Two law firms lost a case for their clients and then found themselves subject to $1.5 million in sanctions imposed against them by a federal judge for reckless pursuit of claims through trial in a case that “lacked merit.” But, in a divided opinion, the U.S. Court of Appeals for the 10th Circuit has reversed the district court order, finding that the judge overstepped.

Law firms, Schlichter Bogard & Denton and Schneider Wallace Cottrell Konecky, represented individual shareholders and an employee retirement plan in a lawsuit that claimed an investment company, an investment adviser, and a recordkeeper servicing their mutual funds charged excessive fees. The suit, filed against mutual fund company Empower, alleged that the alleged conduct was a violation of the Investment Company Act, according to the opinion.