Two plaintiff law firms initiated this lawsuit on behalf of the shareholders of the American Funds, alleging that the payment of advisory, Rule 12b-1, and administrative service fees by the Funds were improper, excessive, and not in the interest of shareholders. This lawsuit also contends that these fees charged to the Funds and their shareholders were not reasonably related to the services provided.
This lawsuit was initially filed in the United States District Court for the Central District of California. In December 2009, the District Court dismissed this case, applying the standards for evaluating mutual fund fees established in Gartenberg v. Merrill Lynch Asset Management, Inc. The plaintiffs appealed this District Court decision to the Ninth Circuit Court of Appeals. On August 24, 2011, the Ninth Circuit affirmed the District Court dismissal of this case.