High Court Declines Review of Excessive Fee Case
October 30, 2012 (PLANSPONSOR.com) – The U.S. Supreme Court has refused to review a case in which retirement plan participants sued John Hancock over excessive fees.
Reported by Rebecca Moore
By declining to hear the case, the high court lets stand a decision by the 3rd U.S. Circuit Court of Appeals moving the case forward. Reversing a lower court decision, the appellate court found that plan participants could pursue their case against John Hancock without first enjoining the plan trustees in the suit (see “Court Moves Forward Excessive Fee Claims Against John Hancock”).
The district court dismissed Employee Retirement Income Security Act (ERISA) claims because participants failed to make a pre-suit demand upon the plan trustees to take appropriate action and failed to join the trustees as parties.
The district court also dismissed excessive fees claims under the Investment Company Act of 1940, saying only those maintaining an ownership interest in the funds in question could sue under the derivative suit provision enacted by Congress. In addition, it said the participants are no longer investors in the funds in question. The 3rd Circuit upheld this ruling.