The Supreme Court issued its decision in Goldman Sachs Group, Inc., v. Arkansas Teacher Retirement System on June 21, 2021. Justice Barrett delivered the opinion of the Court, which Chief Justice Roberts and Justices Breyer, Kagan, and Kavanaugh joined in full.
In this case, a group of Goldman shareholders sought to certify a class action suit against Goldman arguing that they had detrimentally relied on Goldman’s alleged misrepresentations about conflict management, which had resulted in inflation maintenance and subsequent shareholder loss. In arguing for class certification, the plaintiffs relied on the Supreme Court’s 1988 Basic Inc. v. Levinson decision allowing plaintiffs to prove reliance based on evidence common to the class. Goldman argued against certification and against the Basic presumption by presenting evidence showing the alleged misrepresentations had not affected stock prices.
On its second attempt, the District Court certified a class and the Second Circuit affirmed. In its decision, the Supreme Court remanded to the Second Circuit to consider the generic nature of the alleged misrepresentations even though that evidence might get to materiality not usually considered at the initial certification stage under Rule 23. The Court also clarified the Basic presumption holding that a defendant does bear the burden of persuasion to rebut the presumption of reliance allowed to class action plaintiffs.
Featuring:

Theodore "Ted" Frank, Director of Litigation and Senior Attorney, Hamilton Lincoln Law Institute

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