶ 86,211 at 82,440 (Oct. 14, 1999) (citing
H.R. Rep. No. 1382, 91st Cong., 2d Sess. 15 (1970); S. Rep. No. 184,
91st Cong., 1st Sess. 34 (1969) ("a director of one investment com-
pany would not ordinarily be deemed an interested person of that
company by reason of being a director of another investment com-
pany with the same adviser")).
Several courts have likewise held that the fact that a director serves
on multiple boards within a fund complex is insufficient to demon-
strate control. See Krantz v. Fidelity Mgmt., 98 F. Supp. 2d at 157
(dismissing claim that overlapping service on 237 boards with com-
pensation ranging between $220,500 and $273,500 rendered directors
"interested") (citing Krantz v. Prudential Invs., 77 F. Supp. 2d at 563
(dismissing claim that overlapping service on between fifteen and
thirty-eight boards with an average compensation of $90,000 rendered
directors "interested")); Olesh v. Dreyfus Corp., Fed. Sec. L. Rep.
(CCH) ¶ 98,907, 1995 WL 500491 (E.D.N.Y. Aug. 8, 1995) (holding
that directors who sat on over fifteen boards and received over
$50,000 in compensation were not interested); but see Strougo v. Bas-
sini, 1 F. Supp. 2d 268, 273-75 (S.D.N.Y. 1998); Strougo v. Scudder,
Stevens & Clark, Inc., 964 F. Supp. 783, 795 (S.D.N.Y. 1997).
The parties obviously have very different views about the practice
of directors serving on the boards of multiple funds. Plaintiffs suggest
that there is a danger of directors being spread too thin and becoming
overly dependent on investment advisers. Defendants contend to the
contrary that directors of multiple funds can become conversant with
a wide variety of investment opportunities and practices, which can
be put to beneficial use in managing particular assets. Furthermore,
defendants suggest this practice can reduce costs through the sharing
of investment information among funds and by reducing the need for
fund directors to learn about securities from the ground up.
As a legal matter, we think this whole debate is beside the point.
The fact that directors of the funds might be busy does not suggest
that they were in any way "interested" as defined by the ICA. See 15
U.S.C. § 80a-2(a)(19). Likewise, plaintiffs’ assertions that the direc-
tors were dependent on the investment advisers for information sheds
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no light on the question of whether the directors are disinterested. One
would expect any conscientious director to request information from
management and staff on the day-to-day operations for which they are
responsible. The ICA itself approves this very practice. "It shall be the
duty of the directors of a registered investment company to request
and evaluate, and the duty of an investment adviser to such company
to furnish, such information as may reasonably be necessary to evalu-
ate the terms of any contract whereby a person undertakes regularly
to serve or act as investment adviser of such company." 15 U.S.C.
§ 80a-15(c).
There is a presumption under the ICA that natural persons are dis-
interested, see 15 U.S.C. § 80a-2(a)(9), which plaintiffs’ evidence
simply fails to counteract. Plaintiffs have thus failed to state a claim
that the funds’ disinterested directors are in fact interested.
III.
The Investment Company Act balances the tension between pro-
tecting mutual fund investors from overly generous charges by invest-
ment advisers, and shielding fund management from an outbreak of
harassing lawsuits. Any change in this balance will have to come
from Congress. We are satisfied, however, that the district court prop-
erly applied the present statutory provisions. The district court pro-
vided plaintiffs with three opportunities to state a cognizable claim
under Section 36(b). They failed to do so. For the foregoing reasons,
the judgment of the district court is
AFFIRMED.
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