Court Opinion

ID: 4697201
Source: CourtListenerOpinion
Date Created: 2021-06-21 15:01:17.717703+00
Date Added: 2024-06-11T08:05:45.036138
License: Public Domain

(Slip Opinion)              OCTOBER TERM, 2020                                       1

                                       Syllabus

         NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
       being done in connection with this case, at the time the opinion is issued.
       The syllabus constitutes no part of the opinion of the Court but has been
       prepared by the Reporter of Decisions for the convenience of the reader.
       See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

                                       Syllabus

 GOLDMAN SACHS GROUP, INC., ET AL. v. ARKANSAS
     TEACHER RETIREMENT SYSTEM, ET AL.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
                 THE SECOND CIRCUIT

      No. 20–222.      Argued March 29, 2021—Decided June 21, 2021
Respondent shareholders (Plaintiffs) filed this securities-fraud class ac-
  tion alleging that The Goldman Sachs Group, Inc., and certain of its
  executives (collectively, Goldman) violated securities laws and regula-
  tions prohibiting material misrepresentations and omissions in con-
  nection with the sale of securities. 15 U. S. C. §78j(b); 17 CFR
  §240.10b–5. Plaintiffs allege that Goldman maintained an artificially
  inflated stock price by repeatedly making false and misleading generic
  statements about its ability to manage conflicts. Under Plaintiffs’ in-
  flation-maintenance theory, Goldman’s alleged misrepresentations
  caused its stock price to remain inflated until the market reacted to
  the truth about Goldman’s practices—at which point Goldman’s stock
  price dropped and Plaintiffs suffered losses. Seeking to certify a class
  of Goldman shareholders harmed by reliance on Goldman’s alleged
  misrepresentations, Plaintiffs invoked the presumption, endorsed by
  the Court in Basic Inc. v. Levinson, 485 U. S. 224, that investors are
  presumed to rely on the market price of a company’s security, which in
  an efficient market will reflect all of the company’s public statements,
  including misrepresentations. The Basic presumption allows class-ac-
  tion plaintiffs to prove reliance through evidence common to the class.
  Goldman in turn sought to defeat class certification by rebutting the
  Basic presumption through evidence that its alleged misrepresenta-
  tions had no impact on its stock price. After an initial round of litiga-
  tion which resulted in a remand from the Second Circuit, the District
  Court certified the class based on Goldman’s failure to establish by a
  preponderance of the evidence that its alleged misrepresentations had
  no price impact. The Second Circuit authorized an appeal under Fed-
  eral Rule of Civil Procedure 23(f), and affirmed in a divided decision,
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-
                     Cite as: 594 U. S. ____ (2021)                      3

                                Syllabus

  tification “by showing . . . that the particular misrepresentation at is-
  sue did not affect the stock’s market price.” 573 U. S., at 279 (emphasis
  added). These references to a defendant’s “showing” require a defend-
  ant to do more than produce some evidence relevant to price impact;
  the defendant must “in fact” “seve[r] the link” between a misrepresen-
  tation and the price paid by the plaintiff. Moreover, Halliburton II’s
  holding that plaintiffs need not directly prove price impact to invoke
  the Basic presumption, 573 U. S., at 278–279, would be negated in al-
  most every case if a defendant could shift the burden of persuasion to
  the plaintiffs by mustering any competent evidence of a lack of price
  impact (including, for example, the generic nature of the alleged mis-
  representations). Thus, the best reading of the Court’s precedents as-
  signs defendants the burden of persuasion to prove a lack of price im-
  pact by a preponderance of the evidence. Even so, that allocated
  burden will be outcome determinative only in the rare case in which
  the evidence is in perfect equipoise. Pp. 9–12.
955 F. 3d 254, vacated and remanded.

   BARRETT, J., delivered the opinion of the Court, in which ROBERTS,
C. J., and BREYER, KAGAN, and KAVANAUGH, JJ., joined in full; in which
THOMAS, ALITO, and GORSUCH, JJ., joined as to Parts I and II–A; and in
which SOTOMAYOR, J., joined as to Parts I, II–A–1, and II–B. SOTOMAYOR,
J., filed an opinion concurring in part and dissenting in part. GORSUCH,
J., filed an opinion concurring in part and dissenting in part, in which
THOMAS and ALITO, JJ., joined.
                        Cite as: 594 U. S. ____ (2021)                                 1

                              Opinion of the Court

     NOTICE: This opinion is subject to formal revision before publication in the
     preliminary print of the United States Reports. Readers are requested to
     notify the Reporter of Decisions, Supreme Court of the United States, Wash-
     ington, D. C. 20543, of any typographical or other formal errors, in order that
     corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES
                                    _________________

                                     No. 20–222
                                    _________________

          GOLDMAN SACHS GROUP, INC., ET AL.,
          PETITIONERS v. ARKANSAS TEACHER
              RETIREMENT SYSTEM, ET AL.
 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
           APPEALS FOR THE SECOND CIRCUIT
                                  [June 21, 2021]

  JUSTICE BARRETT delivered the opinion of the Court.
  This case involves a securities-fraud class action filed by
several pension funds against The Goldman Sachs Group,
Inc., and three of its former executives (collectively, Gold-
man). Plaintiffs allege that Goldman maintained an artifi-
cially inflated stock price by making generic statements
about its ability to manage conflicts—for example, “We
have extensive procedures and controls that are designed to
identify and address conflicts of interest.” Plaintiffs say
that Goldman’s generic statements were false or misleading
in light of several undisclosed conflicts of interest, and that
once the truth about Goldman’s conflicts came out, Gold-
man’s stock price dropped and shareholders suffered losses.
  Below, this securities-fraud class action proceeded in typ-
ical fashion. Plaintiffs sought to certify a class of Goldman
shareholders by invoking the presumption endorsed by this
Court in Basic Inc. v. Levinson, 485 U. S. 224 (1988). The
Basic presumption is premised on the theory that investors
rely on the market price of a company’s security, which in
an efficient market incorporates all of the company’s public
2   GOLDMAN SACHS GROUP, INC. v. ARKANSAS TEACHER
                RETIREMENT SYSTEM
                  Opinion of the Court

misrepresentations. For its part, Goldman sought to defeat
class certification by rebutting the Basic presumption
through evidence that its alleged misrepresentations actu-
ally had no impact on its stock price. After determining
that Goldman had failed to carry its burden of proving a
lack of price impact, the District Court certified the class,
and the Second Circuit affirmed.
   In this Court, Goldman argues that the Second Circuit
erred twice: first, by holding that the generic nature of its
alleged misrepresentations is irrelevant to the price impact
inquiry; and second, by assigning Goldman the burden of
persuasion to prove a lack of price impact.
   On the first question, the parties now agree, as do we,
that the generic nature of a misrepresentation often is im-
portant evidence of price impact that courts should consider
at class certification. Because we conclude that the Second
Circuit may not have properly considered the generic na-
ture of Goldman’s alleged misrepresentations, we vacate
and remand for the Court of Appeals to reassess the District
Court’s price impact determination. On the second ques-
tion, we agree with the Second Circuit that our precedents
require defendants to bear the burden of persuasion to
prove a lack of price impact by a preponderance of the evi-
dence. We emphasize, though, that the burden of persua-
sion should rarely be outcome determinative.
                               I
                              A
   Section 10(b) of the Securities Exchange Act of 1934 and
its implementing regulation, Rule 10b–5, prohibit material
misrepresentations and omissions in connection with the
sale of securities. 48 Stat. 881, as amended, 15 U. S. C.
§78j(b); 17 CFR §240.10b–5 (2020). We have inferred from
these provisions an implied private cause of action permit-
ting the recovery of damages for securities fraud. Hallibur-
ton Co. v. Erica P. John Fund, Inc., 573 U. S. 258, 267
                  Cite as: 594 U. S. ____ (2021)              3

                      Opinion of the Court

(2014) (Halliburton II ). To recover damages, a private
plaintiff must prove, among other things, a material mis-
representation or omission by the defendant and the plain-
tiff ’s reliance on that misrepresentation or omission. Ibid.
   This case concerns the element of reliance. The “tradi-
tional (and most direct) way” for a plaintiff to prove reliance
is to show that he was aware of a defendant’s misrepresen-
tation and engaged in a transaction based on that misrep-
resentation. Ibid. (internal quotation marks omitted). In
Basic, however, we held that a plaintiff may also invoke a
rebuttable presumption of reliance based on the fraud-on-
the-market theory. 485 U. S., at 241–247.
   The “fundamental premise” of the fraud-on-the-market
theory underlying Basic’s presumption is “that an investor
presumptively relies on a misrepresentation so long as it
was reflected in the market price at the time of his transac-
tion.” Erica P. John Fund, Inc. v. Halliburton Co., 563 U. S.
804, 813 (2011). To invoke the Basic presumption, a plain-
tiff must prove: (1) that the alleged misrepresentation was
publicly known; (2) that it was material; (3) that the stock
traded in an efficient market; and (4) that the plaintiff
traded the stock between the time the misrepresentation
was made and when the truth was revealed. Halliburton
II, 573 U. S., at 268. The defendant may then rebut the
presumption through “[a]ny showing that severs the link
between the alleged misrepresentation and either the price
received (or paid) by the plaintiff, or his decision to trade at
a fair market price.” Basic, 485 U. S., at 248.
   Although the Basic presumption “can be invoked by any
Rule 10b–5 plaintiff,” it has “particular significance in se-
curities-fraud class actions.” Amgen Inc. v. Connecticut Re-
tirement Plans and Trust Funds, 568 U. S. 455, 462 (2013).
The presumption allows class-action plaintiffs to prove re-
liance through evidence common to the class. That in turn
makes it easier for plaintiffs to establish the predominance
requirement of Federal Rule of Civil Procedure 23, which
4   GOLDMAN SACHS GROUP, INC. v. ARKANSAS TEACHER
                RETIREMENT SYSTEM
                  Opinion of the Court

requires that “questions of law or fact common to class
members predominate” over individualized issues. Fed.
Rule Civ. Proc. 23(b)(3). Indeed, without the Basic pre-
sumption, individualized issues of reliance ordinarily would
defeat predominance and “preclude certification” of a secu-
rities-fraud class action. Amgen, 568 U. S., at 462–463; see
Halliburton II, 573 U. S., at 281–282.
   As a result, class-action plaintiffs must prove the Basic
prerequisites before class certification—with one exception.
In Amgen, we held that materiality should be left to the
merits stage because it does not bear on Rule 23’s predomi-
nance requirement. 568 U. S., at 466–468. The remaining
Basic prerequisites—publicity, market efficiency, and mar-
ket timing—“must be satisfied” by plaintiffs “before class
certification.” Halliburton II, 573 U. S., at 276.
   Satisfying those prerequisites, however, does not guaran-
tee class certification. We held in Halliburton II that de-
fendants may rebut the Basic presumption at class certifi-
cation by showing “that an alleged misrepresentation did
not actually affect the market price of the stock.” Id., at
284. If a misrepresentation had no price impact, then
Basic’s fundamental premise “completely collapses, render-
ing class certification inappropriate.” Id., at 283.
                              B
  Respondents here—whom we’ll call Plaintiffs—are Gold-
man shareholders. They brought this securities-fraud class
action against Goldman in the Southern District of New
York, alleging violations of §10(b) and Rule 10b–5.
  The specific theory of securities fraud that Plaintiffs al-
lege is known as inflation maintenance. Under this theory,
a misrepresentation causes a stock price “to remain inflated
by preventing preexisting inflation from dissipating from
the stock price.”         FindWhat Investor Group v.
                    Cite as: 594 U. S. ____ (2021)                   5

                         Opinion of the Court

FindWhat.com, 658 F. 3d 1282, 1315 (CA11 2011).1
  Plaintiffs allege here that between 2006 and 2010, Gold-
man maintained an inflated stock price by making repeated
misrepresentations about its conflict-of-interest policies
and business practices. The alleged misrepresentations are
generic statements from Goldman’s SEC filings and annual
reports, including the following:
     “We have extensive procedures and controls that are
       designed to identify and address conflicts of inter-
       est.” App. 216 (emphasis and boldface deleted).
     “Our clients’ interests always come first.” Id., at 162
       (same).
     “Integrity and honesty are at the heart of our busi-
       ness.” Id., at 163 (same).
According to Plaintiffs, these statements were false or mis-
leading—and caused Goldman’s stock to trade at artificially
inflated levels—because Goldman had in fact engaged in
several allegedly conflicted transactions without disclosing
the conflicts. Plaintiffs further allege that once the market
learned the truth about Goldman’s conflicts from a Govern-
ment enforcement action and subsequent news reports, the
inflation in Goldman’s stock price dissipated, causing the
price to drop and shareholders to suffer losses.
  After Goldman unsuccessfully moved to dismiss the case,
Plaintiffs moved to certify the class, invoking the Basic pre-
sumption. In response, Goldman sought to rebut the Basic
presumption by proving a lack of price impact. Both parties
submitted extensive expert testimony on the issue.
  The District Court certified the class, but the Second Cir-
cuit authorized a Rule 23(f ) appeal and vacated the class-

——————
   1 Although some Courts of Appeals have approved the inflation-

maintenance theory, this Court has expressed no view on its validity or
its contours. We need not and do not do so in this case.
6   GOLDMAN SACHS GROUP, INC. v. ARKANSAS TEACHER
                RETIREMENT SYSTEM
                  Opinion of the Court

certification order. 879 F. 3d 474 (2018). The Second Cir-
cuit held that Goldman, as the defendant, bears the burden
of persuasion to prove a lack of price impact by a prepon-
derance of the evidence. But it concluded that the District
Court erred by holding Goldman to a higher burden of proof
and by refusing to consider some of Goldman’s price impact
evidence.
   On remand, the District Court certified the class again,
finding that Goldman’s expert testimony failed to establish
by a preponderance of the evidence that its alleged misrep-
resentations had no price impact. The Second Circuit again
authorized a Rule 23(f ) appeal and this time affirmed in a
divided decision. 955 F. 3d 254 (2020). As relevant here,
the Court of Appeals held that the District Court’s price im-
pact determination was not an abuse of discretion. In dis-
sent, Judge Sullivan concluded that “the generic quality of
Goldman’s alleged misstatements, coupled with” Goldman’s
expert testimony, compelled the conclusion that Goldman
proved a lack of price impact. Id., at 278–279.
   We granted certiorari. 592 U. S. ___ (2020).
                             II
  Goldman argues that the Second Circuit erred in two re-
spects: first, by concluding that the generic nature of al-
leged misrepresentations is irrelevant to the price impact
question; and second, by placing the burden of persuasion
on Goldman to prove a lack of price impact. We address
these arguments in turn.
                              A
                              1
  On the first question—whether the generic nature of a
misrepresentation is relevant to price impact—the parties’
dispute has largely evaporated. Plaintiffs now concede that
the generic nature of an alleged misrepresentation often
will be important evidence of price impact because, as a rule
                     Cite as: 594 U. S. ____ (2021)                     7

                          Opinion of the Court

of thumb, “a more-general statement will affect a security’s
price less than a more-specific statement on the same ques-
tion.” Brief for Respondents 15; see Tr. of Oral Arg. 6–7, 59,
79. The parties further agree that courts may consider ex-
pert testimony and use their common sense in assessing
whether a generic misrepresentation had a price impact.
See Tr. of Oral Arg. 12, 64. And they likewise agree that
courts may assess the generic nature of a misrepresentation
at class certification even though it also may be relevant to
materiality, which Amgen reserves for the merits. See id.,
at 23, 65.
   We share the parties’ view. In assessing price impact at
class certification, courts “ ‘should be open to all probative
evidence on that question—qualitative as well as quantita-
tive—aided by a good dose of common sense.’ ” In re Allstate
Corp. Securities Litig., 966 F. 3d 595, 613, n. 6 (CA7 2020)
(quoting Langevoort, Judgment Day for Fraud-on-the-Mar-
ket: Reflection on Amgen and the Second Coming of Halli-
burton, 57 Ariz. L. Rev. 37, 56 (2015); emphasis added).
That is so regardless whether the evidence is also relevant
to a merits question like materiality. As we have repeat-
edly explained, a court has an obligation before certifying a
class to “determin[e] that Rule 23 is satisfied, even when
that requires inquiry into the merits.” Comcast Corp. v.
Behrend, 569 U. S. 27, 35 (2013); see Wal-Mart Stores, Inc.
v. Dukes, 564 U. S. 338, 351, and n. 6 (2011). And under
Halliburton II, a court cannot conclude that Rule 23’s re-
quirements are satisfied without considering all evidence
relevant to price impact. See 573 U. S., at 284.2
——————
  2 We recognize that materiality and price impact are overlapping con-

cepts and that the evidence relevant to one will almost always be rele-
vant to the other. But “a district court may not use the overlap to refuse
to consider the evidence.” In re Allstate, 966 F. 3d, at 608. Instead, the
district court must use the evidence to decide the price impact issue
“while resisting the temptation to draw what may be obvious inferences
for the closely related issues that must be left for the merits, including
8    GOLDMAN SACHS GROUP, INC. v. ARKANSAS TEACHER
                 RETIREMENT SYSTEM
                   Opinion of the Court

   The generic nature of a misrepresentation often will be
important evidence of a lack of price impact, particularly in
cases proceeding under the inflation-maintenance theory.
Under that theory, price impact is the amount of price in-
flation maintained by an alleged misrepresentation—in
other words, the amount that the stock’s price would have
fallen “without the false statement.” Glickenhaus & Co. v.
Household Int’l, Inc., 787 F. 3d 408, 415 (CA7 2020). Plain-
tiffs typically try to prove the amount of inflation indirectly:
They point to a negative disclosure about a company and an
associated drop in its stock price; allege that the disclosure
corrected an earlier misrepresentation; and then claim that
the price drop is equal to the amount of inflation main-
tained by the earlier misrepresentation. See, e.g., id., at
413–417; In re Vivendi, S. A. Securities Litig., 838 F. 3d
223, 233–237, 253–259 (CA2 2016).
   But that final inference—that the back-end price drop
equals front-end inflation—starts to break down when
there is a mismatch between the contents of the misrepre-
sentation and the corrective disclosure. That may occur
when the earlier misrepresentation is generic (e.g., “we
have faith in our business model”) and the later corrective
disclosure is specific (e.g., “our fourth quarter earnings did
not meet expectations”). Under those circumstances, it is
less likely that the specific disclosure actually corrected the
generic misrepresentation, which means that there is less
reason to infer front-end price inflation—that is, price im-
pact—from the back-end price drop.
                             2
  The parties do not dispute any of this. They disagree only
about whether the Second Circuit properly considered the
generic nature of Goldman’s alleged misrepresentations.

——————
materiality.” Id., at 609.
                     Cite as: 594 U. S. ____ (2021)                    9

                          Opinion of the Court

Because the Second Circuit’s opinions leave us with suffi-
cient doubt on this score, we remand for further considera-
tion.3 On remand, the Second Circuit must take into ac-
count all record evidence relevant to price impact,
regardless whether that evidence overlaps with materiality
or any other merits issue.
                           B
  Goldman also argues that the Second Circuit erred by re-
quiring Goldman, rather than Plaintiffs, to bear the burden
of persuasion on price impact at class certification. Gold-
man relies exclusively on Federal Rule of Evidence 301,
which provides in full:
        “In a civil case, unless a federal statute or these rules
     provide otherwise, the party against whom a presump-
     tion is directed has the burden of producing evidence to
     rebut the presumption. But this rule does not shift the
     burden of persuasion, which remains on the party who
     had it originally.”
According to Goldman, Rule 301 applies to the Basic pre-
sumption at class certification, and, as a result, a plaintiff ’s
satisfaction of the Basic prerequisites shifts only the bur-
den of production to the defendant. Once a defendant dis-
charges that burden by producing any competent evidence
of a lack of price impact, Goldman says, the Basic presump-
tion is rebutted and the plaintiff must carry the burden of
persuasion to show price impact.

——————
  3 Compare 955 F. 3d 254, 268 (2020) (“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”
(emphasis added)); id., at 270 (“The inflation-maintenance theory does
not discriminate between general and specific misstatements”), with 879
F. 3d 474, 485–486 (2018) (correctly requiring the District Court to con-
sider Goldman’s price impact evidence notwithstanding overlap with ma-
teriality).
10   GOLDMAN SACHS GROUP, INC. v. ARKANSAS TEACHER
                 RETIREMENT SYSTEM
                   Opinion of the Court

   We disagree. We have held that Rule 301 “in no way re-
stricts the authority of a court . . . to change the customary
burdens of persuasion” pursuant to a federal statute.
NLRB v. Transportation Management Corp., 462 U. S. 393,
404, n. 7 (1983). And we have at times exercised that au-
thority to reassign the burden of persuasion to the defend-
ant upon a prima facie showing by the plaintiff. See, e.g.,
Teamsters v. United States, 431 U. S. 324, 359, and n. 45
(1977); Franks v. Bowman Transp. Co., 424 U. S. 747, 772–
773 (1976).
   Goldman does not ask us to revisit these precedents. So
the threshold question here is not whether we have the au-
thority to assign defendants the burden of persuasion to
prove a lack of price impact, but instead whether we already
exercised that authority in establishing the Basic frame-
work pursuant to the securities laws. We conclude that
Basic and Halliburton II did just that.
   Basic held that defendants may rebut the presumption of
reliance if they “show that the misrepresentation in fact did
not lead to a distortion of price.” 485 U. S., at 248 (empha-
sis added). To do so, Basic said, defendants may make
“[a]ny showing that severs the link between the alleged mis-
representation and . . . the price received (or paid) by the
plaintiff.” Ibid. (emphasis added). Similarly, Halliburton
II held that defendants may rebut the Basic presumption
at class certification “by showing . . . that the particular
misrepresentation at issue did not affect the stock’s market
price.” 573 U. S., at 279 (emphasis added).
   Goldman and JUSTICE GORSUCH argue that these refer-
ences to a defendant’s “showing” refer to the defendant’s
burden of production. Post, at 6–8 (dissenting opinion)
(hereinafter the dissent). On this reading, Basic and Halli-
burton II require a defendant merely to offer “evidence that,
if believed, would support a finding” of a lack of price im-
pact. Post, at 5. But Basic and Halliburton II plainly re-
quire more: The defendant must “in fact” “seve[r] the link”
                      Cite as: 594 U. S. ____ (2021)                    11

                          Opinion of the Court

between a misrepresentation and the price paid by the
plaintiff—and a defendant’s mere production of some evi-
dence relevant to price impact would rarely accomplish that
feat.4
   Accepting Goldman and the dissent’s argument would
also effectively negate Halliburton II’s holding that plain-
tiffs need not directly prove price impact in order to invoke
the Basic presumption. 573 U. S., at 278–279. If, as they
urge, the defendant could defeat Basic’s presumption by in-
troducing any competent evidence of a lack of price im-
pact—including, for example, the generic nature of the al-
leged misrepresentations—then the plaintiff would end up
with the burden of directly proving price impact in almost
every case. And that would be nearly indistinguishable
from the regime that Halliburton II rejected.
   Thus, the best reading of our precedents—as the Courts
of Appeals to have considered the issue have recognized—
is that the defendant bears the burden of persuasion to
prove a lack of price impact. See Waggoner v. Barclays
PLC, 875 F. 3d 79, 99–104 (CA2 2017) (“the phrase ‘[a]ny
showing that severs the link’ aligns more logically with im-
posing a burden of persuasion rather than a burden of pro-
duction”); In re Allstate, 966 F. 3d, at 610–611 (“Basic said
that ‘[a]ny showing that severs the link’ would be sufficient
to rebut the presumption, not that mere production of evi-
dence would defeat the presumption” (citation omitted)).
We likewise agree with the Courts of Appeals that the de-
fendant must carry that burden by a preponderance of the
evidence. See Waggoner, 875 F. 3d, at 99; In re Allstate, 966
F. 3d, at 610.
   Although the defendant bears the burden of persuasion,

——————
  4 The dissent points out that, as a general rule, presumptions shift only

the burden of production. Post, at 2–4. We don’t disagree, but we read
Basic and Halliburton II as a clear departure from that general rule.
12   GOLDMAN SACHS GROUP, INC. v. ARKANSAS TEACHER
                 RETIREMENT SYSTEM
                   Opinion of the Court

the allocation of the burden is unlikely to make much dif-
ference on the ground. In most securities-fraud class ac-
tions, as in this one, the plaintiffs and defendants submit
competing expert evidence on price impact. The district
court’s task is simply to assess all the evidence of price im-
pact—direct and indirect—and determine whether it is
more likely than not that the alleged misrepresentations
had a price impact. The defendant’s burden of persuasion
will have bite only when the court finds the evidence in eq-
uipoise—a situation that should rarely arise. Cf. Medina v.
California, 505 U. S. 437, 449 (1992) (preponderance of the
evidence burden matters “only in a narrow class of cases
where the evidence is in equipoise”).
                         *    *    *
   The Second Circuit correctly placed the burden of proving
a lack of price impact on Goldman. But because it is unclear
whether the Second Circuit properly considered the generic
nature of Goldman’s alleged misrepresentations in review-
ing the District Court’s price impact determination, we va-
cate the judgment of the Second Circuit and remand the
case for further proceedings consistent with this opinion.

                                             It is so ordered.
                   Cite as: 594 U. S. ____ (2021)                 1

      SOTOMAYOR, J., Opinion
                     concurring
                             of SinOTOMAYOR
                                    part and,dissenting
                                             J.         in part

SUPREME COURT OF THE UNITED STATES
                            _________________

                            No. 20–222
                            _________________

        GOLDMAN SACHS GROUP, INC., ET AL.,
        PETITIONERS v. ARKANSAS TEACHER
            RETIREMENT SYSTEM, ET AL.
 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
           APPEALS FOR THE SECOND CIRCUIT
                          [June 21, 2021]

  JUSTICE SOTOMAYOR, concurring in part and dissenting
in part.
  I agree with the Court’s answers to the questions pre-
sented, and I accordingly join Parts I, II–A–1, and II–B of
the Court’s opinion. Under Basic Inc. v. Levinson, 485 U. S.
224 (1988), securities plaintiffs may demonstrate reliance
by invoking the rebuttable presumption that investors rely
on any misrepresentations reflected in a security’s market
price. Id., at 241–247. The Basic presumption is particu-
larly useful to class-action plaintiffs who, without the pre-
sumption, ordinarily could not demonstrate that questions
common to the class predominate over individual ones.
Ante, at 3–4. Defendants, for their part, may rebut the
Basic presumption by demonstrating that the alleged mis-
representations did not in fact affect the security’s price.
Ante, at 3. So-called “price impact” may be disproved with
a variety of evidence, alone or in combination. As the Court
holds today, one potentially relevant piece of evidence may
be the “generic nature” of the misrepresentation. Ante, at
6–8.
  I do not, however, join the Court’s judgment to vacate and
remand because I believe the Second Circuit “properly con-
sidered the generic nature of Goldman’s alleged misrepre-
2   GOLDMAN SACHS GROUP, INC. v. ARKANSAS TEACHER
                     RETIREMENT SYSTEM
      SOTOMAYOR, J., Opinion
                     concurring
                             of SinOTOMAYOR
                                    part and,dissenting
                                             J.         in part

sentations.” Ante, at 8. On appeal, Goldman did not con-
tend that the District Court improperly refused to consider
the generic nature of the alleged misstatements as evidence
of price impact (or lack thereof ). Instead, Goldman argued
that “general statements, like those challenged here, are in-
capable of impacting a company’s stock price as a matter of
law” because they are “ ‘too general to cause a reasonable
investor to rely upon them.’ ” Brief for Appellants in
No. 18–3667 (CA2), pp. 43, 46. Goldman reasoned that “the
challenged statements are incapable of maintaining infla-
tion in a stock price for the same reasons that those state-
ments are immaterial as a matter of law (as well as fact).”
Id., at 48.
   The Second Circuit properly rejected Goldman’s argu-
ment. The court explained that although “Goldman is not
formally asking for a materiality test,” its proposed rule
would “essentially requir[e] courts to ask” at the class-
certification stage “whether the alleged misstatements are,
in Goldman’s words, ‘immaterial as a matter of law.’ ” 955
F. 3d 254, 267 (2020). But “materiality is irrelevant at the
Rule 23 stage.” Id., at 268 (citing Amgen Inc. v. Connecticut
Retirement Plans and Trust Funds, 568 U. S. 455, 468
(2013)). “If general statements cannot maintain price infla-
tion because no reasonable investor would have relied on
them, then the question of inactionable generality is com-
mon to the class.” 955 F. 3d, at 268.
   In declining to adopt Goldman’s proposed rule that ge-
neric misstatements cannot have a price impact (as a mat-
ter of law), the Second Circuit nowhere held that the ge-
neric nature of an alleged misstatement could not serve as
evidence of price impact (as a matter of fact). Nor did the
Second Circuit refuse to consider such evidence in affirming
the District Court’s finding that Goldman failed to rebut the
Basic presumption. The Court nevertheless reads a hand-
ful of sentences in the Second Circuit’s opinion to create
                     Cite as: 594 U. S. ____ (2021)                     3

       SOTOMAYOR, J., Opinion
                      concurring
                              of SinOTOMAYOR
                                     part and,dissenting
                                              J.         in part

“doubt” over whether the Court of Appeals refused to con-
sider “all record evidence relevant to price impact.” Ante,
at 9; see also ante, at 9, n. 3. But such statements must be
viewed in the context of Goldman’s now-abandoned argu-
ment that generic misrepresentations have no price impact
as a matter of law. Take, for example, the Second Circuit’s
statement that “[w]hether alleged misstatements are too
general to demonstrate price impact has nothing to do with
the issue of whether common questions predominate over
individual ones.” 955 F. 3d, at 268. Fairly read in light of
Goldman’s appellate briefing, that sentence addresses only
Goldman’s argument that general statements are always
per se irrelevant. That is why the Second Circuit observed
several sentences later that “Goldman’s test is materiality
by another name.” Ibid. At the same time, the court was
careful to emphasize that defendants “may attempt to dis-
prove [price impact] at class certification” even though the
inquiry “resembles materiality.”* Id., at 267.
   In short, the Second Circuit did not address whether the
generic nature of a misstatement may be used as evidence
to disprove price impact for a simple reason: Goldman iden-
tified no error in the District Court’s treatment of such evi-
dence. Goldman did not press the argument in the Second
Circuit that it now urges here, and the Second Circuit did
not reject the proposition that this Court now adopts. Thus,
the argument Goldman seeks to press on remand is unpre-

——————
  *Indeed, in a prior appeal in this case, an earlier Second Circuit panel
vacated an order of the District Court in part because it had refused to
consider price-impact evidence that overlapped with materiality. See
879 F. 3d 474, 486 (2018) (holding that “[a]lthough price impact touches
on materiality, which is not an appropriate consideration at the class
certification stage,” courts nonetheless must consider evidence regarding
“[w]hether a misrepresentation was reflected in the market price at the
time of the transaction”). It is hard to imagine that the Second Circuit
here was unaware of (or intended to depart from) the prior panel’s hold-
ing.
4   GOLDMAN SACHS GROUP, INC. v. ARKANSAS TEACHER
                     RETIREMENT SYSTEM
      SOTOMAYOR, J., Opinion
                     concurring
                             of SinOTOMAYOR
                                    part and,dissenting
                                             J.         in part

served, and nothing in the Second Circuit’s opinion mis-
states the law. Because affirmance is appropriate under
these circumstances, I respectfully dissent from Part II–A–
2 of the Court’s opinion and from the judgment of the Court.
                  Cite as: 594 U. S. ____ (2021)            1

                     G
                     Opinion , J.,
                       ORSUCHof    dissenting
                                GORSUCH   , J.

SUPREME COURT OF THE UNITED STATES
                           _________________

                           No. 20–222
                           _________________

        GOLDMAN SACHS GROUP, INC., ET AL.,
        PETITIONERS v. ARKANSAS TEACHER
            RETIREMENT SYSTEM, ET AL.
 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
           APPEALS FOR THE SECOND CIRCUIT
                         [June 21, 2021]

   JUSTICE GORSUCH, with whom JUSTICE THOMAS and
JUSTICE ALITO join, concurring in part and dissenting in
part.
   I join all but Part II–B of the Court’s opinion. There, the
Court holds that the defendant, rather than the plaintiff,
“bear[s] the burden of persuasion on price impact.” Ante, at
9. Respectfully, I disagree.
   We start from common ground. Basic Inc. v. Levinson,
485 U. S. 224, 245–247 (1988), sought to import fraud on
the market theory from economics into securities litigation.
In doing so, Basic posited two things—first, in an efficient
market a company’s stock price generally reflects any pub-
lic and material information about the company; second, in-
vestors generally rely on a company’s stock price as an in-
dicator of the firm’s true value. Ibid. Given these economic
assumptions, the Court held that securities fraud plaintiffs
can presumptively meet their burden of proving reliance on
an alleged misrepresentation by proving four things: (1)
the defendant’s alleged misrepresentation was publicly
known; (2) it was material; (3) the stock traded in an effi-
cient market; and (4) the plaintiff purchased the stock at
the market price between the time the misrepresentation
was made and the truth was revealed. See Halliburton Co.
v. Erica P. John Fund, Inc., 573 U. S. 258, 277–278 (2014)
2   GOLDMAN SACHS GROUP, INC. v. ARKANSAS TEACHER
                RETIREMENT SYSTEM
                 Opinion of GORSUCH, J.

(Halliburton II).
   The presumption of reliance not only helps a plaintiff
prove one of the essential elements of a securities fraud
claim. Certain class actions require that “questions of law
or fact common to class members predominate over any
questions affecting only individual members.” Fed. Rule
Civ. Proc. 23(b)(3). So to the extent a court is able to pre-
sume reliance by everyone who purchased an affected stock,
Basic can help avoid individualized questions that other-
wise might stand in the way of proceeding with a securities
fraud action on a classwide basis. Erica P. John Fund, Inc.
v. Halliburton Co., 563 U. S. 804, 809–811 (2011) (Hallibur-
ton I).
   At the same time, Basic’s presumption of reliance has
only ever been just that. Everyone accepts that, if a defend-
ant undermines one of the assumptions on which it rests,
the presumption dissipates. So, for example, if the defend-
ant’s alleged misrepresentation did not actually affect the
market price, there can be no ground for presuming anyone
relied on that misrepresentation when purchasing the
stock. Halliburton II, 573 U. S., at 279. Similarly, if a par-
ticular plaintiff did not care about the integrity of the mar-
ket price when purchasing a stock, there is no basis for pre-
suming that individual’s reliance. Id., at 276.
   Before us, the only meaningful dispute concerns what
burden a defendant bears when it comes to rebutting the
Basic presumption. Does the defendant carry only a burden
of production, or does the defendant sometimes carry a bur-
den of persuasion? In my view, only a burden of production
is involved.
   Start with what we have said about presumptions like
Basic’s. This Court has long recognized that a “ ‘ “presump-
tion” properly used refers only to a device for allocating the
production burden.’ ” Texas Dept. of Community Affairs v.
Burdine, 450 U. S. 248, 255, n. 8 (1981). Throughout the
law, courts have sometimes created presumptions to help
                  Cite as: 594 U. S. ____ (2021)             3

                     Opinion of GORSUCH, J.

plaintiffs prove their cases when direct evidence can be
hard to come by. See Basic, 485 U. S., at 245. These pre-
sumptions operate by allowing the plaintiff to prove only
certain specified “predicate fact[s]” at the outset. St. Mary’s
Honor Center v. Hicks, 509 U. S. 502, 506 (1993). If the
plaintiff does so, an inference or “presumption” arises that
the plaintiff has met its burden of persuasion, at least “in
the absence” of some competing “explanation.” Ibid. (inter-
nal quotation marks omitted). At that point, the defendant
bears a burden of production to present evidence that, if
“taken as true,” would “permit the conclusion” that the pre-
sumption in the plaintiff ’s favor is mistaken. Id., at 509
(emphasis deleted). If the defendant produces such evi-
dence, the presumption “drops from the case.” Id., at 507
(internal quotation marks omitted). “[T]he trier of fact”
then “proceeds to decide the ultimate question.” Id., at 511.
Throughout this whole back-and-forth process, the burden
of persuasion never shifts: The “plaintiff at all times bears
the ultimate burden of persuasion” to prove all aspects of
its cause of action. Ibid. (internal quotation marks omit-
ted).
   The Court has explained that nearly “all presumptions”
operate in this way. Id., at 507. The Federal Rules of Evi-
dence confirm the point too. Rule 301, titled “Presumptions
in Civil Cases Generally,” provides that “the party against
whom a presumption is directed has the burden of produc-
ing evidence to rebut the presumption,” but “the burden of
persuasion . . . remains on the party who had it originally.”
Again, a burden of production may shift to the defendant,
but never the burden of persuasion.
   Title VII practice offers a familiar illustration of these
principles. There, the plaintiff bears the ultimate burden
of proving that his employer intentionally discriminated
against him because of his race or some other unlawful fac-
tor. See St. Mary’s Honor Center, 509 U. S., at 511. But
because direct evidence of intentional discrimination can be
4   GOLDMAN SACHS GROUP, INC. v. ARKANSAS TEACHER
                RETIREMENT SYSTEM
                 Opinion of GORSUCH, J.

“elusive,” the Court has created a presumption. See id., at
506 (internal quotation marks omitted). If a plaintiff proves
certain “predicate fact[s]”—for example, that he is black,
that he was fired from a job for which he was qualified, and
that the job remained open and was ultimately filled by a
white person—an inference or presumption of intentional
discrimination arises. Ibid. At that point, the defendant
bears the burden of producing evidence that, if accepted as
true, shows it fired the plaintiff for only legitimate business
reasons. Id., at 506–507. Should that happen, the pre-
sumption of intentional discrimination disappears and the
trier of fact must weigh the parties’ competing proof. Id., at
510–511. None of that means the plaintiff ’s indirect evi-
dence of discrimination also disappears. It simply means
the trier of fact must consider any inferences arising from
that indirect evidence while also considering the defend-
ant’s evidence and any other proof the plaintiff submits.
See id., at 511. “[A]t all times” throughout the litigation,
however, the plaintiff bears the “ultimate burden of per-
suading the trier of fact that he has been the victim of in-
tentional discrimination.” Id., at 507–508 (brackets and in-
ternal quotation marks omitted).
   Since the Court first started tangling with the fraud on
the market theory in Basic, it has followed these traditional
rules. Consistently, our decisions have “made clear” that
Basic’s “presumption” of reliance is “just that.” Halliburton
I, 563 U. S., at 811. Much as the Court said it created the
Title VII presumption to help prove the “elusive” question
of intentional discrimination, Basic said it created its pre-
sumption of reliance to relieve “an unnecessarily unrealis-
tic evidentiary burden” on securities fraud plaintiffs. 485
U. S., at 245. And when creating its presumption Basic ex-
pressly cited Rule 301. Ibid.
   The process Basic outlined matches traditional under-
standings too. The Court explained that a plaintiff ’s ability
to prove certain “threshold facts”—about market operations
                  Cite as: 594 U. S. ____ (2021)              5

                     Opinion of GORSUCH, J.

and the publicity of the misstatement—gives rise to a “pre-
sumption” of reliance. See id., at 248, and n. 27. After such
a showing, the Court continued, a defendant may then pro-
ceed to “rebut the presumption.” Id., at 248. Nowhere in
any of this did Basic suggest the order of operations govern-
ing its presumption should differ in any way from those gov-
erning others commonly found in the law and subject to
Rule 301. Nor is there any doubt which party has the bur-
den of persuasion on the question of reliance in securities
fraud cases like ours. From start to finish, the plaintiff has
the burden to satisfy that essential element of its claim.
Basic’s presumption of reliance thus “does not shift” any
burden of persuasion—that always “remains” with the
plaintiff. Fed. Rule Evid. 301; see also St. Mary’s Honor
Center, 509 U. S., at 506–508.
   Consider how all this works in routine securities fraud
cases. Once a plaintiff proves the four “predicate facts”
Basic specified, see supra, at 1, a presumption of reliance
attaches. At that point, the defendant bears the burden of
producing evidence that, if believed, would support a find-
ing that the plaintiff did not actually rely on its alleged mis-
representation. As we have seen, a defendant might do so
by producing evidence suggesting that its alleged misrepre-
sentation did not have an impact on market price or that
the plaintiff was indifferent to the alleged misrepresenta-
tion. Upon such a showing, the presumption of reliance
drops from the case and the trier of fact must decide the
question of reliance vel non, cognizant of the fact the plain-
tiff bears the burden of proving reliance like any other es-
sential elements of its claim. Again, that does not mean the
plaintiff ’s indirect proof disappears. A court may still infer
from the Basic predicates that a particular misstatement
was incorporated into the stock price and that the plaintiff
relied on the integrity of that price. Both sides are free to
present additional proof too. It’s simply that a court no
longer must find reliance. See St. Mary’s Honor Center, 509
6   GOLDMAN SACHS GROUP, INC. v. ARKANSAS TEACHER
                RETIREMENT SYSTEM
                 Opinion of GORSUCH, J.

U. S., at 511.
   The Court disputes none of this. It does not even try to
defend on the merits its unusual suggestion that the de-
fendant carries some burden of persuasion in a plaintiff ’s
claim for securities fraud. Instead, the Court contends only
that precedent ties our hands.
   Primarily, the Court points to a single clause in a single
sentence in Basic observing that a defendant may rebut the
presumption of reliance with “[a]ny showing that severs the
link between the alleged misrepresentation” and the stock
price. See ante, at 10 (quoting Basic, 485 U. S., at 248) (em-
phasis deleted). The Court then splices that clause together
with another clause in a preceding sentence explaining
that, before Basic, lower courts had said a defendant rebuts
the fraud on the market presumption by showing “that the
misrepresentation in fact did not lead to a distortion of
price.” Ante, at 10 (quoting Basic, 485 U. S., at 248; empha-
sis deleted).
   But what does this prove? Surely this language confirms
an important and by now familiar point: Once a defendant
produces evidence that, if believed, shows that fraud on the
market theory does not hold in its particular case because
its alleged misrepresentation in fact failed to affect the
stock price, the presumption of reliance drops away. On the
Court’s reading today, however, this language doesn’t just
carry that obvious meaning. We are told it also must mean
that Basic intended to shift the “burden of persuasion” with
respect to “price impact” to the defendant—at least “at class
certification”—because the “mere production of some evi-
dence relevant to price impact would rarely accomplish
th[e] feat” of “in fact” “ sever[ing] the link between a misrep-
resentation and the price paid” for the stock. Ante, at 10–
11 (internal quotation marks omitted; emphasis deleted).
   That much does not follow. Not only has this Court often
said it is a mistake to parse terms in a judicial opinion with
the kind of punctilious exactitude due statutory language.
                  Cite as: 594 U. S. ____ (2021)            7

                     Opinion of GORSUCH, J.

See Reiter v. Sonotone Corp., 442 U. S. 330, 341 (1979).
Even read for all they are worth, the handful of words on
which the Court rests its entire holding today—a “showing”
that “in fact” “sever[s] the link”—cannot begin to carry the
weight the Court assigns them. See ante, at 10 (emphasis
deleted). These terms do not even appear together in Basic:
The Court has to pluck the phrase “in fact” from one sen-
tence and the phrase “[a] showing that severs the link” from
another, and then combine them to create a new clause that
appears nowhere in the U. S. Reports—a “showing” that “in
fact sever[s] the link.” Ante, at 10 (internal quotation
marks omitted). Even then, the Court’s newly handcrafted
phrase does not so much as mention the terms “burden of
persuasion” or “price impact.”
   The hard truth is that in the 30-plus years since Basic
this Court has never (before) suggested that plaintiffs are
relieved from carrying the burden of persuasion on any as-
pect of their own causes of action. To the contrary, when
discussing the presumption it created, Basic expressly ref-
erenced Rule 301 and invoked its normal order of opera-
tions. And this Court has long explained that presumptions
“properly used” refer only to devices “for allocating the pro-
duction burden,” and not the burden of persuasion. Bur-
dine, 450 U. S., at 255, n. 8 (internal quotation marks omit-
ted). Are we really to believe that Basic—while referencing
traditional understandings embodied in Rule 301 and just
seven years after Burdine—secretly meant to depart from
traditional and “proper” understandings about how pre-
sumptions work? Thanks to spliced clauses found in two
sentences this Court has never before read that way? All
while using words that carry another and much more natu-
ral meaning? To state the theory is to refute it.
   If Basic doesn’t command today’s result, the Court offers
a backup theory. Separately, it insists, Halliburton II re-
quires us to shift a burden of persuasion to the defendant.
Specifically, the Court points to the fact that Halliburton II
8   GOLDMAN SACHS GROUP, INC. v. ARKANSAS TEACHER
                RETIREMENT SYSTEM
                 Opinion of GORSUCH, J.

reaffirmed Basic’s holding that a plaintiff need not show re-
liance “directly,” but may do so “presumptively” by carrying
the burden of proving the four Basic factual predicates. 573
U. S., at 278. A decision holding that the defendant merely
bore the burden of producing evidence suggesting a lack of
price impact at class certification, the Court now submits,
“would be nearly indistinguishable from the regime that
Halliburton II rejected.” Ante, at 11.
   That much does not follow either. Like Basic, Hallibur-
ton II concerned what facts a plaintiff must produce to gen-
erate a presumption of reliance. This case is about what
defendants must do to rebut that presumption. Deciding
one does not resolve the other. To say these issues are “in-
distinguishable” is to miss the entire point of a presump-
tion: It allows the plaintiff to state a prima facie case based
on inference and requires the defendant to bear the burden
of producing evidence in response; once the defendant does
so, the presumption has served its purpose and drops from
the case. At that point, the factfinder now has the benefit
of evidence from both sides and must decide the case with
reference to the plaintiff ’s burden of persuasion. Nothing
in Halliburton II suggests a departure from these princi-
ples, let alone that some burden of persuasion secretly
shifts to the defendant in a plaintiff ’s claim for securities
fraud. To the contrary, that decision arose in the class cer-
tification context and expressly reaffirmed that “[t]he Basic
presumption does not relieve plaintiffs of the burden of
proving” they have satisfied “the predominance require-
ment of Rule 23(b)(3).” 573 U. S., at 276.
   The Court has no answer to any of this. Instead, it replies
only by touting the fact that two Court of Appeals decisions
have read Basic and Halliburton II as it does. Ante, at 11.
But this is a non sequitur. The Court does not suggest that
a pair of lower court opinions represents some robust judi-
cial consensus. Nor does the Court suggest those opinions
free us from having to interpret the law for ourselves. After
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                      Opinion of GORSUCH, J.

all, “[o]ur duty is to follow the law as we find it, not to follow
rotely whatever lower courts might once have said about it.”
BP p.l.c. v. Mayor and City Council of Baltimore, 593 U. S.
___, ___–___ (2021) (slip op., at 11–12). The fact remains
that nothing in our prior decisions has ever placed a burden
of persuasion on the defendant with respect to any aspect
of the plaintiff ’s case. It is incumbent on the plaintiff to
prove reliance, not the defendant to disprove it. If a major-
ity of the Court today really believes some novel new bur-
den of persuasion should be placed on the defendant, it
ought to say so. Past decisions—by this Court or others—
cannot be blamed for today’s result.
   Perhaps recognizing the incongruity of its conclusion, the
Court goes out of its way to downplay its significance. We’re
told that “on the ground” today’s holding “is unlikely to
make much difference” because “[i]n most securities-fraud
class actions . . . the plaintiffs and defendants submit com-
peting expert evidence on price impact.” Ante, at 12. And
in cases like these, “[t]he district court’s task,” according to
the Court, “is simply to assess all the evidence of price im-
pact” and “determine whether it is more likely than not that
the alleged misrepresentations had a price impact.” Ibid.
   This is a curious disavowal. Obviously, the Court thinks
the issue important enough to spend the time and effort to
rejigger the burden of persuasion. Now, though, it says
none of this matters because most cases come down to a dis-
pute over evidence of price impact irrespective of the pre-
sumption. The Court’s suggestion that the burden of per-
suasion will “rarely” make a “difference” misses the point
too. The whole reason we allocate the burden of persuasion
is to resolve close cases by providing a tie breaker where the
burden does make a difference. That close cases may not be
common ones is no justification for indifference about how
the law resolves them.
   Respectfully, I dissent.