NEW YORK Dec 19 A U.S. judge has dismissed
Deutsche Bank AG as a defendant in one of two
long-running cases accusing issuers and banks of deceiving
investors about the risks of billions of dollars of residential
mortgage-backed securities that soured during the financial
U.S. District Judge Harold Baer in Manhattan on Wednesday
said a June 27 decision by the 2nd U.S. Circuit Court of Appeals
meant that intervening plaintiffs could not join a case over the
RALI Mortgage Asset-Backed Pass-Through Certificates issued in
2006 and 2007 by the former Residential Capital LLC.
Baer dismissed claims arising from six offerings
underwritten by Deutsche Bank, and let stand claims tied to
offerings underwritten by Citigroup Inc and Goldman Sachs
Group Inc. The decision did not affect claims in the RALI
case against UBS AG.
In the other case, Baer dismissed claims against Royal Bank
of Scotland Group Plc arising from two RMBS offerings
under the Harborview Mortgage Loan Trusts, which were also
created in 2006 and 2007. RBS had argued that claims under two
other offerings should also be dismissed, court records show.
Baer narrowed the cases after the 2nd Circuit, in a case
involving the now defunct IndyMac Bancorp Inc, said federal law
did not permit intervening plaintiffs to put a three-year time
limit to pursue claims on hold under a "statute of repose."
The judge said the "significant" change in law required him
to reverse previous findings to stop the clock.
Joel Laitman, a partner at Cohen, Milstein, Sellers & Toll
representing the lead plaintiffs in both cases, said claims
remain over about $11.9 billion of certificates in 16 offerings
in the RALI case, and $22.5 billion of certificates in 12
offerings in the Harborview case.
The dismissal of Deutsche Bank "is not an unexpected result,
but we are glad the court did not extend the impact of the
IndyMac decision beyond what was appropriate," he said.
Deutsche Bank said it is pleased with Baer's decision.
William McGuinness, a partner at Fried, Frank, Harris,
Shriver & Jacobson representing Deutsche Bank, Citigroup,
Goldman and UBS, said: "We're pleased with what we regard as a
straightforward application of IndyMac."
RBS was not immediately available for comment.
The cases in the U.S. District Court, Southern District of
New York are New Jersey Carpenters Vacation Fund et al v. Royal
Bank of Scotland Group Plc et al, No. 08-05093; and New Jersey
Carpenters Health Fund et al v. Residential Capital LLC et al,