Goldman Sachs Group, Inc. v. Arkansas Teacher Retirement System (20-222)

argument 20-222

Goldman Sachs Group, Inc. v. Arkansas Teacher Retirement System

Supreme Court of the United States 1h 23m 8 speakers 8 chapters transcribed 7 days ago official recording ↗

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What is the central legal dispute over the “basic presumption” in this case?

John G. Roberts 0:00

We will hear argument this morning in case twenty two two two Goldman Sachs Group versus Arkansas Teacher Retirement System. mister Shan Magam?

Unknown 0:10

Thank you, Mr. Chief Justice, and may it please the Court. In this case, the Court of Appeals 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 two legal errors. First, the court refused to consider the generality of the statements as evidence tending to disprove price impact. As respondents now agree, a court 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.

Unknown 0:52

Second, the Court of Appeals erred by holding that the basic presumption shifted the ultimate burden of persuasion to a defendant on the issue of price impact. Rule three hundred one governs presumptions, and it shifts only the burden of production unless a statute or rule provides otherwise. Basic plainly created a presumption, and Congress has not even recognized 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.

Unknown 1:32

While Halliburton 2 held out the promise that defendants would be able to rebut 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 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 II 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.

Unknown 2:11

I welcome the court's question.

John G. Roberts 2:13

Uh Mr. Shamagam, you said that the respondents now uh agree with you that the um generic nature of the statements can be uh considered and you said uh

Sonia Sotomayor 2:25

John G. Roberts 2:26

that W in in discussing any possible difference you focused on their uh argument that expert testimony uh is required. I is there any daylight on the substantive question uh between the two of you concerning the generic statements?

Unknown 2:44

I don't think so, Mr. Chief Justice, because respondent concedes at page twenty six of their brief that a more general statement is relatively less likely to affect a securities price. And that is our fundamental submission on the first question presented. And to the extent that respondents suggest that an expert is required, we think first that that is contrary to this court's direction in Halliburton two, that any evidence evidence relevant to price impact should be considered. And second, we did have an expert, Dr. Starks, who elaborated on the relevance of the nature of the statement.

John G. Roberts 3:19

So you think it's okay to submit expert uh testimony on that question if you want to, you just don't think it's required?

Unknown 3:26

Uh that is correct, Mr. Chief Justice. We think that the nature of the statements 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.

John G. Roberts 3:42

So what is the debate between the between two parties on whether a statement is sufficiently generic What does it look like? I mean you have a statement of the sorts at issue here I mean does one p side say, well you can tell from common sense that this uh i i i is is too generic and the other side says, No, my common sense says it's not?