After suffering a stinging appellate court defeat in New York, Goldman, Sachs & Co. has turned to the U.S. Supreme Court to reverse its loss. Relying on a team that includes Gibson, Dunn & Crutcher partner Theodore Olson and Boies, Schiller & Flexner partner Jonathan Schiller, the bank has filed a petition for certiorari in which it asks the justices to review a ruling by the U.S. Court of Appeals for the Second Circuit that expanded the class of investors that can bring securities class action claims against mortgage-backed securities offerers.
The Second Circuit found in NECA-IBEW Health and Welfare Fund v. Goldman Sachs, 11-2762-cv, that plaintiffs have standing to raise class claims on offerings where they did not purchase the actual certificates in question, so long as they purchased certificates backed by loans from the same originators as the ones in the litigation. The decision stood in stark contrast to a string of cases in which judges threw out or limited mortgage-backed securities cases against major financial institutions due to strict standing requirements (NYLJ, Sept. 10). The ruling was a huge victory for lead plaintiff NECA-IBEW Health and Welfare Fund, which is represented by Robbins Gellar Rudman & Dowd. Goldman was defended by Richard Klapper of Sullivan & Cromwell before the Second Circuit.
