case number one seven one seven zero one rod the wallace and others versus spear eon there are putin incorporated and others arguments not to exceed fifteen minutes per side mr the movement's appellants the owners i'd request to reserve three minutes for rebuttal uars on september twenty eighth two thousand and fifteen defendants asperin and mail it been demonstrated that their statements on aug seventeenth at that on meth need population could be approved prior to the completion of a cardiovascular outcomes trial or c v o t they also made clear that the f d a had not decided that the risk benefit ratio for that high on met need population was appropriate and they also made clear that the f d a had not confirmed that l d l cholesterol reduction would remain an appropriate surrogate endpoint for espiritu trials but on august seventeenth they said the opposite as to each one of those facts now your honour's under p r diamonds this court presumes that and at the top executives of the company are aware of the most important facts regarding that company and there were no facts more important to a sperry and then the f d a approval of its medication second all of the statements that i've just described described what happened in early august they are statements of historical fact so they are not forward looking statements covered by the safe harbor now your honour's there is a dispute between the parties as to the significance of the minutes of the f d a meeting that were revealed just prior to the september twenty eight statements the defendants argue that that was a new fact that the defendants couldn't have been aware of when they spoke on august seventeenth but that doesn't jibe with what the f d a describes these meetings see those meetings minutes as fulfilling the f guidance says that those minutes are the official record of what transpired at the meeting so what they are is the official record of what happened in early august there are not new facts that were learned only in september of two thousand and fifteen transcribe it is just the minutes of the i agree you are it is not a transcript it's the minutes of the meeting but as was made clear in the statements that spirit of mr mailer been made those discussions between the claim that that it was discussed at the meeting and that that minutes don't really reflect what happened at the may no they didn't say that what they did say was that their statements on august seventeenth were based upon the information conveyed to them by the f d a and that in paragraph twenty one of the complaint they said based on feedback from the f d a the approval of e t c one thousand and two will not require the completion of a c o t but then in september twenty eight when they were making these statements and they're getting all this pushback from the analysts who had recognized the strain discrepancies between the aug seventeenth statements and the september twenty eighth statements the mr mailed and never said well the f d a got it wrong or the f d a changed their mind there's no indication from them at all that the f d a had somehow pulled the rug out from under them so basically you have a situation where they just simply said something completely different about the same meeting in two separate statements they're only a month apart and i think that the analysts contemporaneous reactions pretty much demonstrate the very substantial discrepancies between the two particularly if you look at  the one statement they're saying that the f d a had confirmed in the past tense the f d a had confirmed that the surrogate endpoint the woods remain acceptable well later on when they were explained their statement september twenty eighth they said well there's now there's doubt about whether or not it will continue the l d l cholesterol reduction will continue to be a an acceptable surrogate endpoint so those two statements they just they can't go together sustained it's number one number two we're claiming knowledge or recklessness either way and i think that the basis for finding knowledge or recklessness here are the the very sharp distinctions between what they said on the two different occasions as i was just pointing out it is a big difference between the f d a confirmed that l d l cholesterol reduction can be a surrogate endpoint will continue to be versus the explanation that mr mailer been gave in response to the analysts questions about that very same discrepancy where he said well you know there's doubt about whether it will continue being a continued to be an accepted surrogate endpoint so that there are very sharp distinctions between what they said that's number one number two the defense in their brief say th been confused he may have misunderstood if you're confused or not exactly sure what you what you heard you can't say on august seventeenth the sorts of very definitive statements that mr mailer been  made for instance he said we know that they will not require us to complete the cvo t before getting approval and that's at paragraph thirty two we know is a very strong statement it's not you know we interpreted them to mean this or we think this is what they mean or as a district court found this is what the history suggests to us they said we know never before required this test you're out of there was a history of the come out and said like your honor just suggested based upon the history here we think that if this is going to continue to be an accepted surrogate endpoint then we would have a very different case but that's not what haggard looking well your honor it's  not for looking when you're saying what was said to me if i just repeated your honour's question you know that would just be a statement of a historical fact and that's what happens here is that this meeting between asperin and f d a occurred in early august and they gave an account of that meeting that's backward looking not forward looking and they said what it was that f d a said to them f d a confirmed that's a statement that they made that's in the past tense even so it's definitely not forward looking statements i think if you look at this court's decision in miller that the defense rely on you have a very careful analysis where this court parsed out each portion of the statement and identified forward looking portions and that's not the sort of analysis of occurred here the district court that would warn investors that what we said may not be true for instance they stepped in they said the f d a considers this to be an acceptable surrogate endpoint but what we but they may not really have considered to  be a surrogate and point that this isn't make any sense your honor so i think that and that's really what they said in quality systems they said knew that if the present statements are simply false the only way to give an adequate warning is to admit that they're false and  that didn't happen here but i guess the other point your honor is is these statements aren't forward looking so we don't even really need to get to that question  i'd also like to briefly address the case which the district court relied on which i think is entirely distinguishable from this case here we have a situation where the other defense or to simply saying mr maile prosser regarding statements where you don't really have a basis so i think it's reckless in either regard but in kuki there are actual facts that the defendants could point to and they wanted to change from an intent to treat population to a modified intent to treat population and when it turned out that the f d a really only wanted the eye or intent to treat population the defense that case were able to point out to the fact that they had submitted an application asking to use the mit population and the f d a accepted that and so this court found that that acceptance by the f d a gave the company reason to believe so that's actually a fact that was in the record that you could inference about the company's belief but there's nothing in this record that supports that sort of thing the defense is want to say well you know he got everything wrong in september twenty eighth compared to august seventeenth so therefore he must be confused and they're doing that without pointing to record evidence as they did in i'd also like to point out that in addition to this court's decision and p r diamonds there are several of the of the hellwig factors that support is here there's divergence between what the defendants were told as revealed in the f d a minutes that they spoke regarding on september twenty eighth there's disregard of the most current factual information because when they spoke falsely on august  seventeenth the meeting that they spoke falsely about had occurred only the week before so that was the end of the meeting was the most recent information that they had had and there's also the question of closeness in time they had to reveal the falsity of their statements basically only a month later in addition i think that the fact that mr malins compensation depends upon his on the stock price is also supporting fact and i would point out that even though there are no no insider trading in this particular case in the supreme court's decision intel labs and then the seven circuits follow on that basically the same situation where there was no evidence of stock sales but both of those courts found that there was sufficient evidence to support a saner inference high level executives can be presumed to be aware of matters central to their businesses operations and that's it three sixty four fed third sixty eight and that basically hits the nail right on the head the seventh circuit has a similar analysis in may core and the  good morning on what my colleague did not discuss in what i think judge donald question was getting at is c an't or c enter in this case under this court's precedent is an independent basis for dismissal and what plaintiffs don't discuss is that the private securities litigation reform act has a heightened pleading standard for c enter that is intentional fraud or recklessness within the circuit but it is our strong inference meaning this court has to balance under the supreme court precedent and tellabs and find that the inference of fraud is equally as cogent and compelling as the non fraudulent inferences and here what we have much stronger than in this court doshi case in twenty sixteen where there was a finding of no c enter on several of the hellwig factors being present but still no see enter here there are zero factual allegations that get to mr mailer ben's state of mind in august when he made these statements and he said we can only speak as it relates to what we think we're hearing but we have to wait for the f d a is minutes which everyone knows under the guidelines this i'm sorry one of the first part of your question i couldn't hear well he could have been mistaken about what happened that maybe because the minute showed that that's not work or actually are on of the minutes don't show that the minutes are not in the record in this case what's in the record in this case we're going to plant plaintiff's claim they don't have the minutes they haven't seen minutes in the minutes i hear plaintiff's claim the inconsistency with the company's description after receiving the f d a is minutes which it acknowledged in august are the only minutes that matter which is why they said we have zero percent zero interest in front running the f d a on this and the f minutes are the only ones that matter we're going to wait for them after those minutes were received a spearing on september statements clarified that the future of event whether f d a will or will not require the cardiovascular outcomes trial to be completed that it could happen another words the inconsistency that plaintiffs point to are the two companies statements but they don't want to ledge any facts whatsoever this is a one month fraud that makes no sense they don't allege any benefit they talk about motives generally such as counsel just mentioned compensation but the stock price declined by fifteen percent the day after the august statements and conference call and continued to lose fifty percent of its value by september twenty fifth before the september twenty eighth statements they don't allege mr mayer ben had any personal benefit in compensation they don't that requirement that showed speaker benefit motive and opportunity are not required but the absence of motive is probative to the lack of c enter what is required to your honor his particular eyes facts that gets your mr maylie bend state of mind they don't have the usual methods here which are confidential witness statements talking about internal disagreement plaintiffs point to a divergence the hellwig factor between internal and external statements but they don't point to any internal statements in other words what it amounts to is because august and september are inconsistent statements defendants must have known and must have formed a strong inference of see enter intent to mislead recklessness in the circuit is akin to conscious disregard and this court has repeatedly required things multiple red flags that are willfully ignored those that were present in doshi even when millions in incentive compensation that were received and that the alleged accounting fraud was over many years and huge in scope the court this court still found no see enter because there was nothing showing at the time of the statements were made which is critical at the time the statements were me that mr maylie ben had any intent to to mislead in fact everyone knows when there's a verbal meeting that there's the potential that people come away with different understandings cholesterol so that's why they describe that as a high unmet medical need what mr mailer been said in august was as to that high unimagined medical need population we can only speak as it relates to what we think we're hearing and we need to wait for the f d a minutes which will have f d a says official position your honor but what we think we're hearing is that a cardiovascular outcomes trial will not be required to be seaview t but your honor what it doesn't show that statement is the state of mind of mr miliband i want to bring it back to that because what's utterly absent here is any fact as to why he would say anything but what the company's understanding in all the cases that plaintive cited where there is some understanding of c enter there are far more clear facts of internal document showing differences here there's not a witness not a document not any internal anything that says that a spirit and didn't one hundred percent believe in good faith what it was saying in august another words they gave an update which is the purpose of the forward looking statement safe harbor congress's intent was to encourage companies to make these statements they gave an update because this is what they believed they were hearing but they were clear that they were not giving f d a is definitive position and that's where the warning does matter your honor because the warning was we don't want to get out in front of f d a we have no interest in getting out in front of f d a and council mentioned they didn't complain about the minutes once the minutes came and seemed inconsistent with what f d a had said virtually at the meeting well a spirit has no interest in criticising the f d a and had it challenge the minutes there's nothing stopping f d a from changing it position and requiring a cardiovascular outcomes trial and the next day another words the history here does matter as it didn't kuya include biomimetic knew that other drugs had obtained approval on the modified intent to treat population here counsel said of spirit and didn't rely on that history we did when we're saying remains a surrogate endpoint that's exactly what that refers to which is for thirty years and they will put it down right and they absolutely could have your honor and what they did here is to go further and say what as they said what we think we're hearing f d a is position is as to whether in the future it will require the cvo t to be completed and your honor what's important about c enter is it has to be ascertained act the time the statements were made and plaintiffs here don't say  area on how the meeting mr maylie band was incentivized to lie it makes no sense that he would not say what a spirit honestly believed in august at the time he was promising we will update you once we receive the minutes and thirty days knowing they would update in thirty days that is a fraud that makes no sense your honor and this comes back to the tell abs balancing that the court must do the inference of non fraud is far more compelling in here what a spirit on did was trying good faith to get what it believed was important information out in august when you're right they didn't have to they could have waited thirty days conservatively for the minutes to confirm what they think they heard f d a has position we have touched as appendix a to our brief the june right before the august meeting that f d a had a panel that did a similar thing narrower set of people who can't get their cholesterol down with existing statens so it just happened in june thirty years of history of f d a approving cholesterol drugs that only claim by the way to lower cholesterol they are not claiming heart health the reason mr maylie been knew that this was what he believed it was utterly consistent with what f d a had done for thirty years and importantly the reaction count in the release in the conference call in the analyst conference call and what they said was in this high on met medical need f d a can look at the risk benefit ratio of the drug and say these patients aren't being helped by existing drugs and therefore we think they will continue in the future to use l d l cholesterol lowering as a surrogate m point and so getting back to see enter at the top time mr miliband made these statements plaintiffs talk a lot about the inconsistency but they don't allege a single fact that lets this court take a shawl inference it's a strong inference of mr miliband state of mind so his state of mind is we have thirty years of precedent where f d a has done this june they just did it again for amgen drug patha in this high unmet medical need population and we think this is what we're hearing but we're hotshot ing you that the minutes may differ and getting to your honor question there was an interesting question from one of the analysts in the august phone call it's towards the end of the end of a call and the analyst says you keep referring to f d a as minutes might there be surprises there and then there are different things and say the company's notes and mr miliband says that's exactly why i keep saying we have to wait for the minutes i know your honor would be shocked that after thirty days a federal agency may come out with an official position in writing that is more declarative in writing than people's understanding walking away from a verbal meeting that's just human nature there's not a single fact allege that they don't even allege mr miliband was at the meeting the amended complaint paragraph twenty six says representatives in plano spend a lot of time in their brief assuming he attended the meeting but it's not actually alleged so there is zero allegations getting at his state of mind short of he has state of mind is the only one that matters here he's the only speaker and they allege zero facts that say he didn't honestly believe what he was saying in august there are many quotes in kuya but the important ones are that merely looking backwards and saying that in consistencies do not mean that they lied earlier there the federal mogul case i believe says honest optimism while it may turn out to be negligence that is a lesser form of intent and he had to plaintiffs have to plead particularized facts that show what mr miliband disregarded the reason i was emphasizing they don't allege he was at the meeting is it shows they have zero allegations as to his state of mind thank you very much council says that the statements are not definitive they're merely honest optimism but all these facts are definitive factual statements they don't bear any sort of ambiguity at all mr mailed and said we know that they will not require a completed c v cvo t he said f d a confirmed those are not speculations on his part interpretations of history those are definitive factual statements that he made which are certainly not honest optimism i note that in their brief and again today there's really no discussion at all from the defendants of the p r diamonds case and the rule that this court elucidated in that case which says that in a situation just like this where you have highest executive and the most important facts to the company they you can presume that the can the executive knows but you don't have to just presume if you look at his language during his statements he repeatedly talks about his own personal knowledge about the meeting you know the information we learned we learned last week that's at thirty one the information we digested the meeting last week and that's also paragraph thirty one the thing that we had learned that's in paragraph thirty aware of this information and i also point out that the inference that we're asking this court to draw is that what was said in the minutes is what was said in early august that is a reasonable inference to draw and much more appropriate i think than the defendant's proposed inference which is that while they might have like switched everything around and pulled the rug under out from a spirit even though spring never said that it's also important to keep in mind that the f d a guidance itself not only do they say that these minutes are the official record but they also set out a summary process by which the person the applicant needs to lead the summary between them and the f d a on the important points so there's no confusion well mr malan came out in august seventeen and said these are the important points so the inference there is that those were the points that they summarize and so therefore he knew what the true facts were regarding that and then lastly your honour's recklessness is enough to definitive