Elena Kagan, nominated on Monday by President Barack Obama to become a U.S. Supreme Court justice, urged the high court in a filing last year to reject a 2008 appellate court decision that would have made it easier for mutual funds to charge higher fees to retail customers than pension funds and other institutional clients for similar strategies managed in separate accounts.
The Supreme Court on March 30 affirmed the longtime precedent on appropriate mutual fund fees in the 1982 Gartenberg vs. Merrill Lynch Asset Management ruling and sent the Jones vs. Harris Associates case back to the 7th U.S. Circuit Court of Appeals in Chicago. Ms. Kagan filed an amicus brief in the Harris case.
“The Gartenberg court's inquiry — an analysis of ‘all pertinent facts,' potentially including the fees charged by the adviser for comparable services offered to unaffiliated clients — provides the appropriate way to resolve (excessive-fee lawsuit) cases,” Ms. Kagan wrote in her amicus brief.
Ms. Kagan, who has been U.S. solicitor general since March 19, 2009, is largely an enigma on other investment and pension-related issues, according to pension industry lobbyists, because she has not previously served as a judge and has not been compelled to publish her legal opinions on the record.
“Elena is widely regarded as one of the nation's foremost legal minds,” Mr. Obama said in announcing her nomination to the high court. “She has won accolades from observers across the ideological spectrum for her well-reasoned arguments and commanding presence.”
If confirmed, Ms. Kagan would replace retiring Justice John Paul Stevens.
Officials at the mutual fund industry's Investment Company Institute had no comment about her nomination or about her arguments in the Harris case, said Mike McNamee, an ICI spokesman.