it was a significant capital investment and what made it unique your honour's was it was a repeatable process it could be reused across state customers and it was a plug and play unit that's what they wanted to be and optimistic we think it's better we got troubles so what's the problem i'll push back a little bit on that your honor the statements about the platform that described the platform defendants referred to them as it was a plug in play unit it was a repeatable solution it could be really used across the customers and we've amassed evidence in this complaint which makes this case unique we have documents showing that this was not a reusable solution for example in california we have internal documents that we received through a freedom of information act request stating that while this was heavily marketed as a transfer system it appears to be a custom built in e mail that are california xerox stating this is nowhere close to a scalable product we have to be transparent here that this is a custom application in june of two thousand and thirteen we have another document we're california officials are noting that xerox officials are creating quote unquote new software as opposed to using the existing product as was originally intended in addition we have confidential witnesses who worked on the very state implementation stating that this was not reusable product for example your honor a confidential witness number one who is a former employee who worked on the north dakota implementation stated again who worked on the implementation stated this is not a transferable product we don't have a product to trance for confidential witness number two who worked on alaska stated that while the intent was to create a canned product it never existed more over yonder and this is critical because the district court did not address this on april th two thousand and fifteen the company admitted in one of our corrective disclosures that the product did not exist that they were still working to create a standardized platform let me actually state that in from  that statement for the record this was on our april th two thousand and fifteen defendant zap pool and xerox stated on a conference call that they were still quote working to consolidate the customized instances of health enterprise into a standardized platform that would then be less costly to implement and manage going forward that is completely counter to the statements they made throughout the class period saying that this could be reuse the cross states that this was a coat plug and play unit and what the district court did hear your honour's and this is really where we believe the clear error lies is the district court disregarded what defendants said about health enterprise that it disregarded the characterizations that are characterizations of health enterprise and of that looked at the american heritage dictionary and because the american heritage dictionary defines the term platform as computer architecture and because health enterprise was a computer program that necessarily the statements about the platform were not actionable that is clear error because again the defendants characterize the term health enterprise platform as reusable repeatable and a plug in play unit and don't take our words for your honour's look at what analysts said we quote two of them a and ninety six dollars nineteen cents of our complaint j p morgan and piper jaffray both took what defendants were saying is that health enterprise provided the company with a quote unquote competitive advantage why because it could be implemented at low incremental cost which would drive margins the question is to what extent was this were ves statements about repeatability plug in pay and so on to what extent were voters statements of fact about what these big was at the time witi were selling  in what to what extent were very statements of what they were hoping to achieve trying to do because we knew that that is what would make it a viable and important actually ron i think what the district court did was to find that the statements were not actionable because they had a computer program respectfully the the way the defense let me back up for a nd when you look at the manner in context of presentation of these statements which is what the nd circuit held we need to do in the smith barney case which we cite in our briefs this was a company that was going from a traditional hardware company to a services company and as part of that they were investing in platforms quote the whole thing that ended up costing money no your honor what happened was they claimed that it was a reusable unit but as reflected in the documents that we have in black and white it was not a reusable product it was a custom build and what's interesting here is the prior m i a s of the prior medicaid platforms required custom building across states what made according to xerox what made health enterprise unique what gave the company a quote unquote competitive advantage was this was a reusable product this was a plug and play product and plug and play if we're going to resort to dictionary definitions great question is if we if you look in the dictionary what plug n play means well the and that's that was kind of my alternative point is if we are going to resort to dictionary definitions what plug n play means in computer computer lingo if you take it out of a box you plug it into the wall and it plays without modification and that's what they were representing to and your honor as i mention when you when you look at the statements as you must in their entirety the reps and the i think we have to do to what extent this is people who are developing something know what it means what you just said then why all of a comments about problems i mean why all the comments about but it ain't workin yet but we're not making money yet but we are flat yet but are vis yet but we may be soon but we're not yet you know all those feelings which are quite inconsistent we're saying hey we've got kids so i don't know if i may dressed up i know i'm out of time if i may address the point your hon r the statements they were making about cost overruns or the statement about we need a little bit of the system needs to be modified from from transaction to transaction no where in those statements did they say we don't have a plug in play unit what they said was these are onetime charges we're having a little bit more difficulty standing up this platform but they continued to we you know where said we don't have a few quarters so the q one results were not unexpected the largest factor is the ramp of new contracts which we estimate is two thirds of the margin decline it's day one the c e o on the same day da describing the complexity here and including talking about how hard it is to stand up the the these systems it's hard the c e o says it's hard to do it's reusable it doesn't mean just like you i'm every few minutes more minutes maybe an exaggeration but what weeks is not for sure in days sometimes i get a notification that i need an update on some some rather software was implemented health enterprise was implemented in new hampshire in north dakota and in alaska so we know and in fact one of the confidential witnesses sense we took i think it was the one in north dakota was confiden one who confirmed that they took the new hampshire platform and re used it in north dakota now one of their problems was it perfect did there need to be updates in corrections all along  different climate or a different thing in north dakota but because of the thing was was not in fact usable was something that had to be custom made in each ust of the argument is that the word platform you see platform when you use the term plug in play that means all right we take the platform we just keep replicating it without significant costs in each state and yet fact correct no no i have no idea what computer talk is so for me a platform is something i stand on to catch a train write you know why you know what any of this other stuff is but the question that you have to address is was for you that without more clarification sufficiently be sleepy that's what the others are and so the answer right and so the answer is the platform is a computer or architecture of palm which other applications may run and we made very clear that we can reuse so there are several times we talked about  using that platform putting other applications on it so we say actually also on the st day of the other class period as we put up locations or states on that new is the underlying architecture that's what the dictionary definition is that's what the reasonable investor understands it to be and then you take it and you have to make lots of changes to it state by state  particularly in a sneery like this when you're dealing with every state has different how could you possibly every state has different rules different hospitals how could you pilot different eligibility requirements how could you possibly think you're going to it's people who are following in this you know people who are reasonable investors they're not they think you can take some of the arab box and in a complicated system like this and just reapply and just apply  want to get the plug in play because it's been mentioned a couple times that so plug n play was used once it's on march th two thousand and thirteen this is in statement twenty seven and it's mary scan n saying if they want a plug and play so she's talking about it's ground up it's a service oriented architected platform and the reason why that's important is because  allows us to provide the states with the platform if they want to plug and play with different capabilities than they have they're allowed to do that she's actually talking about not the plug in play if you plug the platform in and it completely mischaracterized and again literally that same day scanlan also says that health enterprise quote gives the states data and intelligence for them to build their at the state level  let me respond to a few of your of counsel's points first of all defendants characterize the health enterprise platform as repeatable replicable and plug and play it was their terms it wasn't just the term platform but it was their use of the term platform and according to the company they repeatedly touted the fact that because it was reusable it provided a quote unquote competitive advantage let me read a statement into the record this is from may th two thousand and twelve it's a pair of one hundred and seventy five dollars our complaint states now that we've got the platform we can reuse the platform as we acquire new contracts and therefore our cost of the livery of those contracts is going to be significantly lower than what our competitors can offer this was a high a hard statement a present representation of the existence of a platform they could be it was modular and could be used from state to state council said that it was reused it was custom built in alaska new hampshire and north dakota they had some base code but it had to be custom built for example in alaska at five hundred dollars times the price of what the budget said and multiple years after it was supposed to be delivered and ultimately with these cost overruns and these extensive delays this aspect of the business methods demise because this was not a customizable project or product let me just touch on the modification language because council mentioned that defendant burns on october th two thousand and thirteen did say i did use the word modification but exactly what she said and this is noticeably absent from defendant's brief but what she said was only a little bit of the system needed to be modified the bulk of the investment does not have to change that is absolutely consistent with the idea of having a really usable