upheld the certification of a securities class action based on exceptionally generic and aspirational statements in the face of overwhelming and unrebutted evidence that the statements had no impact on the stock price in so doing the court of appeals committed to legal errors st the court refused to consider the generality of the statements as evidence tending to disprove price impact as respondents now agree a chord may consider the nature of a statement in making that determination there is no merit to the further contention that a court may consider the nature of the statement only through expert testimony nd the court of appeals heard by holding that the basic presumption shifted the ultimate burden of persuasion to a defendant on the issue of price impact rule three hundred and one governs presumptions and it shifts only the burden of production unless the statute or rule provides otherwise basic plainly created a presumption and congress has not even recognize the private cause of action for securities fraud much less provided that the basic presumption shifts the burden of persuasion should the court agree with us on either question presented it should reverse the judgment below the lower courts desperately need guidance on how to navigate this court's decisions on the basic presumption while halliburton to help out the promise the defendants would be able to rip up the presumption that has proven to be effectively impossible thanks in part to the inflation maintenance theory and under the correct legal standard this is an easy case because the statements were exceedingly generic the alleged conflicts of interest were already in the public domain and respondents presented no valid evidence to establish the cause of the stock drops if certification is permitted here the promise of halliburton to will have been betrayed and any stock drop will inevitably result in a reverse engineered securities class action based on statements like these the court of appeals judgment should be reversed i welcome the court's question any possible difference you focused on their argument that expert testimony is required is there any daylight on the substantive question between the two of you concerning the generic statements i don't think so mr chief justice because respondent concedes that page twenty six of their pre that a more general statement is relatively well likely to affect a securities prize and that is our fundamental submission on the st question presented and to the extent that respondent suggests that an expert is required we think st that that is contrary to this court's direction and halliburton to that any evidence relevant to price impacts should be considered and  we did have an expert dr starke who operated on the relevance of the nature of the state so you think it's ok to submit expert testimony on that question if you want to you just don't think it's required but that is correct mr chief justice we think that the nature of the statement is evidence that simply weighs in the preponderance of the evidence inquiry and certainly plaintiffs like defendants are free to come forward with expert testimony on the question of price impact so what is the debate between between two parties on whether a statement is sufficiently generic what does it look like i mean you have a statement of the sort of the d issue here i mean does one passant say well you can tell from common sense that this is is too generic and the other side says mill my common sense says it's not well dr starke testified mr chief justice the generic statements such as these are perfectly safe in the markets they are made by all of goldman sachs's chief competitors and analysts did not view them as pertinent that to be clear we don't think that expert testimony of that sort is required and again where you have exceptionally generic statements like these are fundamental submission is i'm interested in how the basic basic presumption interacts with of and the inflation maintenance theory would you why should  identified justice thomas we don't dispute that the inflation maintenance theory can be a valid theory but i think this illicit case illustrates the difficulties in applying that theory and i think the application here is seriously problematic so just to be clear the inflation maintenance theory is the notion that even though a statement when made may not have had an impact on the stock price it somehow maintains the price at an inflated level and the way in which the parties litigate bad issue is by looking at the so called back ad at looking at the alleged corrective disclosures to see if any pack and price drop is indicative of front and price inflation that lead you into the reverse engineering problem you mentioned  your discussions with the chief justice it does in a case like this justice thomas and let me explain why i think if you have a case in which the inflation causing a vat the inflation maintaining misstatement and the alleged corrective disclosure all have the same contat the inflation maintenance theory just about works and if you look at the beatles hypothetical in the court of appeals opinion at page sixteen a of the petition appendix i think you see an example of that but this case is a far cry from that because the plaintiffs don't even deign to identify the inflation causing a vat and there is a mismatch between the alleged misstatements and the alleged corrective disclosures precisely because the alleged misstatements are so exceedingly generic statements like our client's interests always come st integrity and honesty are at the heart of our business and so forth and where you have that mismatch between the alleged misstatements and the alleged corrective disclosures it casts doubt on the inference underlying the inflation as i understand it amgen indicates or host the plaintiff is not required to prove materiality sort of the class certification state in order to invoke basic but defendant from disproving materiality well i think what a defendant can do is point to evidence that would also be relevant to materiality at the class certification stage in order to negate price impact and certainly the mere fact that a court at the motion to dismiss stage says that a case shouldn't be dismissed on materiality grounds doesn't mean that that element has been definitively fryer morning news there is a new issue a new product liability case as to whether a tire was made properly and caused the accident and it's trying to judge and there's some evidence introduced by expert  everybody agrees take the statement for what it's worth listening to the experts and don't check your sense of common sense of the door that's what judges do so why are we hearing that issue well not an issue for the court of appeals rarely when we hear it what's the legal issue of justice prior i certainly agree that our submission here is that a court shouldn't check its common sense at the door and it should take the nature of the statement into account in the ways that i have suggested it should weigh that evidence as part of the preponderance of the evidence inquiry and it should consider the nature of the statements in determining whether those statements match up with the corrective disclosures i think where the court of appeals went wrong was in lumping in that argument with our other arguments and saying that they were all precluded by and chat all amgen holds is that a party cannot litigate the issue of materiality that materiality is not the focus of the issue not of and not of material you're saying the precise mistake on this that the court of appeals made on the price impact theory in valuating the evidence that was given is that it took the nature of the statement off the table it said and i'm quoting from page one if you used to consider the fact that they were general even though the experts told them that the fact that it's general doesn't mean never the fact that it's general means sometimes it can affect the price and they didn't pay any attention to that you're saying i'll read the record and see but i thought that's a job  court of appeals the court of appeals what have i said wrong well the court of appeals not only took the nature of the statements off the table but in assessing the evidence it really attach no significance to the nature of the statements and that was the district court's  that once that is corrected this is an easy case because of the exceptionally generic nature of this i think i got that for now if you if i have time i'd like to know the difference between materiality impact which i put in my mind and get it for a while and then i would lose it so what is it you or i think i can answer that in a sentence because i know time is short materiality focuses on what a hypothetical reasonable investor would care about price impact focuses on what actually happened got it thank you justice alito do you think there can ever be a statement that is so bland that there can never be reliance suppose a company says we are a will take into account other factors i think that's what courts do every day justice alito in evaluating materiality at the motion to dismiss stage and as we point out in our briefs there is a familiar and massive body of case law that says that statements of that variety are immaterial as a matter of law i think that the argument that we're making here is overlapping and in some respects similar but it is conceptually distinct it is that when you have a statement like this it is unlikely to affect the market price and the fact that a statement is unlikely to affect the market price as the government explains at some length and its brief tends to show that the statement did not reliance that's what i'm best when i'm asking about do you really want to say that well i think what we're saying justice alito is that the more generic statement is the west's likely it is to have rights impact and of course to be clear we're specifically talking about price impact in the context of the basic presumption and not the separate question of whether say some individual individually relied and again i think on that issue where you have exceedingly generic statements like this and the statements are not too far removed from your hypothetical of a company that just says that it's a nice company it is exceedingly unlikely that that's going to have price impact and plaintiffs have to come forward with pretty compelling evidence that we know it is a preponderance of the evidence standard and the allocation of the burden of persuasion will matter only in a case where there is sufficiently weighty evidence on both sides and that's why we think that we would prevail here and that the court should reverse regardless of whether a statement is generic so that it was unlikely to have a price in but how should a judge go about weighing her intuition against the opinion of experts it seems to me even with the hypothetical that justice alito pose that would i would have done and i think most judges would do is to say she my gut tells me why with this even that or now i've got a bunch of the titian er s experts who say no this is why it should and unless i can articulate why those experts position is on reasonable why should my and decide whether it disagrees with the district court that the experts were convincing but i would say two things in response to that just to sort of my our st and this goes directly to respondents suggestion that the only way that the nature of the statements come in and through expert district court all the time way expert testimony together with other evidence and all we are asking the court to do is to say that that is the rule in other words that a court should take the nature of the statement into account together with the expert testimony our own casamance talk if this time is limited you pointed to certainly point zero or we made the more ambitious argument that the nature of the statement should be dispositive but i think that there is no doubt that we also may be argument that the nature of the statement is relevant to the analysis in the way that we've been discussing today and indeed that was really the central focus of the st part of the oral argument before the court of appeal and that is of course the argument that we made in our serpent titian and the argument that we're making now and that's a matter for the record appeals was approaching it in the wrong way i think that that's right but i think it undersells that to say that it is only those two sentences because if for instance you take a look at the latter passage the passage from thirty six a to thirty eight and the petition appendix that the passage in which the majority response to judge sullivan dissenting opinion the whole gist of which was that the nature of the statement should be taken into account and i think it's telling to this kagan that respondent and their brief in opposition in response to are making this argument about in any way suggest that there was any ambiguity in the court of appeals opinion and it was only after the government kinds of general statements that as a matter of law were irrelevant i see those statements at least possibly as going to that argument that you made a low rather than any argument that you're making now i matter really precluded any consideration of the nature of the statement and i think that that's fundamentally flawed and i would point this court to the th circuit decision and all state which i think engaged in the correct analysis and suggesting that notwithstanding case and there the nd circuit said clearly look you can consider a class certification evidence that is relevant to materiality i think so justice kagan i think where the nd circuit went wrong requirement the plaintiffs would have to establish he would really neuter the fraud on the market presumption because it would make it impossible for the plaintiffs to have the benefit of the presumption by contrast our submission here is simply that this presumption works like any other presumption and rule three hundred and one makes clear that as to presumptions the burden of production  but not the burden of persuasion lest the presumption is provided for by federal statute or by rule ok and on one score i guess your friends on the other side would respond it's a mistake to think about the basic presumption is presumption at all it's really more like a proxy what do you say to that justice course that i don't know how this could be viewed as anything other than a presumption indeed in halliburton one the court described it as quote just that a presumption and in basic in establishing the presumption in the st place the court actually cited rule thirty one dollars which i think reflects the recognition that this would be a presumption in the rule three hundred and one set and at that point the only remaining question is whether the presumption is provided for by a federal rule or a federal statute and where you have a cause of action that is judicially created much less the absence of any suggestion by congress that the basic justices questions on the difference between you and the other side and other of my colleagues have also asked about this seems like the adjectives are going to be different and the admissions will probably matter in future litigation so i want to make sure i have crisply exactly what you think it should be my understanding is that you think the generic nature of the alleged misstatement is powerful evidence of the lack of price impact you also use critical  important what's your preferred adjective and do you really think the other side's agreeing with sad will find out soon i guess good morning justice cavanagh what i would say about that and what we would respect if that meant that the court should say is that the more generic a statement the less likely it is that it will contain the type of information that is incorporated into the market price of the stock and we think that in this case the statements are exceedingly generic and where that is true that is powerful or compelling evidence and it is precisely for that reason that we think that the court really should go on and address the certification here and reverse the judgment of trying to stop you there  conclude that it's generic but not exceedingly generic you're drawing a distinction between those two things is that not our full evidence i think it's a sliding scale justice capital and so i think that where you have statements that are very generic and it's hard to see a statement like our clients interests always come st as anything but that is powerful and compelling evidence on our ok keep going i think what's really striking in this case and the reason why this case is an easy case it because once you take that into account and look at what's on the other side all you have on the other side is a single expert who really made no effort to attribute the stock drop to the alleged corrective disclosures much less to desegregate the effect of the reports of government enforcement activity can i ask you out for a current bush or using generic how are you defining generic or stated otherwise what kinds of statements are not generic i think that it generic statement is essentially a statement that has little specific factual content and i think that the statement really illustrate that even played by our clients interests always come st and it is hard with regard to many of these statements even imagine a corrective disclosure much less think that the disclosures at issue here which involved information that was already in the public domain could qualify last question on it's pretty narrow so you and the respondents both agree that the nature and content of the statements here there generality bears on that the basic presumption and the court ought to consider it right yes i think that's correct ok so the only dispute between you is whether the judge can rely on common sense or expert testimony only am i correct about that well i don't think it's fair to characterize our position as relying only on common sense i think the everyone agrees with the proposition that the more generic a statement is the less likely it is to affect the securities price ok let me let me rephrase that mr shami i am not only it seems to me very unlikely that any defendant in a class action like this is not going to bring in experts on the question of how the generality of this statement might have affected the price you know and whether inflating it or you know causing it to spike or what have you so the only and the only dispute then is just a method of proof i think in the defendant's case it would most often lead off and be both and like both expert evidence and common sense but in the respondents view it should be only expert evidence and never common sense accurate i think as a practical matter just the spirit that is in the sense that typically both sides will have experts in any significant securities fraud case and as i mentioned earlier we did indeed have an expert who elaborated on this issue of the nature of the statements pointed to other companies that had made them and so forth ok so you started your argument by saying that this case was an opportunity for us to respond restore the promise of halliburton to by making the basic presumption rebuttable let's say that you lose on kewpie two how does a ruling on that very very narrow issue saying sure judges can also consider their common sense make the basic presumption rebuttable what does it really well you know just the spirit the court obviously has the discretion to apply the legal standard once it articulated and our submission is simply that this is a really easy case for the reasons i've said it's not just that these statements were generic the alleged conflicts of interest were in the public domain and respond that expert testimony was painfully thin and so i think it would provide much needed guidance to the lower courts if this court were to go on and apply the crack legal standard as it not infrequently does thank you mr chief justice so i would just say a couple of things about the government's position in this case because you're about to hear from the government i we largely agree with the government i think we part ways on just two key points on the st question presented we don't agree with the government that the court should issue an open ended remain and so that the court of appeals can clarify the legal rule that it was applying we believe as i indicated in my colloquy with justice kagan that the court of appeals unambiguous held that the generic nature of the statements could not be considered in the price impact in courage and if this court or a man's rather than reversing out right we would submit that it should do so with clear directions as to how to conduct the in indicated in my discussion with justice cavanaugh on the nd question presented we respectfully submit that the government failed to come to grips with the language of rule three hundred and one the government offers no valid reason why it should not apply to the presumption that basic created please the court the dispute on the st question presented has narrowed substantially petitioners no longer maintained that a generic statement categorically precludes of finding a price in fact it doesn't and likewise respondents no longer maintain that the generic nature of a statement is categorically irrelevant to price impact or otherwise contrary to amgen of the opinion below could be read to suggest rather price impact requires comparing the actual price to what the price would have been had there been no deceit and so the nature of the deceitful statement isn't relevant though not by itself dispositive to that inquiry as to the nd question presented albert into said that plaintiffs have the burden to show the basic prerequisites but do not have the burden to directly show price impact so the plaintiffs don't have that burn then logically defendant should bear it now petitioners rely on three hundred and one but that will play in text leave the burden of persuasion on touched and so doesn't answer the question here and doesn't this place halliburton argument look like i mean the issue is we are a nice company and that's one of the challenge statements we know what arguments are the party's going to make so mr chief justice i guess i'll preface my answer by saying reliance is an element of the merits of a securities fraud plain and so presumably it would be subject to the same sort of motion to dismiss standard that would apply to any securities fraud action so i think in an extreme example like that it might not survive a motion to dismiss not just on materiality but on reliance as well but to directly answer your question at the class certification stage the parties would offer evidence to answer the question that should always be answered in price impact what was the price at the time of the plaintiff's transaction on the front end and what would the price have been at that time absent the deceit back to a general statement as a general rule but exactly one argument is someone going to make is that there are people who would regard we are a nice company a fraudulent statement depending upon subsequent events how would they make that  it would be similar statements like this never caused a price impact in similar industries or for similar companies the price before and after would have been the same and therefore there is no price impact in this particular case as a result of that false statement presumably  you an example of how it truly immaterial statement could in reality have actually had an impact on price precisely because the circumstances under which that would materialize would be a generally efficient market but reacting  inefficiently indus particular case which is just the converse of what the court said was possible in halliburton too and so because it would be an unreasonable reaction i suppose any example i could give you might be deemed to be far fetched but i do think it is just a logical consequence of what this court already recognize in halliburton to which is even in a generally efficient market a truly material statement could have no price impact and in follows that a and immaterial statement might in some circumstances have a price and back i think in this particular case respondents in some of their miki suggest that in this particular case because goldman sachs was dealing with a lot of financial instruments in which conflicts were extremely important both to the company to its reputation that it and reputational advantage that it enjoyed over its competitors and peers the industry more generally that in this case even highly generic statements about conflicts did in fact have a price impact now we don't take a position on whether they're correct but i imagine that the sort of dispute that the courts below would  resolve on a remap thank you just as prior just like your view you can use this is an area i don't know thoroughly it's filled with it's not jargon specialized terms i think more than are necessary but that's just an opinion but let me go into this all right i thought this st question is just like saying is a tire the effect of or not you take the evidence for what it's worth and apparently  saying is wait a minute suppose what the guy had said at the company was his capital total nonsense my god how did that move prices why is that material wealth twelve b six denied ok now we have to assume that and referred to correct me in so far as i'm wrong certainly just prior i think the statements that mr sam again points to and that we identify in our brief as well from the court of appeals  appear to be more categorical than i think you've described them now granted you might say well they reside in particular sections of the opinion that are captioned in a way that might not be as categorical as they seem on paper but if that is true then we would just  this court to clarify that so that there is no mistaking what the law is for parties and litigants and lower courts as to how the generic nature of the statement might be used i think mr sam again said all parties agree now that the more generic a statement the less likely it is to have actually caused a price impact and just like one may be may be but it depends on circumstances and am i right in thinking that the real problem here is the defendants don't get an appeal from a twelve b six denial on basis of materiality they do get an appeal they do get an appeal when the court says this is going to be class action and they'd like that appeal so they don't have to settle now that two it seems to me is underlying that am i wrong or right i think you're probably correct as a descriptive matter just as prior but i don't think it changes the fact it always does  about the basic presumption plan suppose you're right so the plaintiff proves whatever the plaintiff has to prove under basic premise defendant under how burden to us the opportunity to introduce its live and so on this question then the judge has to decide and the risk amount persuasion is on the defendant ok what does the judge compare the judge has the defendant's evidence what does that have on the plaintiff's side if this were a three a one presumption i would say the judge has on the plane just side whatever inference naturally arises from the evidence that the plaintiff has put in to satisfy the basic the judge would have to decide how much weight to give that am i right is that what do you think that's what happens the way you see things or do you think that basic awards the plaintiff some of proof goes beyond the inference that naturally arises from what the plaintiff has proven so justice alito i think halliburton two described what the effect of plaintiffs having satisfied the basic prerequisites is doing is being actually satisfying the rule twenty three requirements and the opinion says that twice in very short order that the pla actually satisfy the burden of persuasion so i think it's probably if i understood your question closer to the latter if i could give you an analogy the basic prerequisites are sort of like the st half of a basketball game in which the plaintiffs might take the to say that generic that the generic nature of the village was station that cannot be considered as zero but i don't take it to be your position to be that that's to say that the nd circuit decision can only be read that way that's correct let's say i disagree with you that it's the most efficient way forward let's stop with the fact that they've been litigating the class certification now for five years and that  petitioners council concedes the nd circuit got it right the st time when it reminded it's exactly what you want to say the st time it's hard to imagine they forgot it the nd time so wouldn't the most efficient answer be state the law and that this way to read the nd circuit subpoena is the way it said the st time and just let this case this issue die end and go have a particular interest and that we are most interested in a correct statement of the law but we don't have an interest in how this particular case comes out so why did this court correctly state the law i don't think we have an issue with that whether it's it has its source in a federal statute and so that phrase is rule three hundred and one unless a federal statute provides otherwise that phrase is satisfied or you might be saying but no we don't have to critical one here that sentence makes clear that the rule does not shift or otherwise assign the burden of persuasion but remains on the party who had it originally and critically that text does not say remains on the party invoking presumption had said that petitioners would have a strong argument but it says on the party who had it originally and so it's totally agnostic and recognizes that either party might have the burden of persuasion so to figure that answer out you have to go to the substantive law which is basic in halliburton too and at that point it doesn't really matter whether they're linked to a statute an interpretation of a statute or purely judge made the fact is basic an alibi going to set forth the substantive law and  step to the defendant comes in and says i have proof that it didn't in this case because it's so generic you agree i assume that a judge could in appropriate circumstances find that that nd reduction by the defendant that's right ok if that's the case why wouldn't we follow three hundred and one and and put the burden of persuasion back on the plaintiffs given that of course it's class certification and they bear the burden just talk about given that the law places the burden to to see class certification on the plaintiff and of course under ten b five the burden resides with the plaintiff to prove his case why wouldn't the burden in the face of a generic statement come back to the plaintiff to say ok i have this evidence of the material misstatement and you normally assume it affects the market but there's some contrary evidence another plaintiff has to has to capable of satisfying their burden by proving the prerequisites now defendant can come back with a price impact evidence given that playing this have already satisfied their requirement by showing to be a prerequisite defense will have to do nature of the statement and the morning america statement you know is evidence of price impact is because of the likelihood that at a price impact in other words the more generic a statement the less likely it actually had a price and back in the particular case some kind of a blunder so in the sense i gave you plus a more likely sense that you have you would suggest yes that's right ok well especially in march i'm always game for a basketball analogy some can you give the nd half your answer to justice is a question and certainly i might my point was that by hadas plaintiffs of already taking the lead on showing price impact through the indirect route the basic prerequisite and so independent want to rebut it with the rest evidence of price impact and plaintiff will come forward with their own direct evidence relating to price and at defendants will have to do more than just train back in the nd half they'll have to do more than merely enough to get a tie for the game thank you this is fair of mine mister and to think about the implications of this case for other cases so judge hamilton has a very thoughtful opinion and the  circuit and all state where he talks about how the tension between amgen and halliburton to requires the district court to split some very fine hairs it's very very difficult to navigate because you know all of these questions boil down to did the statement matter even at the certification stage all the while as judge hamilton colorfully puts it you know the judge is supposed to be not thinking about the pink elephant not thinking about how any of this bears for example on materiality so here's my question and nature materiality not exactly justice barrett and i would add we agree completely with judge hamilton's opinion in all day and we think that's a good model to follow but i think the generic waiver of a statement of course would go to materiality in that the more generic a statement you know less reasonable it would be for a reasonable investor to rely on it but it also goes to the entirely separate question of price impact which is whether in this particular instance it is statement have an effect on the price of the security you know but as justice buyer said earlier it's very difficult you think about price impacts and you think about this distinction and green you can make a logical distinction between what actually happened in price impact and what a reasonable how a reasonable and investor would react which would be a more the materiality question but they're very close right i mean if a question if a statement is immaterial it's far less likely that it will actually have an impact on the price right that's exactly right and so if we say this if we say i mean i understand both sides are conceding it but if we say that the nature and content of a statement here its general nature is relevant and fair game on the question of price impact does that have implications for materiality clear in i think amgen and halliburton too that just because a particular issue might bear on the merits that's no reason not to allow the defendant or the plaintiff to bring that issue in a class certification and of course comcast and wal mart say the same thing thank you mr abbott mr joshi thank you mr chief justice the parties largely seem to agree with each other and with us on the st question presented and the only lingering disagreement appears to be whether the generic nature of a misstatement must be introduced slowly through expert evidence and in our view there's no sound reason to impose that kind of artificial limit the more generic a statement is the less likely it is to have had a price impact and there nothing wrong with the courts taking that likelihood into account as part of its calculus about which one dollar of two competing narratives to credit just like you would do with credibility or the daubert factors on the nd question rule freel one doesn't answer the question because it says the burden remains on the party who had it originally and to find that out you have to look to substantive law and to the extent halliburton to doesn't already dictate an answer this court should adopt one back would essentially work  radical alteration of basic that halliburton to itself was loath to effectuate and we think that's why every court of appeals to consider the question including the th circuit in all states has held that defendants bear the burden and that's what we think this court should hold as well thank you counsel mr goldstein mr chief justice may please the court on the substance of the st question presented there is no difference between the parties and the united states we agree with them that the generic nature of the statement as they use the term is relevant evidence to price in fact we do believe that ought to be addressed in the st instance and principally by expert testimony by the judges can evaluate that testimony on the basis of common sense and we can imagine cases particularly where the to reality hasn't been decided where there no is no expert testimony that's necessary now how did we get to the point where everybody agrees we got here because the petitioners have what we do need to understand is that the court of appeals are already apply is the rule that everyone is asking for here and the united states i think has properly moved to the point of saying well there is some ambiguity in parts of  the nd circuit's opinion but you can resolve that just by making clear how you understand the court of appeals to rule and so i want to focus on what actually is the rule in the nd circuit now you have to start with the  circuit's st decision in this case which holds that all evidence is relevant to price impact notwithstanding that it overlaps with materiality judge crotty and then received an expert report from the  nobody excluded that evidence or tried to exclude it and it was admitted and judge across the evaluated all of the evidence together the petitioners did not argue on appeal and do not argue to you that the district court assessment of the evidence on price impact was clearly erroneous and so i do not understand how it is that they believe that they can get to the conclusion that he should be man to the nd circuit in the hope that  saying that under the court of appeals holding and this is a quote from page five of their their brief plaintiffs need only identify a drop in a company's stock price following a negative event then assert that the stock price had been improperly maintained by a company's generic statements without having to show when or how the inflation entered the company's stock price now is that true that is correct in the sense that it has nothing to do with disproving price impact one bit and it does do is show and the defendant attempted to do so here but there was an alternative ca certification there are plenty of ways of describing price impact in court and found a lack of price impact so only a drop in the company's price and then you can rely entirely on that statement along take conflicts seriously we put the customers st and those different in substance absolutely there is expert testimony here there are analysts reports that identify why there was a premium in the goldman sachs sciex stock price precisely because of this issue but turn mr chief justice to what it is that the defendant here attempted to do to disprove price impact and that is to prove an alternative cause for the decrease on that day they just have a very hard price impact case to make out here when the corrective disclosures occurred on this exact subject and the price declined precipitously on that day it's no surprise that this is i mean this seems like an area that the more that i read about it the less that we write the better so i'm very peripheral issues and in this instance you're so much in agreement well what what do you can simply affirm on that basis judge hamilton in the allstate case does say look these are very very very fine distinctions and it is i think important for the court not to do something that suggests that you want to reintroduce the materiality inquiry specifically into class or to vacation and there is a view that if you can just continue to reiterate that and so i do suppose there would be a valuable opinion that just says this book don't on class or  ocation ask the materiality question on the other hand don't throw common sense out and don't ignore the generic nature of the statements then say that the nd circuit's role that's why it vacated the st class certification that's why judge probably received the starr's report judge probably evaluated the evidence and then goldman abandon the argument that that was clearly erroneous that i suppose when events but also more simply dismissed the case because all the courts of appeals are any agree on the correct well you just told us we should say don't reintroduce the materiality issue do you mean to say that we should provide the following instruction in considering whether the basic presumption has been  you may not consider any evidence that would also go to the issue of materiality no absolutely no should we say the opposite of that but there is no there is no reason to disregard evidence that goes to price impact that would work but the basic presumption just because it would also go to the issue of materiality the nd circuit's st holding in this case and we agree it was correct ok great that's helpful now can i ask you to respond to the remember there is not that much evidence to show reliance than what you are showing is that reliance is a common question because the planet isn't proving materiality and class certification is not light but the plaintiff has done a ton  to establish the actual fact reliance all they are shown is that this is a case that we ought to be litigating on a class wide basis what that event and then tries to do and how a burden to allows them to do as they will look basically just has nothing to do with this case because this is not a case where there was actual price movement in response to the statements so they are the agent apples and oranges thing it's not a rules rio one case the plan is introducing some evidence and that really does suggest weigh the evidence that the defendant has introduced against something that is before me as a result of the plaintiff's having satisfied the basic requirement unless i am commissioned to make my own evaluation of the strength of the natural inference of price impact that well lies from whatever the plaintiff has shown that's the problem to which i don't know the answer  market and the publicity of the statement the defendant comes along with something like the starks report the troy report that sort of thing then the plaintiff's introduce their own evidence it was just the plaintiff's standing on the efficiency of the market it would be a mess and  that you had no expert testimony to rebut their expert expert position that the generic nature of this evidence could not and did not affect the price that action talking about how it was that this premium was so important and how goldman sachs had lost a battle you because it had a business model that often put its own interests in conflict with its own clients and so these systems but they claim to have for resolving the client conflicts were so important we address this issue in terms and i you should realize and focus i think on the fact that they did not argue either to the nd circuit or teemu the judge economies analysis of this in his nd attempt at this which has been going on as you said justified in my order for five years was clearly erroneous there is extensive evidence on to assuming that tell me why the th the nd circuit's decision has to be read in the way you say and is not ambiguous in the nd opinion the correct statement of the law you have to go back to the st opinion to find the correct statement of the law so so why shouldn't we just have a cane and say you know here's what the law really is we want you to make sure to do it under that appropriate standard they don't say about way it's because the petitioners make this argument that petitioner did not argue to the  circuit that the generic nature of the statement is a commonsense matter auto way in the balance it isn't perry hard to complain to the nd circuit in some way or insulting to the nd circuit to refer them on the ground that they don't have a clear articulation of why an argument is wrong that was not made to them when the same argument will not mean to the district or either what they do do is respond or just solve in terms of and vote the materiality as a matter of law are better and they say you shouldn't criticism that they'd only iterated in the nd decision but because they were asked to address that issue by the petitioners and if i could change track a little bit when when you said we all agree on question one and you said mean suppose there were expert reports on the question of you know how generic these statements are and whether they could have a price impact regardless and the judge says you know i've been looking at these reports and i've been getting theory i had and there seem and there seem to be ambiguities there seem to be gaps and i'm going to fill that in with my gut intuition of what really which morning mr goldstein you know as i understand it you know the plaintiff bears the burden of proving that this is a class that needs to be certified then comes in a presumption as part of that that a misstatement of fact affects price because of the  market theory by then the defendant comes forward with direct evidence saying well in this case this misstatement did not affect price and the question then is what happens next and it seems to me want to two things could burden of proof and win the day the other alternative though is if we flip the burden and put it on the defendant here the plaintiff might be able to do nothing and just rest on the presumption that there's a price impact in the face of direct evidence that there wasn't and then the district judges where justice alito worried about he's weighing direct evidence of no price impact versus a theory a presumption and i'm not sure i understand how a district judge can do that and isn't that some evidence that we should require consistent was ruled thirty one that the defendant carries a burden as you say as you say you did here showing that the direct evidence isn't to be credited and that the presumption my question if any comes forward with credible evidence that there's no direct impact the plaintiff does nothing how is the district judge supposed to analyze that if there's a burden of proof on the plaintiff i understand it if it's on the defendant i don't that the generic nature of an alleged misstatement is important evidence of lack of price impact can we say in those words depending on context it frequently will be but the united states correctly identifies contexts in which it won't be for example if that event says you know we put our audience st in the sense of having a conflict of interest policies and i can be a sweeping statement a quite important but i think that generic nature of the statement is irrelevant and in many cases may be quite important and on the how we got here question that you started started with i think we're here in part maybe because of confusion and some of the lower courts about how to read amgen and however and to together on the one hand don't consider materiality on the other hand do you consider evidence of a lack of price impact on the problem as you know is that the two inquiries overlap very significantly potentially can we say that the fact that the evidence and lack of price impact from generic statements overlaps with wasn't made to it all the parties agree the nd circuit has clearly held and just take this point as common a term and you must be willing to suggest the judge probably clearly erred how could he have clear the area when he took an expert report goldstein so i think you know there's been a lot of discussion today about how much daylight there is between you and the petitioners on kewpie one and you say it's the petitioners fault that they forfeited this argument that it's different than what they did in the nd circuit but it seems to me that you've both most towards the middle mean they've backed off on how important they think generality is and whether it can be decided categorically but you've also conceded that generality is relevant and you've given on the common sense on the role of the courts common sense so now we are left you know in this position where you've both moved more closely together and now we have to decide what to do about the nd circuit's opinion don't you think mr goldstein that it might be helpful given the positions that you've both taken to make clear that language like this the nd circuit's opinion where it says whether alleged misstatements are too general to demonstrate price impact has nothing to do with the issue of whether common questions predominate over individual ones so whether that's you know you called it you know maybe there literary effort needed to be polished a bit i mean no matter what the cause don't you think it would be worth our while and clarifying what the standard  to clarify that i guess i don't understand that it seems like it would be valuable to hide a meaningful number of clarifying clarify all that you will we will all benefit from it big questions when the user st their decision on the basis of an argument that was not made to them or to judge prady the united states us i would like you to affirm of course but i you can accomplish everything that you need to in simply saying we don't need that one sentence out of all of the rest of the nd circuit's opinion and judge probably is opinion and it's  that these statements are just truly generic and jay in twenty nine we have a statement we have extensive procedures and controls that are designed to identify and address conflicts of interest including those designed to prevent improper sharing of information and there is a similar one at j fifty nine and then i would just encourage the court to go to all of the statements in the press and are reflecting on most reports as jay and i am forty eight dollars ninety four cents saying that this price drop isn't the result of the loss of the premium in goldman sachs share price that resulted from their representation it's about they have they're having methods to resolve conflicts of interest the nd circuit has always applied t why this case this more significant than mr goldstein suggests and why the court needs to answer the st question as well as the indisputable he presented nd one hundred and ten talbert and two defendants have been able to rebut the basic presumption by showing no price impact  only five cases plaintiffs have used the inflation maintenance theory to make it very difficult to rebut that presumption because that there are a prohibited defendant from showing that a statement had no price impact at the time it was made the court of appeals holdings on the two questions presented taken together take a defendant's burden from very difficult to effectively impossible in an inflation maintenance case the only way a defendant can rebut the presumption is by showing that a corrective disclosure had no impact on the stock price but it is impossible to make that showing without taking the nature of the statement into account in comparing the statements to the corrective disclosures and if a defendant bears the burden of persuasion despite the plain language of rule three hundred and one plaintiffs will be able to do exactly what respondents did here to obtain class certification by coming forward with an expert who identifies a stock drop but offers only a theory and no evidence about its costs mr goldstein argues as much today that a stock drop  us a generic statement is sufficient to support class certification and in its nd opinion written by a different panel from the st opinion the nd circuit didn't simply make stray statements about the relevance of the nature of the statements  not engage in an analysis of the statements how general they were or how they wind up with the alleged corrective disclosures and neither did the district court this court should bring this multi year fight over class certification to an end because in this case it could not be clear that there is a complete mismatch between the misstatements and the corrective disclosures particularly once the abundant information already in the public domain is taken into account and respondents so expert dr finnerty offered nothing more than speculation about the cause of the price drop this is an easy case because respondents presented abundant and unrebutted evidence of the absence of price impact if this court permits the class certification to stand at or permits the court of appeals to reinstated on remand anything a company does that leads to a stock drop is securities fraud and gives rise to a valid class action that is decidedly not the legal regime in any other jurisdiction of which we are aware and it should not be in the regime here either particularly on a judicially created cause of action the court should provide much needed clarification it should hold st that the nature of the statement is important evidence that should be taken into account in assessing price impacts and nd that the basic presumption like any other judicially created presumption is governed by rules three hundred and one and the court should reverse the court of appeals judgment thank you thank you counsel of the cases submitted