N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
THOM AS J. KENNIS,

Pla i ntiff-Appe lla

nt,
v. M ETR OPOLITAN W EST ASSET M ANAGEM ENT, LLC ,

De fe nda nt-Appe l le e . No. 19-55934 D.C . No. 2:15-c v-08162-GW -FFM
M EM O R ANDUM *

Appe a l from

the Unite d

Stat e s Distric t C ourt for the C e ntra l Distric t of C a lifornia Ge orge H. W

u, Distric t Judge , Pre siding Subm itte d August 31, 2020 ** Pa sa de n a , C a l ifornia B e fore : IKUTA a

nd B ENNETT, C irc uit Judge s, a nd W OODLOC K , *** Distric t Judge
. 

# FIL ED
SEP 17 2020 M OLLY C. DW Y E R, CLERK U. S. CO URT O F APPEALS

* This disposition is not a ppropria te for public at ion a

nd is not pre c e de nt e xc e pt a s provide d

by Ninth C irc uit R

ule 36-3.

* * The pa

ne l una nim ously c onc lude s this c a se is suita ble for de c ision without oral a

rgum e nt. Se eFe d. R . App. P. 34(a)(2).

* * * The Honora

ble Dougla s P. W oodloc k , Unite d State s Distric t Judge for the D istric t of M a s sa c huse tts, sitting by de signa tion.Thom a s Ke nnis, a sha re holde r in the M e tW e st Tota l R e turn B ond Fund (the Fund), a ppe a ls the distric t c ourt’ s ruling tha t M e tropolita

n W e st Asse t M an a g e m e nt, LLC (M e tW e st) did not bre a c h its fiduc i ary duty unde r se c tion 36(b) of the Inve s tm e nt C o m

pa ny Ac t of 1940 (IC A), 15 U.S.C . § 80a -35(b). W e have jurisdic tion unde r 28 U.S.C
. § 1291. W e c onc lude tha

t the distric t c ourt did not c le arly e rr in finding tha

t Ke nnis fa ile d to c arry

his burde n of showing tha t M e tW e st c ha

rge s the Fund “ a

fe e tha t is so disproportiona

te ly la rge t hat it be ars no re a sona

ble re lat ionship to the

se rvic e s
re nde re d a

nd c ould not ha

ve be e n the produc t of a

rm ’ s le ngth ba

rga ining.” J

one s
v . Harris Assoc

s. L.P. , 559 U.S. 335, 346 (2010). We the re fore a ffirm
. The distric t c ourt did not c le arly e rr in finding tha t M e tW e st provide d the Fund with signific ant ly

gre ate r se rvic e s tha

n it provide d the funds for whic h it
se rve d a s a

suba dvisor (theSuba dvise d Funds), inc luding m a inta ining theFund’ s
ne t a sse t va lue an d liquidity , e nsuring c om plia nc e with le ga l re q

uire m e nts, a

nd
a ssisting the

B oa rd, am ong othe r things. Nor did the distric t c ourt c le a

rly e rr in finding tha

t M e tW e st inc urre d

gre ate r risks for theFund tha n for the Suba dvise d Funds. Ke nnis’ s a

rgum e nt tha

t the distric t c ourt c re d ite d M e tW e st with providing
se rvic e s tha

t we re a c t ua lly provide d by B NY M e llon Inve s tm e nt Se rvic ing (US) Inc
. (B NY) is not supporte d by the re c ord. B e c a

use M e tW e st ne ve r c ha

rge d the
2Fund for re im burse m e nt unde r the Supple m e nta l Adm inistra tion Agre e m e nt, the
a gre e m e nt she ds no light on the que stion whe the r M e tW e st c ha rge s disproportiona

t e ly la rge fe e s . And be c a

use the distric t c ourt found tha t the “ nature
and e xte nt of the se rvic e s re quire d by [the Fund a

nd the Suba d

vise d Funds] diffe r sha rply ,” the c ourt re a s ona

bly re je c te d a ny c o m pa rison be twe e n the fe e s c ha rge d to the Fund a

nd the Suba dvise d Funds a s “ not proba tive .” J one s , 559 U.S. a

t 349–50 (c ita tion omitte d). Nor did the distric t c ourt c le arly e rr in re je c t ing Ke nnis’ s othe r argum e nts. While the re c ord c onta ins m ixe d e vide nc e (inc luding c onflic ting e xpe rt re ports a nd te stim ony ) on Ke nnis’ s a

rgum e nt tha

t M e tW e st e xpe rie n c e d sa vings re sulting from the Fund’ s growth in a sse ts unde r m ana ge m e nt, the distric t c ourt did not c le arly e rr in c o nc luding tha

t M e tW e st ha d not profite d from “ e c o nom ie s of sc a le ,” J

one s , 559 U.S. a

t 344 (c ita t ion om i tte d). The re c ord a lso supports the distric t c ourt’ s findings tha

t the B oa rd’ s proc e s s wa s robust a

nd tha t M e tW e st did not withhold
m ate ria l inform ation from the B oa rd. 1 Fina lly , the distric t

c ourt did not err in its
a sse ssm e nt of the B roa dridge pe e r data ; the data supporte d M e tW e s t’ s c la i m tha t

1 The IC A doe s not re quire the B oa rd to ne gotia

t e for a lowe r fe e ; the B oa

rd ne e d only c onside r the re le va

nt fa c tors. Se eJ

one s v . Harris Assoc

s. L.P. , 559 U.S. 335, 351 (2010). 3its fe e s we re re a sona ble , but thec ourt ga

ve the data

“ no m ore and no le ss” we ight

“ tha n the we ight it de se rve s.” 2 AFFIRM E D.

2 The re c ord supports the

distric t c o urt’ s de te rm ination tha t Profe ssor John C oate s wa s qua lifie d to te s tify a s a n e xpe rt; the re fore , the c ourt did not a buse its disc re tion in a dm i tting his te stim ony . Se e Fe d. R . Evid. 702; Unite d State s v . Hank e y , 203 F.3d 1160, 1168 (9th C ir. 2000). M ore ove r, Ke nnis’ s obje c tion to the te stim ony wa s not time ly

unde r the distric t c o urt’ s sta nding orde r. Se e Fe d. R . C iv. P. 16(c )(2)(D), 83(b). 4