McGraw-Hill Cos.'s Standard & Poor's unit and Ambac Financial Group Inc. lost a bid to dismiss a negligence claim in a lawsuit alleging they conspired to force California local governments to buy bond insurance they didn't need.

State court Judge Richard Kramer in San Francisco said Tuesday that the California entities presented sufficient evidence to pursue claims of negligent misrepresentation and unfair business practices. He didn't rule on the merits of the case.

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