## Facts

- Frank J. Evangelist, Jr., a shareholder of Fidelity Cash Reserves, sued the fund and its investment adviser under § 36(b) of the Investment Company Act of 1940, 15 U.S.C. § 80a-35(b).
- He alleged the adviser’s compensation was excessive, constituting a breach of fiduciary duty “in respect of” advisory compensation.
- Evangelist demanded a jury trial on the § 36(b) claim.
- A separate misrepresentation claim in the broader action was resolved against Evangelist on summary judgment, leaving the § 36(b) claim for adjudication.
- The district court held the § 36(b) claim was equitable rather than legal and denied a jury trial.
- Evangelist sought a writ of mandamus from the court of appeals directing the district court to grant a jury trial.

## Issues

1. Whether a shareholder’s § 36(b) excessive-advisory-fee claim is an action “at law” triggering a Seventh Amendment jury-trial right or an equitable fiduciary-duty/accounting claim to be tried to the court.
2. Whether mandamus is an appropriate remedy to correct the district court’s denial of a jury demand in this context.

## Decision

- The First Circuit denied the petition for a writ of mandamus.
- The court held Evangelist had no right to a jury trial because a § 36(b) claim is basically equitable in nature.
- The court treated the remedy as restitutionary and accounting-like (disgorgement of excessive fees), not traditional legal damages.
- The court agreed with interpretations treating § 36(b) actions as judge-tried fiduciary-duty cases.

## Legal Principles

- The Seventh Amendment jury-trial right applies to “suits at common law,” not to claims that would historically have been heard in equity.
- Statutory labeling of relief as “damages” is not controlling; courts classify the claim by its historical analogue and the nature of the remedy Congress created.
- A claim alleging breach of fiduciary duty regarding compensation, seeking recovery of excessive fees, is analogous to equitable accounting/restitution between beneficiary and fiduciary.
- Section 36(b) creates a fiduciary-duty cause of action concerning advisory compensation that is generally equitable and therefore not triable to a jury.

## Conclusion

The First Circuit refused to compel a jury trial, concluding that § 36(b) excessive-fee litigation is an equitable fiduciary-duty/accounting action and thus falls outside the Seventh Amendment’s guarantee of a civil jury trial.


In re Evangelist, 760 F.2d 27 (1st Cir. 1985)