Kramer Levin Amicus Brief Helps Secure Victory for Real Estate Developers

In a decision based largely on the amicus brief of Kramer Levin client The Real Estate Board of New York, yesterday the New York Court of Appeals reversed a decision by the First Dept. and affirmed an earlier ruling by the Supreme Court that a plaintiff cannot disguise an action under the Martin Act as one for common law fraud. Plaintiffs had sued developers claiming that developers had acted fraudulently in including required Martin Act language in amendments to their offering plan stating that there had been no material changes to the plan, despite some difficulties in construction. The Court rejected this claim as a “backdoor private cause of action to enforce the Martin Act,” noting that such a right was inconsistent with its previous precedent and quoting the warning from Kramer Levin’s amicus brief that it would “expand the already detailed disclosure requirements of the Martin Act by forcing parties to disclose the normal kinds of problems [encountered] in the course of construction.” This decision will help protect developers throughout New York from spurious fraud claims. The Kramer Levin team was led by Charlotte Moses Fischman and Jay A. Neveloff, and included associate Matan A. Koch.