complaint on statute of limitations grounds by failing to apply the supreme court's decision in merck to plaintiff's claims of the securities and instead of this record applied an inquiry notice standard which we submit is no longer val facts giving rise to inquiry notice may occur before the discovery of the claim itself to two cases that say that inquiry knows applies now if we adopt your view those we would have to overrule those cases that were your requests well i think in light of mark inquiry no this is no longer the standard so i think yes to the extent that there are cases prior to mark that apply an inquiry notice standard in the context of a securit well i think when you when you look at the civil courts that have applied mark i think that the seminal cases the city of pontiac case in the second circuit and that sort of set the standard for what constitutes discovery in the context of of a secure regarding indy mac and their practices but really you knew you knew that the certificates it you purchased were pursued wished you were it is originated by countrywide in india and you knew  countrywide in indy mac mortgages were really highly question well i think and i agree and i concede both those points but simply by the fact that there's some information in the market regarding countrywide ending that there are bad practices and the fact that the offering documents simply identify countrywide in the back as the as the originators of the bulk of the lowest it doesn't follow and getting to your question judge fisher i think it's not enough there are because there's nothing in the market that suggests that the specific investments that we made in these certificates was impacted by anything that was going on a countrywide in any mac now keep in mind the news about country barden indy mac was swirling around even before the offering in this case took place so therefore and worse i think we can all agree that we're certainly on notice of facts that occurred before we actually made the are stepping into the place of what would be a reasonably diligent person but let's look at the information that was out there there was certainly bad information about countrywide in the mac in the marketplace there was certainly an indication that these loans were  in fact originated by them but there was no specific facts in the market linking those bad practices to this specific investment and without that information how could we plausibly plead a cause of action for  constitutes our ability to state a claim and let me just to the moody's downgraded was a significant event from the point of the offering to the point of the downgrade those certificates were rated as high as it can be nothing changed so while all this news a swirling around in the market place were guarding countrywide any mac nothing changed with regard to these certificates they were they retained the highest rating they could and w ratings occurred when the ratings downgrade occurred it wasn't like the downgrade shifted the analysis from these are excellent and other good they went from excellent to junk status so it's our claim that at that point investors had the link that they could say ok there is now a problem with our specific investment sufficient that we can state across a rather small moody's didn't discover this fact overnight and there was there was something that led moody's to their discovery i would suggest perhaps one of the things that led there's coverage was the case forget the fact that your firm was involved but  your clients were involved with the los angeles county in september two thousand and eight isn't that isn't the fact that the operating engine years report of that class action which they alleged that there were problems with countrywide in india countrywide underwriting then that would not have led let a reasonable investor to have looked further to make some determination as to whether or not these same kinds of mortgages for the kinds of mortgages backing the certificates i'd say no it doesn't they certainly it would lead a reasonable investigate investor to investigate further but they still wouldn't come up with the answer that do we have sufficient information to allege a cause of action yesterday when he answered did you specifically need i think we needed at the specific information that  practice is the bad practice is a countrywide in the knack to these specific invests and there was nothing in the market at any time until the ratings downgrade that indicated that there was a problem the significance of those lawsuits is very limited and i agree my firm was involved in a lot of the countrywide litigation but what that means is those those cases were based on false statements made by countrywide with respect to countrywide securities so it would follow that in a and in that circumstance that plaintiff would be on notice of the allegations with respect to countrywide was really anywhere in the documentation backing up your certificates an indication of how many was information that was discussed in the market but not not know what there was instead was information about loans that were passed but not enough information to put a reasonable investor on notice that they actually had a cause of action there was so you  point of what would a reasonable investor know about the client now just because my client was involved again in litigation involving countrywide that's only relevant to what happened with respect to countrywide  you knew that a good percentage of those mortgages that they had originated more in jeopardy or suspect i think i think what i would say is we knew generally there was information in the market that indicated that think this is the trigger point for the session i think what we're saying is the trigger point is we had that at least have and this is what i was saying about the city pontiac case which every court following more has applied is that we had that lease have sufficient facts to show discovery and what discovery is according the city of pontiac did you have a claim sufficient facts to support the fact that we have a claim and what we're talking about here is actually we're in the reversed position of what the p s l or a actually the private actually was under the courts there are there'd be an inundation of lawsuits filed before the facts regarding the specific investment because you have everyone working well there's all this information about countries that we better get a information the inquiry notice just shifts the burden to what are reasonable invest a regional be diligent investigation would show what we're saying is there was and still no information the market that linked countrywide in ind to these specific investments so while they may have a better argument under or a stronger argument i think we're still in the same place even if you applied in credo to standard but it's our position just that's something you're arguing your brief that in dismissing first point the district court applied narrowly standard to deal with the second complaint here what relief can you get what would you want us to do with i guess if you are correct and why do i say that if you look at the allegations made in the original complaint and more particularly the allegations that were made with regard to information and the market will publicize information and get that all occurred before february two thousand and nine it's critical in this case and i say it's critical in this case because that information demonstrates that the appellant's in this case were not could have discovered the information that was necessary to bring a claim in this case number one and number two even if you apply the second circuit city of pontiac case which as the parent has indicated out we believe that that argument is flawed for for several reasons and the reason is if you go to the appellants claim in this case that claim is the principal reason that  claim is that countrywide and indy mac systematically disregarded all of their underwriting guidelines didn't the wage that there were there was one guideline one particular guideline that was not being applied when a particular period of time is not being applied there are all allocation was sweeping it was all encompassing with they argued was that these two originators of loans completely disregarded their underwriting guidelines that essentially what the allegation say is that all of the underwriting guidelines repeal this reporting that same allegation that identical allegation was being made in cases well before february two thousand and one we had hatched which you're talking about there i think is is something akin to storm warnings and information which i i understand the supreme court to put into that at the difference between the two statute of limitations in this case the statue of limitations perception can be says you have to have a certain amount of information to discover differences the concerns that the supreme court had in the merck case are not at issue in a section eleven case our court history to them to the same has your court has recognized as a critical difference in those statutes it is said so in its case law saying that the difference between those statutes where section can be requires scienter require which means that under a ninety pleading standard a plaintiff would have to be able to find so you enter in a case to bring a claim which is what's required under under these securities exchange act statu that is not required for section eleven there i will ask one further point there is language in the supreme court case that inquiry notice is something that occurs before discovery and that's what the statute requires discovered what is your response is discoverable first of all we say that discovery is not required in this case because merck should not apply to a securit act case but more particularly what we what we argue in this case and this is exactly the holding of course things are back to improve search you know because a it this goes to a question you asked earlier  what's the difference between the standard for a reasonably diligent investor to discover an increase notice increase notice provides a search provides that there should be a point in time where you have a certain amount of information that  gates you to investigate let's talk about discovery the question is discovery of what discovery in the context of a section eleven claim requires that not that you discover you have a cause of action you have to discover the untrue statement or mission what appellant say in this case is that the untrue statement what was missing from the offering materials was a disclosure saying that these underwriting guidelines that we are calling mac have been completely under a disregarding their underwriting guidelines and our point about the allegations in the original complaint is that same missing information what was missing from the complain that makes a force in this leading was alleged in numerous prior complaints including complaints brought by this parties a plaintiff in this case before february two thousand  logs number one they securitized them themselves and sold them to investors number two they sold them to the market to other parties who in turn securitize those lot but the same underwriting standards or the lack of underwriting standards that we're painting will be use those loans cause problems for the securities that the mortgage backed securities that countrywide was issuing and in this case was they upheld those claims because they were saying that countrywide was totally disregarding its underwriting standards why did you shoot itself securities to the public that was what was missing from that information and that is why all those ea sitting through the m t l process over all of the countrywide litigation the decisions that have been issued by her that indicate that parties were able to state claims under section eleven by alleging that countrywide countrywide completely abandoned its underwriting guidelines put a plate of sign notice through throughout the mortgage place that if they had an allegation like that they were on notice that that claim has been brought number difference in this case as to which standard applies because we say that the point that you discover the full statement in this case was the same point that you were at ukraine notice that there was there was a full state no you're right and why would that not be the case because this is a section eleven case whatever u b s knew or didn't know is not relevant all the appellants had to do was find a false or misleading omis  it was exactly what the complaint alleges was was that the loans underlying your certificates were were complied with certain underwriting standards that were used by the originators that's why we're going back to countrywide in indy mac they're saying that what countrywide and indy mac did was they applied certain underwriting standards but it is it was that they applied correct inappropriate improper procedures  page pages for ninety eight through five eleven of the appendix what we do in this trial and we provided this to the district court is it takes allegations made in prior complaints and it compares them on a word by word basis to the allegations in the complaint before the scramble sounds like a crude notice in other words because it happened over there we were on increasing notice it should have pursued it further and then we should have brought claim against u b s and at a point earlier in turn no i suggest that when one reads the strike you've discovered your client does that chart tell you that the that the mortgage that the certificate that i courts have found that through so one didn't need to know detailed granular information about their certificates when the this is when the offering materials in this case said ninety one percent countrywide underwrote some good mortgages well the question is as an investor when you are told that when there are allegations being upheld by district courts and you have stated a claim under section eleven i'm denying the motion to dismiss when there are allegations that say countrywide and indy mac systematically disregarded their underwriting guidelines across the board and that's what this complaints that that's what this as long as you've brought cases that make that allegation you're on notice of the probability that the statement in you in york documents that say countrywide in indy mac are abiding by these we see underwriting standards pools of of these mortgages together that provided cash flows so they were there they had a specific bundles there was a tangible number of mortgages that were part of these pools yes ok so it's possible maybe not likely but possible that the mortgages it got into this pool that back these certificates were good mortgages it's if one were going through the when there have been a slew of that of lawsuits filed saying that countrywide in indy mac have completely disregarded their underwriting guidelines and history courts have said that type of allegation any reason to think that we have been injured we do not typically spend our days looking for evidence that we were lied to or flawed right that's the typical in our i mean i think we're talking about a pretty figure is not typically looking for evidence of certified and i respectfully submit that when the plaintiff in this case itself has filed lawsuits alleging that countrywide has completely disregarded and abandoned its underwriting guidelines and and let let's just the firm that is representing them on an appeal in this case said that at the time of their purchases of certificates plaintiff and other members of the class were without knowledge and could not have reasonably discovered these facts prior to late two thousand and eight late two thousand and eight before two thousand and one so that's this point of talking about allegations countrywide has systematically lookout but when information of the like that comes to the attention of the appellant in this case exists a plaintiff cannot sit by idly and do nothing we respectfully asked the that the court either been on notice of his claim or would have discovered its claim and that the claim would have been that the allegations in the materials were incorrect because it did not include and i think what counsel's ignoring is the statue on the patients for securities that claim which says discovery is the triggering event so when you go back and you take a look at those merck applied here with the supreme court interpreted discovery in the securities fraud claim the same terms should have the same meaning as to what discovery is in a security vacuum well except for them record didn't it distinguish and so these are two different statue concerning the untrue statement or omission that is the cause of action that's why city of pontiac applies here because all we need to do to show a section eleven claim is to allege an untrue statement omission so the standard from city a pontiac fits nicely into this paradigm because you talk about the sovereignty of an interest in or omission but that's not the portion of work we're talking about we're not talking about what facts need to be discovered we can see that there are have applied the standards identically to securities that claim before merck and there's no reason to apply them differently after my discovery means the same thing and when you look at the cases the majority of cases that  have addressed this issue within the context of these similar type of certificates the courts have actually gone through the analysis and said what does discovery mean have uniformly concluded that it means the same for both statutes so i think this is not valid anymore in light of what merck said but even more to the point is distinguishable and what the district court missed and what the tenants are missing is there were two parts of the benedictus the first part was an exhaustive review of the registration statement that case involved the unsuitability of an investment based on the fact that they said that the registration statement didn't talk about the fees and expenses for this specific invest the court looked at the registration statement said that information's right there of course you're on notice of that and then they said and oh by the way this general public only bolsters that fact that circumstance doesn't apply here sure we have the information some of them may not a small percentage may not have been but on a motion to dismiss where we're at a pleading standard i think it's at least raises a question of fact as to whether or not the standards met if i could just raise one more point shock when analysis that i'm we're asking that you apply today and found that our client's complaint was timely so i'm not sure what benefit they get from that the at the end of the day there was no information in the market prior to the downgrades that would have alerted a reasonable investor that these certificates were bad and the courts are held that the that the statutes are functionally i didn't ironical right correct then and that's the same argument we're making here that for the purposes of that is in the case and i'd like to read for you it says that the statute of limitations and for cases you tip it typically begin to run only when the injury is or reasonably could have been discovered that that phrase might make this case somewhat relevant or so the site is it's going belly versus a c c one thirty three a supreme court page twelve sixteen the site is page twelve twenty two with two thousand and three from you might want to respond to that with a short letter statement to see if whether that case is applicable to this