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Vedder Thinking | Articles Parties Stipulate to Dismissal of Last Pending Section 36(b) Excessive Fee Suit


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On December 30, 2020, the parties to the last pending excessive fee suit brought against a mutual fund’s investment adviser under Section 36(b) of the Investment Company Act of 1940 submitted to the U.S. District Court for the District of Maryland a joint stipulation of dismissal with prejudice. On January 4, 2021, the court entered an order on the stipulation, resulting in the closure of the case. The litigation began in April 2016, when the plaintiffs, investors in eight mutual funds managed by T. Rowe Price Associates, Inc., filed a complaint in the U.S. District Court for the Northern District of California alleging that T. Rowe Price received excessive advisory fees from the funds in violation of the firm’s fiduciary duty because the firm provided substantially similar services for a lower fee as a sub-adviser to unaffiliated funds. The case was transferred to the Maryland District Court in August 2016, and claims with respect to one of the eight funds named in the original complaint were voluntarily dismissed in March 2018. In the stipulation, the parties stated that the dismissal of the suit was not the result of a settlement, compromise or payment of any consideration to the plaintiffs, and each side agreed to bear its own costs and attorneys’ fees.

Following the dismissal of this case, there are no Section 36(b) excessive fee suits currently pending in federal court.

The stipulation was submitted under the caption Zoidis v. T. Rowe Price Assocs., Inc., case no. 1:16-cv-02786-GLR.


John S. Marten


Nathaniel Segal


Jacob C. Tiedt