WASHINGTON – The Supreme Court on Tuesday rejected a standard that investors say would have made it almost impossible to sue over “excessive” fees on mutual funds, a popular investment vehicle for millions of Americans.

Even so, the high court endorsed a standard that has been used once before to throw out this particular lawsuit, which was brought by investors against a mutual fund company over excessive fees.

Justice Samuel Alito, writing for the court in a unanimous decision, said the 7th U.S. Circuit Court of Appeals in Chicago should have applied the widely used standard set by the 1982 case Gartenberg v. Merrill Lynch Asset Management.

To face liability under Gartenberg, “an investment adviser must charge a fee that is so disproportionately large that it bears no reasonable relationship to the services rendered and could not have been the product of arm’s length bargaining,” Alito said.

Instead, the 7th Circuit made up a new standard it used to throw out the case. The court sent the case back for the lower court to apply the earlier Gartenberg standard.

However, that does not bode well for the plaintiffs, because the original federal judge who heard the case threw it out using the Gartenberg standard.

Mutual funds have become a popular way for Americans to invest, with more than $10 trillion in assets placed in mutual fund vehicles such as 529 college education plans or 401(k) retirement plans. The higher the adviser fees, the less money goes into the mutual fund for investors.

In the case decided by the high court, Jerry N. Jones, Mary F. Jones and Arline Winerman sued Harris Associates L.P., which advises on the Oakmark complex of mutual funds. The plaintiffs, who own shares in several Oakmark funds, say that Harris’ fees are so high they violate the federal Investment Company Act, which is supposed to combat excessive investment adviser fees.

The federal judge who originally heard the case threw it out, saying the plaintiff had not shown the fees were so disproportionately high they bear “no reasonable relationship to the services rendered.” The appeals court agreed but rejected the Gartenberg standard.

Instead, the 7th Circuit said such lawsuits cannot be brought unless shareholders can prove the adviser misled the fund directors who approved the fee.

The Securities and Exchange Commission called the decision “welcome news for mutual fund investors, who can continue challenging fund fees they believe to be excessive.”

But the mutual fund industry also called it a victory.

“For 30 years, the industry has been measuring itself against the so-called Gartenberg standard that says fees are appropriate unless a plaintiff proves they are so disproportionate they could have not been bargained at arm’s length. The Supreme Court has now made that the law of the land,” said John Donovan, a Harris Associates attorney.