Professor Imwinkelried Signs Amicus Brief in Goldman Sachs Suit

In late August, Professor Edward Imwinkelried joined as a signatory to an amicus brief filed in Case No. 16-250, a securities law case now pending before the U.S. Court of Appeals for the Second Circuit.  In the case, several retirement funds are suing Goldman Sachs Group.  The plaintiffs argue that the defendant's fraudulent misrepresentations affected their decisions to either buy or sell stock and thereby caused the plaintiffs economic losses. 

In part, the plaintiffs rely on the fraud-on-the-market presumption previously recognized by the U.S. Supreme Court.  According to that presumption, if a plaintiff shows that the defendant made a misrepresentation relevant to the market price of stock the plaintiffs purchased or sold, it is presumed that the plaintiffs relied on the misrepresentation.  Once the presumption arises, the defendant has the burden of showing that its conduct did not affect the plaintiff's decision to buy or sell.

In this case, Goldman Sachs argues that the presumption violates Federal Rule of Evidence 301.  Rule 301 provides that in the typical case, a presumption shifts only the initial burden of production and does not shift the ultimate burden of proof to the party resisting the presumption.  The amici argue that the recognition of the fraud-on-the-market presumption does not run afoul of Rule 301.

The amici include Professor Daniel Capra, the Reporter for the Federal Rules of Evidence Advisory Committee, as well as six of Professor Imwinkelried's coauthors on various treatises and texts.