On April 27, 2016, a group of shareholders in the T. Rowe Price funds filed an excessive fee lawsuit in U. S. District Court for the Northern District of California. The complaint alleges that T. Rowe Price charges between 13-30 basis points more in advisory fees for investment management services to its retail mutual funds, compared to the "arm's length" rates it charges for sub-advisory services provided to outside mutual funds.
T. Rowe Price filed a motion to dismiss on July 1, 2016. The plaintiffs filed their opposition brief and T. Rowe Price filed a reply brief.
On August 4, 2016, the case was transferred to the U.S. District Court in Maryland. The Court permitted each party to file supplemental briefs in connection with the motion to dismiss in September 2016.
On March 31, 2017, the Court denied the motion to dismiss the case filed by T. Rowe Price. The Court found the factual allegations in the complaint adequate to present a plausible claim under section 36(b) of the Investment Company Act.