Fiduciary Duty Sup Ct 4 13 2012

7/31/2019 Fiduciary Duty Sup Ct 4 13 2012

1/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

Official - Subject to Final Review

IN THE SUPREME COURT OF THE UNITED STATES

- - - - - - - - - - - - - - - - - x

JERRY N. JONES, ET AL., :

Petitioners :

v. : No. 08-586

HARRIS ASSOCIATES L.P. :

- - - - - - - - - - - - - - - - - x

Washington, D.C.

Monday, November 2, 2009

The above-entitled matter came on for oral

argument before the Supreme Court of the United States

at 10:04 a.m.

APPEARANCES:

DAVID C. FREDERICK, ESQ., Washington, D.C.; on behalf of

the Petitioners.

CURTIS E. GANNON, ESQ., Assistant to the Solicitor

General, Department of Justice, Washington,

D.C.; on behalf of the United States, as amicus

curiae, supporting the Petitioners.

JOHN D. DONOVAN, JR., ESQ., Boston, Mass.; on behalf of

the Respondent.

1Alderson Reporting Company


2/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


C O N T E N T S

ORAL ARGUMENT OF PAGE

DAVID C. FREDERICK, ESQ.

On behalf of the Petitioners 3CURTIS E. GANNON, ESQ.

On behalf of the United States, as amicuscuriae, supporting the Petitioners 18

JOHN D. DONOVAN, JR., ESQ.

On behalf of the Respondent 27REBUTTAL ARGUMENT OFDAVID C. FREDERICK, ESQ.

On behalf of the Petitioners 47



3/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


P R O C E E D I N G S

(10:04 a.m.)

CHIEF JUSTICE ROBERTS: We will hear

argument first this morning in Case 08-586, Jones v.

Harris Associates.

Mr. Frederick.

ORAL ARGUMENT OF DAVID C. FREDERICK

ON BEHALF OF THE PETITIONERS

MR. FREDERICK: Thank you,

Mr. Chief Justice, and may it please the Court:

In 1970, Congress amended the Investment

Company Act to provide a cause of action when an

investment adviser breaches its fiduciary duty with

respect to compensation.

The Seventh Circuit upheld summary judgment

for Respondent under a legal standard for fiduciary duty

that Respondent here no longer defends.

For three reasons, the Seventh Circuit's

judgment should be reversed. First, under the Court's

longstanding precedent, in this context a fiduciary duty

requires a fair fee, achieved through full disclosure

and good-faith negotiation.

Second, the best gauge of a fair fee is what

the investment adviser charges at arm's-length in other

transactions for similar services.



4/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


And, third, applying that standard here,

Harris charged twice as much in percentage terms for

providing virtually identical advisory services in

arm's-length transactions with institutional investors.

With respect to the first point, the

standard for fiduciary duty has been clear from this

Court's cases, at least since Pepper v. Litton, in which

the Court said that a fair result in the

circumstances -- a fair fee -- was an important

component of a fiduciary duty.

Congress was aware of that standard when it

enacted the 1970 amendments to the Investment Company

Act. The SEC brought the case to the Congress'

attention, and that standard, we submit, is one that

Congress intended to incorporate.

Applying that standard, where Pepper said

that the best gauge of a fair fee is what the person --

the fiduciary charges in arm's-length transactions,

applied here, the best way to understand how that

fiduciary duty is being breached in this context is what

Harris is charging for same or similar services at

arm's-length to institutional investors.

JUSTICE KENNEDY: Is Harris a fiduciary in

the same sense as a corporate officer and a corporate

director? Or does his fiduciary duty differ? Is it



5/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


higher or lower, same with a guardian, same with a

trustee?

I mean, the word "fiduciary" -- does

fiduciary imply different standards, depending on what

kind of fiduciary you are?

MR. FREDERICK: The basic concept,

Justice Kennedy, is the same. There are two components,

where there must be full disclosure of information and a

fair result, and that fair result translates in

different contexts in different ways. Here, because of

the statutory references to fiduciary duty with respect

to compensation, one focuses on the fairness of the fee

charged.

But, as Professor Dumont points out in her

amicus brief, the idea of a fiduciary duty is one that

is well known in various circumstances of the law, and

as applied here the concept goes to the fairness of the

fee.

JUSTICE KENNEDY: Well, would the test for

compensation in this case be the same as any director or

any officer of a corporation?

MR. FREDERICK: The difference here, Justice

Kennedy, is that in those circumstances the indicia of

an arm's-length transaction may be achieved. The

directors can fire the head of a company. They can call



6/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


for changes.

Here, the investment adviser has appointed

the members of the board. As this Court said in the

Daily Income Fund case, the earmarks of an -- of an

arm's-length transaction are absent precisely because --

JUSTICE KENNEDY: I just want to know, is

the fiduciary duties the same? Is the fiduciary

standard the same, without getting into how its applied?

Is the fiduciary standard the same for

Jones, for a guardian, for a trustee, for a corporate

officer or a corporate director, always the same?

MR. FREDERICK: Yes. The concept is fair

result through full information and good-faith

negotiations.

JUSTICE SCALIA: And for lawyers?

MR. FREDERICK: For lawyers --

JUSTICE SCALIA: Lawyers have a fiduciary

obligation to their clients; right?

MR. FREDERICK: That is true.

JUSTICE SCALIA: So courts should review

lawyers' fees for -- on the basis of whether it's a fair

result.

MR. FREDERICK: That is how courts do it

every day in this country, Justice Scalia, when they are

asked to make fee applications for reasonableness.



7/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


CHIEF JUSTICE ROBERTS: Well, but this is

different. I mean, this is part of an expense of a

fund. They don't get fees, but -- but they get -- they

have to pay for the lawyers, just like they have to pay

for management advice.

So why wouldn't you review the lawyers' fees

to make sure they are fair?

MR. FREDERICK: The lawyers' fees in which

context, Mr. Chief Justice? I'm not sure I understand

the question.

CHIEF JUSTICE ROBERTS: Counsel for the

fund.

MR. FREDERICK: Counsel for the fund is --

that is actually not at issue here, but the issue of

what constitutes reasonable expenses may arise in

various circumstances.

The statute prohibits fees that are

unreasonable in terms of their unfairness to the fund.

The concept here is that the board cannot fire the

investment adviser. So in evaluating the fairness of

the fee the adviser is charging the fund, the normal

indicia of an arm's-length transaction is absent, and

that is the key principle here because this adviser is

using the same manager to provide the same research

analytics from the same research group, from the same



8/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


meetings, buying the same stocks, and simply allocating

them to different accounts and charging those to whom it

owes a fiduciary duty twice what it is getting at

arm's-length.

JUSTICE GINSBURG: But there was in this

record, was there not, a submission by the adviser

comparing what mutual funds this fund was charged, what

institutional funds were charged, but explaining the

differential in terms of the services provided, that

more services were provided to the fund and less

services were provided to the institutional investors.

MR. FREDERICK: And, Justice Ginsburg, that

is where there is a disputed issue of fact for which

summary judgment is not appropriate, because the

plaintiffs submitted evidence that in fact the services

provided to the institutional investors were greater,

even though they were being charged a lower amount of

money.

JUSTICE GINSBURG: Who would have the

burden? You said that is an issue that has not been

decided, it's a disputed issue of fact, appropriate for

remand. Who -- would you have the burden if they came

forward and said, look, this is what our situation is.

These are the services. Would you have the burden to

show that in fact they were comparable and the



9/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


differences did not warrant the differences in the fee?

MR. FREDERICK: Yes.

JUSTICE GINSBURG: You would have the

burden?

MR. FREDERICK: We have the burden.

JUSTICE SCALIA: That's different from

normal trust law, isn't it?

MR. FREDERICK: It is.

JUSTICE SCALIA: Normally where you are a

fiduciary, it's up to you to prove that it was

reasonable.

MR. FREDERICK: That's true.

JUSTICE SCALIA: So Congress evidently did

not mean ordinary trust law to apply in this context.

MR. FREDERICK: We disagree with that last

part, Justice Scalia. We agree that Congress did make

modifications to the way a cause of action ordinarily

would have been brought at common law for breach of

fiduciary duty in several respects, including imposing

the burden of proof on the investor. Where we disagree

is that when they used the phrase "fiduciary duty" they

intended to mean something less than what fiduciary duty

had meant at common law.

CHIEF JUSTICE ROBERTS: What if -- if you

are having courts decide -- review what is fair, a fair



10/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


fee, what if the adviser had given such good advice that

the fund beat the industry average for his category of

fund by 5 percent over the last 5 years. Does he get

double the normal compensation of the average fees?

Does he get triple? 50 percent more? How is the court

supposed to decide that?

MR. FREDERICK: Well, there is an issue of

fact as to how relevant performance is. They didn't

give the money back when their performance lagged behind

the market, Mr. Chief Justice, in this case. So the

question of whether or not a performance metric is

relevant is certainly a factor that will be entitled to

less --

CHIEF JUSTICE ROBERTS: Well, surely you

think it is. When you say they don't give the money

back, you are not suggesting that the amount of the fees

should be the same regardless of whether they outperform

by 10 percent or not?

MR. FREDERICK: My point, Mr. Chief Justice,

is that when they charge the same amount, buying the

same stocks, to institutional investors and achieve the

same performance, there is no reason why the mutual fund

should be charged twice as much.

CHIEF JUSTICE ROBERTS: Well, but there is

different parameters, right, in the sense that you're

10

Alderson Reporting Company


11/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


trying -- the company is trying to attract investors to

the mutual fund. If you are advising a pension fund, it

is not the case that they are trying to attract

pensioners who have other choices.

MR. FREDERICK: But the investor doesn't

gain because of the marketing skill of the adviser.

Simply having a larger asset pool which increases the

fee that the adviser can charge doesn't inure to the

individual benefit of the investor. And the point of

this statute was to provide protection against investors

so that when the adviser charged excessive fees that

excess would be returned to the fund for the pro

rata benefit --

JUSTICE KENNEDY: You said that Congress

used "fiduciary" in a special sense. Then -- then, I

have to conclude that your earlier answer is confusing

for me, because I thought you were going to tell us that

this investment adviser has the same fiduciary standard

that officers and directors of corporations have. Then

you say that Congress used it in this special sense. So

that doesn't quite square.

MR. FREDERICK: Well, Justice Kennedy, let

me just add the extra words of the statute, because what

Congress said was a fiduciary duty "with respect to

compensation." And so when I say special sense, I mean

11



12/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


that Congress used additional words to elaborate on the

circumstance in which the fiduciary duty would be

examined.

Here what is happening is that an

arm's-length transaction for the same services -- the

same manager is going out and touting his services to

the institutional investor, but simply charging them

half as much money for providing the same portfolio of

management.

CHIEF JUSTICE ROBERTS: Do technological

changes make a difference in terms of disclosures

required? These days all you have to do is push a

button and you find out exactly what the management fees

are. I mean, you just look it up on Morningstar and

it's right there and you can make -- as an investor you

can make whatever determination you'd like, including to

take your money out.

MR. FREDERICK: The fact that an investor

may know going in what the fee is does not address the

problem Congress was intending to address, which is that

as larger and larger sums of assets were accreted to the

mutual fund, the investor was not obtaining the benefits

of economies of scale. And that's the central point --

CHIEF JUSTICE ROBERTS: So we could look

at -- you know, as the fund grows bigger and he doesn't

12



13/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


get those benefits he can go look at another fund. It

takes 30 seconds.

MR. FREDERICK: And that again doesn't

address the problem Congress was trying to get at, which

is to protect the company, not the individual investor.

The individual investor might lessen the damages that

that investor suffers, but the fund, the people

remaining, continue to pay excessive fees.

JUSTICE SCALIA: No, but he protects the

company ultimately, because when investors leave the

company that is charging excessive fees to go to other

companies, the company that they are leaving sees that

something's wrong and has to lower its compensation to

its adviser. Why doesn't that affect the company at

issue?

MR. FREDERICK: A large number of assets

under management in mutual funds, something like 26 to

35 percent according to materials that are in the

record, are from 401(k) plans, where the investor is

essentially locked into the fund that his or her company

chooses to make that investment. And even as to

investors who are not locked in, there are significant

tax consequences where over time an investor might be in

the Oakmark Fund and have to suffer large tax

consequences in order to get the benefit of the

13



14/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


statute --

CHIEF JUSTICE ROBERTS: Companies --

companies change who they invest with under the 401(k)'s

all the time. The employees are not happy with the

return they are getting because the company has limited

their choices, they change. It happens all the time.

MR. FREDERICK: And Mr. Chief Justice, as

the Court recognized in the Daily Income Fund case, this

is a unique cause of action in which Congress was

intending to protect the entire corpus of the investors

in the fund, because --

CHIEF JUSTICE ROBERTS: You told me just a

little while ago, or told somebody, Congress wasn't

interested in protecting investors; they were interested

in protecting the companies.

MR. FREDERICK: The company is comprised of

the investors, Mr. Chief Justice. What the right of

action does not do is to provide individual damages to

the investor who brings the suit. The recovery inures

to the entire benefit of all the investors.

JUSTICE SOTOMAYOR: Counsel, can I unpackage

your argument a little bit. Because using the word

"fair fee" in my mind is meaningless, because it has to

be fair in relationship to something. And so what is

your definition of what that something is that it's fair

14



15/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


to, and -- or unfair against? And start from there,

because I understood the Seventh Circuit to be saying:

Look, a fair fee is paying market value. If one takes a

sort of reading -- whatever negotiation goes on between

the two, as long as there has been full disclosure as

required, that's the market. So that's fair. You're

saying it's something else. What's that something else?

MR. FREDERICK: Well, what the Court said in

pepper is that fair is what is reflective of what an

arm's-length agreement would produce.

JUSTICE SOTOMAYOR: All right. So you start

there.

MR. FREDERICK: Yes.

JUSTICE SOTOMAYOR: All right. So let's

stop confusing this -- the articulation of the standard,

which is -- that's fair. What would an arm's-length

transaction produce? And let's go to what seems to be

part of your argument and sort of what everyone's

skirting around, which is what's the proof that a

particular transaction is not arm's-length?

The Seventh Circuit appeared to be saying,

it's arm's-length when the parties have done all of the

disclosure that is required, because then the buyer can

decide whether they want to pay that fee or not, and

once they choose to it's a fair price. It's an arm's-

15



16/61


17/61


18/61


19/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


just find that quite a puzzling use of the word

"fiduciary."

Now, if Congress uses it as a term of art or

in some special sense, fine.

MR. GANNON: Well, we do think that --

JUSTICE KENNEDY: But it seems to me an odd

use of the term "fiduciary." I don't know why Congress

didn't use some other word.

MR. GANNON: Well, we do think that the term

"fiduciary duty" is here used to counterbalance the lack

of arm's-length bargaining that exists between the board

of directors and the investment adviser, and we do think

that it drew upon the established term of art in

Pepper v. Litton, the case that counsel for Petitioners

was already referring to. That's a case that actually

involved corporate directors and there the same test,

the same ultimate standard, was stated, which is whether

the bargain carries the earmarks of an arm's length

bargain and whether it's inherently fair.

And so we do think that in the development

of the legislation in 1969, the memorandum that the SEC

submitted to Congress in 1969 explained that the shift

from reasonableness to fiduciary duty largely achieved

some procedural objectives of shifting the focus from

the board of directors to the investment adviser, and

19



20/61


21/61


22/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


this systematic disparity between the amounts that

mutual funds were being charged by investment advisers

and the amounts that investment advisers were charging

their unaffiliated clients, and in the 1969 memorandum

that I referred to, which is reprinted in an appendix to

the amicus brief by John Bogel in its entirety, the SEC

mentioned that comparison as being something that may

well be relevant in proving in an individual case that

that particular investment adviser's fees are excessive.

And we think that the test here of whether

under all the circumstances, which is what section

36(b)(2) points the Court towards, of having to weigh --

having to weigh the board's approval of fees in light of

all the circumstances, that those circumstances include

things like the evidence that petitioners have presented

here.

JUSTICE GINSBURG: Mr. Gannon, the -- all

the circumstances, that comes from the Second Circuit's

Gartenberg case?

MR. GANNON: Well, it also comes,

Justice Ginsburg, from the text of section 36(b)(2).

JUSTICE GINSBURG: But in -- in that case,

at least there was a footnote that seemed to say, you

don't have to engage in a -- in the comparison with what

institutional investors are paid.

22



23/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


MR. GANNON: The footnote that you are

talking about did point out that in that case the

comparison that the plaintiffs were attempting to draw

between the money market fund at issue and a pension

fund wasn't a particularly relevant one, because the

services at issue were so different. And here the

parties appear to dispute how different the services

are. And at the summary judgment stage, the Respondent

stated that it disputed how comparable the relevant

services were.

The district court and the court of appeals

considered that dispute immaterial because, instead of

comparing, instead of determining whether this

investment adviser is selling the same services at half

the price to its unaffiliated clients who actually can

engage in arm's length bargaining, those courts simply

said that if it -- if it falls within the range that is

charged by other mutual funds, that would be acceptable.

And we --

CHIEF JUSTICE ROBERTS: Counsel, the statute

does not say, in considering the rates you look at all

the circumstances. Am I right? It says, in considering

whether to defer to the board, you look at all the

circumstances.

MR. GANNON: It does say that you should

23



24/61


25/61


26/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


JUSTICE SOTOMAYOR: Well, how much deviance,

and what is the scope of the range?

MR. GANNON: Well, I think that the term of

art of "fiduciary duty" doesn't necessarily demonstrate

how much deviance away from the range there would be. I

think that depending upon the segment of the market the

range might be more or less narrow.

In segments of the market where services are

more commodified and standardized, perhaps with index

funds, there might be a much narrower range of fees that

are arrived at through arm's-length bargaining, and even

-- and smaller disparities might be inappropriate there.

JUSTICE KENNEDY: How is the -- how is the

standard you've just described different from a standard

of reasonableness?

MR. GANNON: It -- I think that the chief

way it differs from reasonableness, Justice Kennedy, is

in saying that the Court doesn't actually have to decide

what the single most reasonable fee is. But as the SEC

explained in 1969, the shift from reasonableness to --

JUSTICE KENNEDY: Well, I would be very

surprised if "reasonableness" always meant one -- one

figure. It could mean a range.

MR. GANNON: Well, I think reasonableness

is - is inevitably going to be part of the inherent

26



27/61


28/61


29/61


30/61


31/61


32/61


33/61


34/61


35/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


of disputed fact. So let's go back. Are you disavowing

the Seventh Circuit's approach? Because I read your

brief and it doesn't appear as if you are defending

their market approach that says so long as the process

was fair, any fee is okay. That's how I thought they

had reached their conclusion.

MR. DONOVAN: I think what Judge Easterbrook

said, and we don't agree, is if there is deceit of

directors that would justify a cause of action under

36(b). But in the absence of, in his words, "pulling

the wool over the eyes of the trustees" --

JUSTICE SOTOMAYOR: That's what I'm talking

-- I am using his words in terms of case --

MR. DONOVAN: I do --

JUSTICE SOTOMAYOR: And you're disavowing

that?

MR. DONOVAN: I do not defend that, because

I can imagine, as your hypothetical asked earlier,

directors or trustees who -- are not paying attention --

JUSTICE SOTOMAYOR: Your positions is no

different than the solicitor general's, that there has

to be some measure of fair process and some measure of a

fair fee, at least within -- in terms of it not being

outside the range an arm's length transaction?

MR. DONOVAN: The solicitor general gets it

35



36/61


37/61


38/61


39/61


40/61


41/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


MR. DONOVAN: I look at it in the Gartenberg

sense, Your Honor. And the reason is because as I --

from what I said the first question is, is when do you

ask courts to substitute their judgment?

CHIEF JUSTICE ROBERTS: It's probably --

you're not the person to -- to ask, but do you

understand the Solicitor General's position to be your

understanding of the Gartenberg sense or something else?

MR. DONOVAN: I believe they interpret in

the Gartenberg sense. I think that the Solicitor

General's position and the Respondent's, with respect to

the standard that you ought to apply, is Gartenberg.

JUSTICE BREYER: What do we do about

Gartenberg? That is to say, the key sentence you can

read either way. The key sentence could mean -- it just

depends on tone of voice. You must charge a fee that is

not so disproportionately large that it bears no

reasonable relationship to the services rendered and

could not -- could not have been the product of

arms-length bargaining. Or you could say, look, it's

unlawful where it's so large -- it doesn't -- where

there is no reasonable relationship. And if there is no

reasonable relationship, how could it have been the

product of arm's-length bargaining?

MR. DONOVAN: I agree you can turn the words

41



42/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


upside down. I think they turned it upside down --

JUSTICE BREYER: You object if we turn them

upside down?

MR. DONOVAN: I think they turned them

upside down for a reason, and the reason is 36(b)(1),

which imposes the burden of proof upon --

JUSTICE BREYER: Well, I'm saying the tone,

be a little careful here.

MR. DONOVAN: Well --

JUSTICE BREYER: So we can say the substance

is -- I'm just trying this out -- the substance is to

look and see if it's reasonable, and if it's reasonable

it certainly is the product of arm-length bargaining, if

it's not reasonable, how could it be? Got to get an

answer to that, okay? So, that way you see the tone is

be careful, you are a judge, you are not a rate-setter.

How's that?

MR. DONOVAN: I would accept the proposition

that it is reasonable if it is outside of what could

have been bargained at arm's length. I think they

turned it upside down the fact for the reason that the

statute reverses the burden of proof and I think that

they also acknowledge that it is a process-oriented

thing for judges to do, because after all you are asking

here a standard for judges to apply in a contested

42



43/61


44/61


45/61


46/61


47/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


always required and may be dispositive and is always a

fraction of what mutual fund charges and that judges are

the, in the first instance, the ones to decide who is

fair and reasonable or what is fair and reasonable, as

opposed to directors, I suggest you consign 8,000 mutual

funds to a trial.

On this record, these were funds that had

best in class performance for fees that were at or below

industry averages.

That is not a record upon which a reasonable

person could conclude that the adviser has over-reached.

That is at the heart of fiduciary duty. I see my time

is about to expire.

Thank you, Your Honor.

CHIEF JUSTICE ROBERTS: Thank you, counsel.

Mr. Frederick, you have three minutes

remaining.

REBUTTAL ARGUMENT OF DAVID C. FREDERICK

ON BEHALF OF THE PETITIONERS

MR. FREDERICK: At this recording here did

not make findings -- this was a summary judgment case,

and in fact, the Court didn't find that the disputes

were nonexistent.

In fact, on page 30a, the district court

said that the disputes were nonmaterial, and that's a

47



48/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


very important distinction because the joint appendix

that you have before you contains a lot of evidence in

which it is disputed whether or not these were similar

services.

The Harris manager on page 6 -- JA 650, the

portfolio holdings of the funds, are very similar. On

512, the Harris fund manager testimony that, when he

buys a stock, he buys it for all mutual funds and

independent accounts, with the same investment

objective.

On 505 to 506, the Harris research director

testimony that the managers of the mutual funds and

independent accounts share equally all work done by the

research department, and 513 to 514, that the Harris

fund manager says all of our analysts do research for

all of our clients.

There is disputed evidence here as to what

constitutes similarity, Justice Sotomayor, these are

comparing apples to apples because the record indicates

that there are separate contracts for the additional

fees that they charge to the mutual funds for the

additional services provided.

We're simply talking about comparisons of

money management, but --

CHIEF JUSTICE ROBERTS: Was your friend

48



49/61

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


correct, that these funds have better than average

performance and lower than average fees?

MR. FREDERICK: In one small aspect of the

damages period, that is correct, and after that was

found, they had lower than average performance and

higher than average fees, Mr. Chief Justice. It's a

damages period that encompasses several years.

If I could go back to the point, though,

about the fiduciary duty, what Judge Cardozo, when he

was on the New York Court of Appeals, said, a fiduciary

represents the punctilio of honor, and that is

contrasted with the morals of the marketplace operating

at arm's-length.

It surely cannot be the case that, where you

are dealing with a fiduciary duty -- which is a higher

standard recognized in the law -- that you can charge

twice as much as what you are obtaining at arm's-length

for services that you are providing.

The Gartenberg court, Justice Breyer, in

fact, had the opposite language that you are averting

to, and that is at page 694 F.2nd 928, where the Court

said, "The test is essentially whether the fee schedule

represents a charge within the range of what would have

been negotiated at arm's-length in the light of all the

surrounding circumstances."

49



50/61


51/61

Official - Subject to Final ReviewOfficial - Subject to Final Review

address12:19 10:16,20 34:18 approve28:10 assets12:21A12:20 13:4 amounts22:1,3 approved24:19 13:16able21:7

advice7:5 10:1 analogy27:21 28:11 Assistant1:17above-entitled21:22 analysis39:20 area36:11 Associates1:61:11 50:18

adviser3:13,24 analysts48:15 arguing30:1 3:5absence35:106:2 7:20,21,23 analytics7:25 50:3 assume17:12absent6:5 7:228:6 10:1 11:6,8 announce45:5 argument1:12 28:16,17 40:22absolutely45:2311:11,18 13:14 answer11:16 2:2,10 3:4,7 assuming25:9abstract20:1516:22 17:1,9 29:22 38:23,24 14:22 15:18 attached31:2025:1217:15,18 18:14 39:2,4 42:15 18:4 27:25 attempting23:3accept17:2,619:12,25 23:14 answers39:6 33:18 34:22,23 attention4:1442:1827:18 28:7 apparently 47:18 35:19acceptable33:22 36:19,21 18:24 arms-length attract11:1,323:1836:21 37:5 appeals23:11 41:20 attributed34:16account39:1345:12 47:11 33:6,9,11 38:7 arm's15:25 authority20:1940:16

advisers21:10 49:10 16:5 19:18 20:22accounted46:322:2,3 36:12 appear23:7 20:8 23:16 average10:2,446:4,1336:18 35:3 44:10 25:7 30:2 49:1,2,5,6accounting46:3 adviser's18:11 APPEARAN... 35:24 36:3 averages47:9accounts8:222:9 1:14 42:20 averting49:2036:14,16,19

advising11:2 appeared15:21 arm's-length aware4:1140:7,8 44:2,6advisor16:5 appendix22:5 3:24 4:4,18,22 17:21 21:8,1144:22 46:23,25advisors40:4 33:20 43:14 5:24 6:5 7:22 21:1348:9,13advisory4:3 48:1 8:4 12:5 15:10 a.m1:13 3:2accreted12:21

40:15,16,17,17 apples34:17,18 15:16,20,22 50:17accurate34:24advisor's36:15 34:19 48:19,19 18:12 19:1145:13

Badvocating25:5 application 25:9,23 26:11accurately38:4back10:9,16affect13:14 20:3 33:14 27:17 28:23achieve10:21

20:6 27:5 35:1affirm33:10

applications41:24 49:13,17achieved3:21 39:17,20 45:21affirming45:9 6:25 49:24 50:135:24 19:23

49:8ago14:13 applied4:19 arm-length20:9 50:12backgroundagree9:16 24:23 5:17 6:8 33:6,9 42:13acknowledge

46:1835:8 40:8 45:3 array44:539:3 42:23balance17:2541:25 apply9:14 33:12 arrived25:24act3:12 4:13bargain19:18agreement 41:12 42:25 26:1128:9,24

19:19 20:715:10 45:5,8 art19:3,13 26:4action3:12 9:1725:3agrees45:16 applying4:1,16 27:1114:9,18 25:6

bargained29:14AL1:3 appointed6:2 articulation25:25 29:1,2,330:8 36:2allegation45:12 37:10 15:1529:5,22,2342:20 44:24allocated46:5 approach35:2,4 asked6:2530:3,5 35:9

bargainingallocating8:1 appropriate 35:18 36:10actionable25:1518:12 19:11amended3:11 8:14,21 24:4 37:24 46:16actual25:1620:8 23:16amendments 30:22 45:2,10 asking42:24add11:2325:24 26:114:12 appropriately asks24:20 38:11added29:1627:17 41:20,24amicus1:19 2:6 24:20 aspect49:3adding29:1642:135:15 18:6 22:6 approval22:13 assertion40:14additional12:1

basic5:6amount8:17 24:15 asset11:734:14 48:20,2251

Alderson Reporting CompanyAlderson Reporting Company


52/61


53/61


54/61


33:16 34:4,5 everybody factors24:22 26:10 28:11,14E36:7 37:25 45:16 failing18:13 32:25 36:6,12E1:17 2:1,5 3:143:10,11 44:9 everyone's fair3:21,23 4:8 44:1,1,213:1 18:445:3,10 47:24 15:18 4:9,17 5:9,9 46:18 47:8earlier11:16

divergence21:9 evidence8:15 6:12,21 7:7 48:21 49:2,635:18 36:10doing31:14 17:21 18:13 9:25,25 14:23 fell20:7 28:21early27:5Donovan1:21 22:15 48:2,17 14:24,25 15:3 fiduciary3:13earmarks6:4

2:8 27:24,25 evidently9:13 15:6,9,16,25 3:16,20 4:6,1019:1828:2,25 29:3,5 exactly12:13 16:16,17,20,21 4:18,20,23,25Easterbrook29:12,18,20 examinations 19:19 21:23 5:3,4,5,11,1533:12 35:730:4,24 31:4 21:18 30:2 31:6 35:5 6:7,7,9,17 8:339:22 40:6,1031:13 32:3,6,9 examined12:3 35:22,23 40:23 9:10,19,21,22economies12:2332:12,19 33:7 example32:21 47:4,4 11:15,18,2445:1433:11,15 34:3 32:25 37:14 fairly36:2 44:20 12:2 16:10,13education21:634:11,23 35:7 45:25 44:24 16:18 18:10,19effect25:1435:14,17,25 excess11:12 fairness5:12,17 18:22,23,24either41:1536:18 37:3,18 excessive11:11 7:20 27:1 19:2,7,10,23elaborate12:137:21 38:15,18 13:8,11 22:9 faith16:15 20:2 25:13employees14:438:25 39:7,14 24:8 falls23:17 25:23 26:4 27:2,6,7enacted4:1239:19 40:5 excluded40:1 far30:7 31:22 27:11 29:10encompasses41:1,9,25 42:4 excuse34:5 31:24 32:1 47:12 49:9,1049:742:9,18 43:9 exists19:11 40:20,25 44:16 49:15encouraging43:15,18 45:20 expense7:2 44:23 figure26:2321:3

double10:4 expenses7:15 fee3:21,23 4:9 file20:22energies21:324:24 25:2 expert46:3 4:17 5:12,18 filed20:24,25engage22:2432:4,7 expire47:13 6:25 7:21 9:1 Finally46:1523:16

doubt30:4 explained19:22 10:1 11:8 find12:13 19:1entire14:10,20draft21:24 24:16 26:20 12:19 14:23 47:2224:17draw

23:3 36:24 15:3,24 16:10findings

47:21entirety22:6drew19:13 explaining8:8 16:12 17:2,6 fine19:4entities21:23due30:18,25 extent40:2 17:16 18:11,25 fire5:25 7:19entitled10:12

31:10 extra11:23 20:6 25:7,20 16:5,25 17:1equally48:13Dumont5:14 eyes35:11 26:19 28:11,18 17:15,15,17erected28:15duties6:7 28:18 29:7,12 first3:4,19 4:5erred18:13

Fduty3:13,16,20 29:23 30:2,7,7 28:9,13 30:11ESQ1:15,17,21fact8:13,15,214:6,10,20,25 30:15 33:23 30:16 32:192:3,5,8,11

8:25 10:85:11,15 8:3 35:5,23 41:16 40:9,9 41:3essence50:212:18 18:169:19,21,22 44:4,16 46:21 43:2 47:3essentially13:2024:18 32:1311:24 12:2 46:22 49:22 flaw29:21,2349:2233:19,25 35:116:10,13,18 feel31:11 30:6 31:21establish20:536:7,11 40:1218:10,23,25,25 fees6:21 7:3,6,8 flaws44:12established42:21 44:10,1119:10,23 20:2 7:17 10:4,16 flip50:919:1345:18 47:22,2420:5 25:6,13 11:11 12:13 float50:7ET1:349:2026:4 27:2 13:8,11 16:13 flowing25:16evaluating7:20

factor10:1229:10 47:12 18:21 20:11 focus19:24evaluation39:12,14 40:349:9,15 21:4,9 22:9,13 focuses5:1228:2040:4D.C1:8,15,19 24:19 25:15,23 followed25:1events43:22

54



55/61


56/61


57/61


50:18 mutual8:7 nub16:2 ought41:12 pension11:2matters45:15 10:22 11:2 number13:16 outperform 23:4mean5:3 7:2 12:22 13:17 34:15 10:17 pensioners11:4

9:14,22 11:25 22:2 23:18 numerical32:13 outside18:11 people13:712:14 24:10 28:6 32:13,14 25:23 29:13,16 37:16 38:12

O26:23 27:12 32:21 36:23 30:2,7 32:16 pepper4:7,16O2:1 3:136:21 37:24 39:25 40:3,8 32:17 35:24 15:9 16:16Oakmark13:2439:10 40:21,24 40:10,17 46:21 42:19 19:14 20:7object42:241:15 47:2,5 48:8,12 outsider16:23 27:1,14,20objection39:9meaningless 48:21 over-reached percent10:3,5

39:16,19,1914:23 31:8,12 47:11 10:18 13:18N objective32:22meant9:23 owes8:3 32:1,1

N1:3 2:1,1 3:1 48:1026:22 percentage4:2Pnarrow26:7 objectives19:24measure35:22 perfectly38:24

narrower26:10 36:13 44:3 P3:135:22 performancenature29:11 obligated24:13 pack17:18mechanisms 10:8,9,11,22necessarily26:4 obligation6:18 page2:2 33:2021:17 47:8 49:2,5necessary

45:16 obtaining

12:22 34:3,5 43:10meetings8:1 period49:4,7need25:21 49:17 43:11,20,24members6:3 person4:17 41:6

44:25 occasion45:4 44:9 46:17,2128:18 47:11negative50:10 occurred45:17 47:24 48:5memorandum petition43:16negotiate30:19 odd19:6 49:2119:21 22:4 43:17,19negotiated officer4:24 5:21 paid22:25 34:20mention45:14 petitioners1:4

28:19 45:24 6:11 37:15 44:1mentioned22:7 1:16,20 2:4,746:6 49:24 officers11:19 parametersmet25:22 2:12 3:8 18:7

negotiating Oh17:11 10:25metric10:11 18:16 19:1416:16 44:14 okay35:5 38:16 Pardon33:7mind14:23 22:15 44:4,12

negotiation3:22 42:15 part7:2 9:1637:15,17 45:12 47:1915:4 44:13 once15:25 15:18 26:25minutes

47:16phrase

9:2146:9,9 ones47:3 27:2 29:10misrepresenta... picking50:2negotiations operating49:12 36:346:13 picks17:9

6:14 28:6 operations particular15:20misrepresenta... plaintiff25:22neighbor's 36:15 22:9 28:1846:1 44:3 45:24

38:10 opinion34:6 34:9modifications 50:10new17:18 49:10 37:25 38:17 particularly9:17 plaintiffs8:15non43:7 43:10,19 44:9 23:5 45:14Monday1:9 23:3 32:9 39:1nonexistent opposed47:5 parties15:22money8:18 10:9 46:3,11,24

47:23 opposite49:20 23:7 44:1910:15 12:8,17 plans13:19nonmaterial oral1:11 2:2 3:7 parts43:523:4 38:12 please3:10 18:1

47:25 18:4 27:25 passively32:2448:24 18:9 28:3normal7:21 9:7 oranges34:19 pay7:4,4 13:8morals49:12 point4:5 10:19

10:4 25:8,8 34:20,21 15:24 24:24morning3:4 11:9 12:2337:20 40:24 order13:25 44:6 37:11,12,16Morningstar 23:2 24:17

Normally9:9 ordinarily9:17 40:412:14 28:4 46:24notices34:6 40:7 50:10 paying15:3mows38:10 49:8November1:9 ordinary9:14 35:19multiple32:25 points5:14novo30:14 ostensible46:1 payment34:1444:5 22:12

57



58/61


pool11:7 18:11 R3:1 49:16 47:1portfolio12:8 proof9:20 15:19 range18:12 recognizes43:1 requires3:21

48:6 42:6,22 20:8 23:17 record8:6 13:19 17:13 37:7position25:19 propose33:14 25:10,23 26:2 17:21 33:19 research7:24,25

41:7,11 proposition 26:5,7,10,23 36:22 40:11,12 48:11,14,15positions35:20 42:18 29:13,17 30:2 40:13 43:5 reserve17:25possible18:23 protect13:5 35:24 40:20 44:18 45:24 resources21:3practical17:7 14:10 49:23 46:16 47:7,10 respect3:14 4:5precedent3:20 protecting14:14 rare45:5 48:19 5:11 11:24precisely6:5 14:15 rata11:13 recording47:20 16:13 20:2

37:3 39:7 protection11:10 rates20:14 recovery14:19 36:3 41:11presented22:15 protects13:9 23:21 24:7 refer44:5 43:25 45:25president27:7 prove9:10 50:9 40:25 references5:11 respects9:19

27:10 50:11 rate-setter referred22:5 Respondentpresumption provide3:12 42:16 27:1 30:13 1:22 2:9 3:16

31:19 7:24 11:10 reached35:6 referring19:15 3:17 23:8 28:1pretty38:20 14:18 24:17 46:5 reflective15:9 Respondent's

50:3 45:13 read30:22 35:2 regardless10:17 41:11price15:25 16:7 provided8:9,10 41:15 regrettably responsibility23:15 24:24 8:11,16 43:21 reading15:4 40:10 28:10 30:1125:2 43:22 48:22 really28:21 regularity31:19 43:1

primarily21:2 provides18:15 reason10:22 regulate20:14 rest46:2principle7:23 providing4:3 29:8,14 30:12 regulation20:11 result4:8 5:9,9pro11:12 12:8 49:18 31:4,18,20 regulations 6:13,22 16:16probably41:5 proving22:8 33:16 41:2 20:12 16:17 36:2probative25:1 25:22 42:5,5,21 relationship 46:6problem12:20 pulling35:10 reasonable7:15 14:24 41:18,22 results37:13

13:4 17:23 pull-out46:20 9:11 16:10,12 41:23 return14:518:20 38:16,18

punctilio49:11 16:12 18:21,25

relevant10:8,12

returned11:12procedural push12:12 20:6 25:20 22:8 23:5,9 reversed3:19

19:24 put37:9 26:19 31:7 27:21 38:19,22 reverses42:22process25:1 puzzling19:1 41:18,22,23 39:13,15,17,18 reversing37:25

28:22 29:9,11 42:12,12,14,19 40:3,4 50:1Q29:21,23 30:1 44:17 47:4,4 remaining13:8 review6:20 7:6

question7:1030:6 31:21 47:10 47:17 9:25 30:9,1510:11 16:9,2035:4,22 40:23 reasonableness remand8:22 reviewing37:2425:8 27:4,544:13 6:25 19:23 33:13 43:6 38:1,1,629:20 30:10process-orient... 26:15,17,20,22 44:25 right6:18 10:2537:6,7,2042:23 26:24 render43:6 12:15 14:1738:23 39:2produce15:10 reasons3:18 rendered41:18 15:11,14 16:2341:3 46:1515:17 18:12 30:15 40:11 represents 17:2 23:22

questions24:21product41:19 REBUTTAL 49:11,23 24:6,20,21,2550:641:24 42:13 2:10 47:18 reprinted22:5 29:19,25 36:1

quite11:21 19:1Professor5:14 receipt20:2 require36:14 39:8 50:839:6,18profitability receiving34:14 37:6 rise29:1

45:15 46:2 recognized14:8 required12:12 risk33:2R

prohibits7:17 17:23 21:25 15:6,23 36:6 ROBERTS3:358



59/61


7:1,11 9:24 seconds13:2 48:4,22 49:18 16:8,19 24:23 stop15:1510:14,24 12:10 second-guess set37:11 38:8 25:4 26:1 stripe32:14,2012:24 14:2,12 30:12 setting37:16 28:16 29:2,4,7 structural27:1618:2 20:10,18 second-guessed 38:7 40:24 29:9,15,19,25 28:623:20 24:2,6 31:17,21 Seventh3:15,18 34:13,25 35:12 study37:827:22,24 31:23 section18:10 15:2,21 25:13 35:15,20 48:18 style32:2232:4,7,11,15 20:22 21:17 35:2 39:22 source31:14 submission8:640:19 41:5 22:11,21 24:17 40:5 speak38:4 18:2447:15 48:25 28:15 29:6,22 share48:13 special11:15,20 submit4:1450:15 30:14,16 shareholders 11:25 18:19 submitted8:15

rules36:8,11 securities33:3 21:6 27:20 19:4 19:22 50:16,18SEC's36:11 shift19:22 26:20 specifically20:1 substance42:10

S see30:19 32:16 shifting19:24 square11:21 42:11 44:13S2:1 3:1 32:17 39:5,23 show8:25 stage23:8 substantial33:2salutary20:3 42:12,15 43:20 showing50:11 standard3:16 33:4 34:15satisfied37:13 47:12 side34:2 4:1,6,11,14,16 substitute41:4saying15:2,7,21 sees13:12 significant 6:8,9 11:18 subtle16:11

16:1 24:7 segment26:6 13:22 15:15 18:21 suffer13:2426:18 31:24 segments26:8 similar3:25 19:17 26:14,14 suffers13:734:17 38:17,19 self-contained 4:21 16:22 36:1 38:7,8 suggest32:1240:2 42:7 21:21 32:20 36:13 41:12 42:25 45:1,9 47:5

says23:22 28:20 sell16:6 44:2 48:3,6 45:3,8 49:16 suggesting34:2 35:4 36:4 selling23:14 similarity48:18 standardized 10:16 20:1948:15 send39:17 simply8:1 11:7 26:9 suggestions

scale12:23 sending39:20 12:7 23:16 standards5:4 45:2345:14 sense4:24 10:25 24:14 48:23 stand-alone suggests21:20

Scalia6:15,17 11:15,20,25 single20:6 25:5 40:13 45:26:20,24 9:6,9 18:19 19:4 26:19 start15:1,11 suit14:199:13,16 13:9

20:13,16 28:23situation

8:23 43:9suits

20:2216:24 17:5,8 40:21 41:2,8 43:1 started29:1 21:1517:11 21:8,14 41:10 size30:15 stated19:17 summary3:1521:19 25:18 sentence41:14 skill11:6 23:9 8:14 23:8 34:130:20 31:2,8 41:15 skirting15:19 statement16:25 47:2133:5,8,13,24 separate30:5 small49:3 44:3 sums12:2134:8,12 36:17 48:20 smaller26:12 States1:1,12,19 supervision43:4,13,17 separately34:21 solicitor1:17 2:6 18:5 38:1344:8 46:16 services3:25 4:3 35:21,25 39:1 status27:2,6,7 supplied43:12

schedule49:22 4:21 8:9,10,11 41:7,10 45:1 27:10 supporting1:20scope26:2 8:15,24 12:5,6 somebody14:13 statute7:17 2:7 18:7SEC4:13 19:21 16:22 18:15,17 something's 11:10,23 14:1 Suppose37:10

20:12,13,19,22 23:6,7,10,14 13:13 17:13 20:1,21 supposed10:621:1,11,20,24 26:8 33:18,21 sorry32:6 38:1 21:25 23:20 Supreme1:1,1222:6 26:19 33:23 34:2,6 43:15 46:17 30:16 42:22 sure7:7,9 36:1636:8 37:5 34:15,16 36:19 sort15:4,18 statutory5:11 37:18 39:9

second3:23 36:25 40:7,16 24:22 40:24 STEVENS27:4 44:18 45:422:18 30:7 40:18 41:18 Sotomayor stock48:8 surely10:1440:2 50:8 43:12,21 46:19 14:21 15:11,14 stocks8:1 10:21 17:2 33:24

59



60/61


49:14 18:18 19:5,9 33:22 35:11,19 usually40:9 work17:19surprised26:22 19:12,20 20:3 37:4,21 44:15 utterly31:12 48:13surrounding 20:16 21:1,21 trying11:1,1,3 wouldn't7:6

V49:25 22:10 24:12,19 13:4 16:2 37:1 20:19 25:15v1:5 3:4 4:7systematic22:1 24:25 25:14 42:11 37:17,19 38:8

19:14 20:726:3,6,16,24 turn41:25 42:2 Wow31:2T 27:2,2027:6,9 28:20 turned42:1,4,21 wrong13:13T2:1,1 value15:331:13,16 32:19 twice4:2 8:3 40:2 50:14

take12:17 39:13 varied43:2133:15 34:21 10:23 34:18X46:24 various5:1635:7 37:1,24 49:17

taken33:2 7:16 20:12 x1:2,737:25 38:6,21 two5:7 15:5takes13:2 15:3 view46:2440:5 41:10 16:14 30:5

Y44:6 virtually4:342:1,4,20,22 32:22 36:4Yeah37:19talking23:2 voice41:1645:20 50:13 types33:2year37:1234:8,9,11 vote28:18third4:1years10:3 49:7U35:12 43:14 thought11:17

W York49:1048:23 ultimate19:1718:23 35:5walk16:5,7,23

tax13:23,24 44:1550:1 $want6:6 15:24technological ultimately13:10three3:18 43:25

$50,00037:1233:9,25 34:112:10 unaffiliated47:16warrant9:1tell11:17 17:14 18:15 22:4time13:23 14:4 0Washington1:818:20 32:16 23:1514:6 17:25 08-5861:5 3:41:15,1834:4 46:20 understand4:1947:12wasn't14:13tells31:9 7:9 16:25times32:23 1

20:5 23:5 34:8term18:19 19:3 29:20 41:7today36:4 1010:18 32:134:1019:7,9,13 26:3 understandingtold14:12,13 10:041:13 3:2

way4:19 9:1727:11 41:8tone41:16 42:7 10:5750:1726:17 32:17terms4:2 7:18 understood15:242:15 16a34:5 43:1040:22 41:158:9 12:11 17:7 unfair15:1 25:3touting

12:6 43:11,13,1842:15 46:535:13,23 unfairness7:18transaction5:24 16133:20 34:4ways5:10test5:19 19:16 unique14:96:5 7:22 12:5 46:17weigh22:12,1320:7 22:10 United1:1,12,1915:17,20 16:1 1743:24weight24:1525:13 33:5,8 2:6 18:516:6 25:9 27:3 17a43:10

37:933:12,14 44:15 unlawful41:2128:23 30:3 17146:21went50:944:24 45:5 unnecessary35:24 182:7weren't37:149:22 43:6transactions 1960s21:25We're38:1testimony48:7 unpackage3:25 4:4,18 196919:21,22

48:2348:12 14:21translates5:9 22:4 26:20wonderfullytext20:1 22:21 unreasonabletrial47:6 19703:11 4:12

30:20Thank3:9 18:2 7:18triple10:5 198021:1,16wool35:1127:22,23 47:14 unusual33:3true6:19 9:12 word5:3 14:2247:15 50:15 38:20 216:14

19:1,8thing42:24 50:4 upheld3:15trust9:7,14 21:9words11:23things22:15 upside42:1,1,333:21 2X44:4

12:1 31:2427:13 36:4 42:5,21trustee5:2 6:10 20091:935:10,13 40:2144:20 46:1 use19:1,7,8 50:750:5,5 2613:1741:25think10:15 uses19:3trustees28:12 272:9

60



61/61


332:43013:230a47:2432a44:932(a)45:223513:1836(b)18:10

20:23 21:1724:17 28:1529:6,22,2330:6,10,1435:10

36(b)(1)42:536(b)(2)22:12

22:21 30:1643:2

36034:54

401(k)13:19401(k)'s14:3472:12

5510:3,35010:5 32:150548:1150648:1151248:751348:1451448:14

6648:565048:569449:21

88,00047:5

992849:21

Documents

Fiduciary Duty Sup Ct 4 13 2012