Life And Annuity Series: Trend In Excessive Fee Decisions

The trend of excessive fee decisions relating to the insurance industry continues:

1. In re Davis New York Venture Fund Fee Litigation—The SDNY's opinion denying the motion to dismiss is notable for two reasons:

First, the SDNY permitted the Davis fund's shareholders to proceed with their complaint in New York even though they had already lost an excessive foe case in Arizona. Specifically, the Davis fund's shareholders had sued in Arizona federal court back in 2008, claiming (among other things) that the Davis fund's fees were excessive when measured against index fund fees, and that the Davis fund had failed to pass along economies of scale. The Arizona Court rejected those claims in 2011, and the Ninth Circuit affirmed earlier this year. The Ninth Circuit's decision emphasized (correctly in my view) the deference to be paid to the approval of fees by funds boards, and rejected the plaintiffs less-than-precise allegations regarding excessive fees that have