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Neca-Ibew Health & Welfare Fund v. Goldman, Sachs & Co.

United States District Court, S.D. New York

January 6, 2015

NECA-IBEW HEALTH & WELFARE FUND, Individually and On Behalf of All Others Similarly Situated, Plaintiff,
v.
GOLDMAN, SACHS & CO., et al., Defendants.

Arthur C. Leahy, Susan G. Taylor, Lucas F. Olts, Susannah R. Conn, Angel P. Lau, Jennifer N. Caringal, Samuel H. Rudman, David A. Rosenfeld, ROBINS GELLER RUDMAN & DOWD LLP, Attorneys for Plaintiff.

Patrick J. O'Hara, CAVANAGH & O'HARA, Attorneys for Plaintiff.

Richard H. Klapper, Theodore Edelman, Michael T. Tomaino, Jr., SULLIVAN & CROMWELL LLP, Attorneys for Defendants.

OPINION

MIRIAM GOLDMAN CEDARBAUM, District Judge.

Plaintiff NECA-IBEW Health & Welfare Fund ("NECA") requests certification of interlocutory appeal, pursuant to 28 U.S.C. § 1292(b), of the July 10, 2014 order granting in part and denying in part defendants' motion to dismiss the Fourth Amended Complaint. Specifically, NECA seeks interlocutory review of the decision not to allow reinstatement of claims under the 1933 Securities Act relating to seven securities offerings: GSAA Home Equity Trust 2007-8; GSAMP Trust 2007-HE1, 2007-HE2; and GSR Mortgage Loan Trust 2007-OA1, 2007-OA2, 2007-4F, and 2007-5F. The request is denied.

BACKGROUND

In this action, NECA seeks to assert claims on behalf of a class of purchasers of mortgage-backed certificates that defendants sold in seventeen separate offerings through seventeen separate trusts pursuant to the same shelf registration statement but using separate prospectus supplements. NECA itself purchased certificates from two of those offerings backed by trusts GSAA Home Equity Trust 2007-10 and GSAA Home Equity Trust 2007-5.

In September 2009, defendants' motion to dismiss the First Amended Complaint was granted with leave to amend. In January 2010, defendants' motion to dismiss the Second Amended Complaint was also granted because, among other things, NECA lacked standing to bring securities fraud claims on behalf of purchasers of certificates from offerings other than the two offerings from which NECA bought certificates. NECA was given leave to amend, but only with respect to the offerings from which NECA purchased certificates. In October 2010, defendants' motion to dismiss the Third Amended Complaint was granted, and, in June 2011, final judgment was entered.

NECA appealed. The Second Circuit affirmed in part and vacated in part, stating that NECA had standing to bring claims on behalf of purchasers of offerings backed by loans made by the same originators that contributed loans to the two offerings NECA purchased:

to the extent certain [o]fferings were backed by loans originated by originators common to those backing the 2007-5 and 2007-10 [o]fferings, NECA's claims raise a sufficiently similar set of concerns to permit it to purport to represent [c]ertificate-holders from those [o]fferings. Therefore, under the Second Amended Complaint, plaintiff has class standing to assert the claims of purchasers of [c]ertificates from the 5 additional [t]rusts containing loans originated by GreenPoint, Wells Fargo, or both.... However, plaintiff lacks standing to assert claims on behalf of purchasers of [c]ertificates from the other 10 Trusts.

NECA-IBEW Health & Welfare Fund v. Goldman Sachs & Co., 693 F.3d 145, 164 (2d Cir. 2012).

The "other 10 Trusts" were the GSAA Home Equity Trust 2007-8; GSAMP Trust 2007-FM2, 2007-HEI, 2007-HE2, and 2007-HSBC1; GSR Mortgage Loan Trust 2007-OA1, 2007-OA2, 2007-4F, and 2007-5F; and the STARM Mortgage Loan Trust 2007-4 ("Dismissed Offerings"). Id. at 164 n.12. Thus the Second Circuit concluded, "we affirm in part and vacate in part the judgment of the district court dismissing plaintiff's claims and remand with instructions to reinstate plaintiff's §§ 11, 12(a)(2), and 15 claims in respect of the GSAA Home Equity Trust 2007-3, 2007-4, 2007-5, 2007-6, 2007-7, and 2007-10 Offerings, and the GSR Mortgage Loan Trust 2007-3F Offering" ("Reinstated Offerings"). Id. at 168.

On remand, NECA was allowed to file a Fourth Amended Complaint ("FAC"), and, in addition to the claims based on the Reinstated Offerings, it attempted to restore claims based on seven of the ten Dismissed Offerings. In July 2014, defendants' motion to dismiss the Dismissed Offerings was ...


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