Goldman Ruling is a Boon for Class Action Defendants


Peter B. Morrison Noelle M. Reed

Partners Noelle Reed and Peter Morrison review the recent decision in Goldman Sachs Group Inc. v. Arkansas Teacher Retirement System, in which the U.S. Supreme Court held that courts may consider at the class certification stage the generic nature of alleged misrepresentations as evidence of the lack of price impact when defendants attempt to rebut the Basic presumption of classwide reliance, even if it overlaps with the merits question of materiality. The court also held that defendants seeking to rebut the presumption of reliance bear not only the burden of production, but also the ultimate burden of persuasion to prove lack of price impact by a preponderance of the evidence.