In 'Ambac,' Judge Attempts to Make Sense of New York's Economic Loss Rule
8/21/2018 | New York Law Journal
New York’s economic loss rule, which acts as a check on asserting tort claims for purely economic damages, has long confounded practitioners. The rule, intended to preserve the distinction between contract and tort law and to protect defendants from disproportionate damages, has its most straightforward application in products liability and construction cases, but has been applied in a broad array of cases. In this article, we discuss a recent SDNY decision by Judge William H. Pauley III in Ambac v. U.S. Bank, which arises in the context of an RMBS case, but provides an interesting and informative lens for viewing the interplay between contract and breach of fiduciary duty claims under New York law.