BBC: Juliet Breitman and another child were four years old when they raced their small bicycles on a Manhattan street and ran into Claire Menagh, 87.
The children struck Ms Menagh, knocking her to the ground. She underwent surgery for a fractured hip and died three months later.
Citing several cases involving young children who had been in accidents, New York Supreme Court Judge Paul Wooten ruled that Juliet, now six years old, could be sued.