The opinion of the court was delivered by: Griesa, District Judge.
This is an action relating to 48 limited partnerships. Plaintiff Ramos
invested in one of these — Woburn Mall Associates. Plaintiff Rabin
invested in another — Southroads Mall Limited Partnership. The
complaint purports to name a plaintiff class and a defendant class. The
plaintiff class consists of persons who purchased limited partnership
interests in any of the 48 partnerships. The defendant class consists of
the 48 partnerships.
Aside from the defendant class of partnerships, named for purposes of
the derivative claim, there are various defendants upon whom liability is
sought to be imposed. The so-called "Patrician Defendants" and "Trust
Defendants" consist of the promoters of the partnerships and allied
parties. In addition, two accounting firms are named — Arthur
Andersen & Co. and Hecht and Company. The complaint also names three
companies which acted as real estate appraisers — Howard Jackson
Associates, Inc., Nationwide Appraisal Company, Inc. and McGraw-Hill,
Inc., acting through a division named McGraw-Hill Information Systems
Company. Finally, two law firms are sued — Summit Rovins &
Feldesman and Carro, Spanbock, Caster & Cuiffo.
The action has been settled in regard to the Patrician Defendants, the
Trust Defendants and Arthur Andersen. Howard Jackson Associates is in
bankruptcy. The remaining defendants are Hecht, Nationwide Appraisal,
McGraw-Hill, Summit Rovins and Carro Spanbock.
The initial complaint was filed August 9, 1989. An amended complaint
was filed in November 1989.
A conference was held on January 10, 1990, after a settlement agreement
had been made with the Patrician Defendants. At this conference the
remaining defendants objected to the amended complaint and indicated
their desire to move to dismiss. It was readily apparent that the
complaint was deficient, and it was agreed that there would be a further
amendment. The second amended complaint was filed on January 31, 1990.
Motions to dismiss the second amended complaint were filed in April
1990. Counsel have appeared before the court twice to argue these
The moving defendants have asserted a number of arguments, including
lack of standing; failure to plead the elements required to be alleged
for the various causes of action, necessitating dismissal under Rule
12(b)(6); failure to plead fraud with particularity as required by Rule
9(b); an statute of limitations.
The complaint in this case is unusually difficult to deal with. Many
important allegations are lacking in specifics. It is difficult to
discern whether this should be considered a violation of the pleading
rules, or whether there is a reasonable explanation in the fact that this
is a suit dealing with 48 partnerships, in which some degree of
generalization is appropriate.
It now appears that the issue about the sufficiency of pleadings is
largely rendered academic by the problem of standing. For reasons
hereafter set forth, the court has determined that all claims against
three of the moving defendants — McGraw-Hill, Nationwide and Carro
Spanbock — must be dismissed because plaintiffs lack standing to sue
them. As to Hecht and Summit Rovins, plaintiff Rabin lacks standing to
assert any claims against these defendants, and plaintiff Ramos has
standing to sue these two defendants in respect to only one of the 48
partnerships — Woburn Mall Associates.
The result of these rulings is the drastic alteration of the remaining
case. There is no longer a suit relating to 48 partnerships. The present
form of the complaint is wholly inappropriate to a suit regarding one
partnership. Beyond this, it may be, in view of the settlements achieved
thus far with certain defendants, that there will be no desire to pursue
claims against Hecht and Summit Rovins with respect to this one
The court will confer with the appropriate attorneys and discuss ...