Vanguard founder John Bogle has filed a blistering amicus brief with the Supreme Court in the case of Jones vs. Harris Associates, the blockbuster lawsuit that could reshape how and how much mutual funds charge investors.

The case was first brought in August 2004 by investors in the Oakmark funds, which are managed by Harris Associates. The plaintiffs argued that the fees charged for managing the funds were excessive, and more importantly, that the board of directors that approved the funds’ management fee was not sufficiently independent.

The argument noted that the fees Harris charged separately managed accounts for the same management services were half as much as the fees paid by retail investors in the Oakmark funds, according to reports from Jason Zweig of the Wall Street Journal.

The Investment Company Act of 1940 requires that the boards of directors for mutual funds act with a “fiduciary duty” when negotiating compensation contracts with mutual funds managers. In his brief, Vanguard founder and index industry legend John Bogle argues that mutual fund boards of directors are often less than independent and do not have the ability to negotiate contracts at arm’s length.

“In negotiations over compensation, the fund’s board (if it were inclined to try to strike a hard bargain) does not have available the key option that is ordinarily available to a firm that wants to contract for goods or services: finding another contracting partner if the price asked is too high.”

In other words, fund boards can’t simply dismiss the managers of a fund. Because they can’t walk, the boards are captive to pressure to approve higher fees.

Bogle argues that this conflict in part explains why mutual fund fees have remained stubbornly high despite the massive growth in fund assets under management:

“The explosive growth in mutual fund assets has only exacerbated the problems [the Investment Company Act originally sought to address]—conflicting loyalties of investment advisers, the failure of advisers who are paid on a percentage of assets to share the enormous economies of scale that exist in fund management with fund shareholders, and advisers that charge captive mutual funds much higher fees for the same services than are charged to independent clients.”

The Supreme Court will hear oral arguments in the case this fall.

Joining Bogle in filing amicus briefs supporting the plaintiffs are the AARP, the United States government and the Consumer Federation of America. The list of groups filing briefs in support of the respondent include the Investment Company Institute, the CATO Institute, Fidelity and the U.S. Chamber of Commerce.

You can read Bogle’s brief in full here.