On June 29, 2015, Justice Eileen Bransten of New York Supreme Court granted Goldman Sachs Group Inc.’s (“Goldman”) motion to dismiss a cause of action for negligent misrepresentation but denied Goldman’s motion to dismiss causes of action for fraud. IKB Deutche Industriebank AG (“IKB”) had sued Goldman over losses that IKB suffered after it purchased $73.2 million in RMBS. IKB filed the suit in September 2012, alleging that Goldman fraudulently induced IKB to purchase the RMBS by providing offering materials for the RMBS that misrepresented or omitted details about underwriting standards, loan-to-value ratios, occupancy rates of the mortgaged properties, and credit ratings. Goldman sought dismissal on the grounds that IKB’s claims were time-barred, that IKB lacked standing to sue, and that IKB’s allegations failed to state a claim.

Justice Bransten found that it would be premature to determine whether IKB was a proper party before conducting discovery. She rejected Goldman’s argument that IKB filed the case after the three-year German statute of limitations for fraud had run, finding that the claims accrued in Luxembourg, not Germany. Accordingly, Justice Bransten determined that New York’s six-year statute of limitations—not Germany’s—applied and that Goldman had not argued that the claims were time-barred under that longer period. Justice Bransten dismissed IKB’s claim for negligent misrepresentation, finding that IKB’s allegations did not describe the necessary special relationship between the parties, but rather an ordinary arms-length relationship. Finally, Justice Bransten held that IKB had sufficiently pleaded its fraud claims. Order.