Document ID: ./input/supremecourt_opinions/opinions/20pdf/20-222_2c83.pdf
Page Number: 2

2  GOLDMAN SACHS GROUP, INC. v. ARKANSAS TEACHER 

RETIREMENT SYSTEM 
Syllabus 

finding that the District Court’s price impact determination was not 
an abuse of discretion.  Goldman now argues that the Second Circuit 
erred twice: first, by holding that the generic nature of Goldman’s al-
leged misrepresentations is irrelevant to the price impact inquiry; and 
second, by assigning Goldman the burden of persuasion to prove a lack 
of price impact. 

Held: 

1. The generic nature of a misrepresentation often is important evi-
dence of price impact that courts should consider at class certification, 
including in inflation-maintenance cases.  That is true even though the
same evidence may be relevant to materiality, an inquiry reserved for 
the merits phase of a securities-fraud class action.  See Amgen Inc. v. 
Connecticut Retirement Plans and Trust Funds, 568 U. S. 455.  A court 
has an obligation before certifying a class to determine that Rule 23 is
satisfied, Comcast Corp. v. Behrend, 569 U. S. 27, 35, and a court can-
not make that finding in a securities-fraud class action without consid-
ering all evidence relevant to price impact.  See Halliburton Co. v. Er-
ica P. John Fund, Inc., 573 U. S. 258, 284 (Halliburton II).   The parties
now accept this legal framework but dispute whether the Second Cir-
cuit properly considered the generic nature of Goldman’s alleged mis-
representations.  Because  the  Court  concludes  that  the  Second  Cir-
cuit’s  opinions  leave  sufficient  doubt  on  this  question,  the  Court
remands for the Second Circuit to consider all record evidence relevant 
to price impact, regardless whether that evidence overlaps with mate-
riality or any other merits issue.  Pp. 6–9.

2. Defendants bear the burden of persuasion to prove a lack of price 
impact by a preponderance of the evidence at class certification.  The 
Court has held that nothing in Federal Rule of Evidence 301 constrains
the Court’s authority to change customary burdens of persuasion un-
der a federal statute, see NLRB v. Transportation Management Corp., 
462 U. S. 393, 404, n. 7, and the Court has exercised this authority to 
reassign the burden of persuasion to the defendant in other contexts. 
Goldman does not challenge the Court’s relevant precedents, but ques-
tions  whether  the  Court  exercised  this  authority  in  establishing  the 
Basic framework pursuant to the securities laws.  The Court concludes 
that Basic and Halliburton II did allocate to defendants the burden of 
persuasion  to  prove  a  lack  of  price  impact.    As  relevant  here,  Basic 
explains that defendants may rebut the presumption of reliance if they 
“show that the misrepresentation in fact did not lead to a distortion of 
price” by making “[a]ny showing that severs the link between the al-
leged  misrepresentation  and  .  .  .  the  price  received  (or  paid)  by  the
plaintiff.”  485 U. S., at 248 (emphasis added).  Similarly, Halliburton 
II held that defendants may rebut the Basic presumption at class cer-