except it the price it would not have otherwise agreed to pay the principle question before the court is whether that allegation is plausible based on the well facts of the complaint then based on three sets of allegations it clearly is the st is that i b m was trying to induce the i r s to sign a contract by floods when i b m menu factored the false compliance penalties it the agency signed a new contract and there's a clear relationship between the lies i told and the deal the i r s the i r s over paid by about eighty seven million dollars which is close to the amount that i b m falsely said was and the it's in the new contract i b m billed for exactly two thousand three hundred and fifty three of that license in the st year and then twenty five dollars for the subsequent year i b m s misrepresentations are certainly at least one plausible explanation haitians are going to be on that page and so if you look at the top you'll see the citations to the ultimate allegation of causation and then if you look at those book once you'll see the we promise to waive the faith of penalties and it says that cause the i r s to enter into the license when it otherwise would not and you know when you look at how closely tied the lies are to the ultimate deal you would normally i but there is more and this is again referring to the things this is my rd he said effects and this is the stuff in the bullets on page five of the reply brief we have observations that support the inference of causation so for example i b m employee compliance charges well they don't call them false that this into compliance charges drove a large part of the deal so they have internally booked this as something that's attributable to the penalties that they were asserting and so you know that they play was aware that the i r s was concerned i think you said that the key person was concerned and in order to bring in the key person you're folding and paragraph is a five i can't remember the exact paragraph and so you're melding those two paragraphs the other side can of course come up with their evidence about why this didn't matter to the i r s and we'll talk about that down the line after discovery but in terms of evaluating the sufficiency of the allegations it's hard to imagine allegations that are more clear that might be innocent ideas conduct was really culpable everything that even they're not contesting the sufficiency of those things we say they did wrong are wrong you shouldn't do those things and so i think factor is that just because the court started your with but for causation are can we consider that abandoned at this point well i don't consider anything abandoned within our grief you know we we think w question so if let's suppose that but for causation is the right standard then if if there is but for if but for causation is a necessary ingredient of a claim what is materiality ad because what fo causation means the decision wouldn't have been made but for the consideration at issue materiality says was the consideration at issue significant if it is the decision would have been made but for the did this consideration an issue then how could not be significant i agree if we win causation on the four standard i think we're in material but i guess i think you would agree because that helps you but then but the way you presented arguments in a brief it seemed like what you  saying is there's a materiality requirement but there's not a causation requirement and i'll most wonder whether that seems backwards because if there is a causation requirement then arguably there need not be it's unclear w case based on the violation of any regulation or any requirement that might be relevant and it would be expansive what the supreme court said the way we're going to soar which regulations and violations matter d from which one materiality requirement because the question is whether the claim is false there's no causation that attaches to that but it still has to be material because you wouldn't want to give a fact to something that's false but it's trivial but in a fraudulent a newsman case the very notion of fog on a newsman requires a newsman which means at least i know you disagree with this but at least arguably requires causation and then once you have causation querrey whether materiality that is not in the causation in an inducement case i don't think it does i think that once you have causation you basically have materiality plus i read materiality to mean potential causation maybe nubs you're saying that your contention about plausibility it comes down to or at least entails the plausibility that that the government contracting parties were intimidated by the prospect that that they might be sued and agreed to a contract that they would not otherwise have agreed to but for the threat of being litigated that there was i believe it was also true that they must not of looked at information that was in some column of a spread sheet that was not emphasized to them and just went along with us because they were personally these two or three individuals were scared i'm not completely sure that i understand the question and our allegations certainly encompass some of those facts that you've said what i would say is when you ask what we have to show as a matter of law i think what we have to ship is that the s behaved the way it did because of the defendant's conduct that is had the defendants not lied about these penalties and not threaten just to not you know offered to waive them if they accepted a new s i think the iris signed a deal and that conduct is fraudulent i think we're good and so it may be as i said the subject of motivations you know it may be that they were scared we got an allegation to that effect but even if it shows that they were worried about litigation only but they thought they might win and you know we think that's still enough right so i just want to make sure that i'm clear about what i mean would be a portraying a government contracting process that is so sloppy or capricious that a couple of people being worried about being scared cause as the government enter into a quarter of a one billion dollars arrangement  i do think that there's there's an argument of the iris was not terribly sophisticated in this contacting process and if you know notice we said in our reply brief and this is mentioned in the complaint as well there was an investigation congress had hearings about the i r s is i t contracting process specifically that found it to be vulnerable to fraud but i don't want to i'm going to blame the government here what i'm saying is that the government's contracting folks generally do not assume that their contractors are going to just lights when they tend to take statements that are made by contractors at something close to face value and that's in part because there are lots of protections including the false  protect the government when the contractors do lie and so while i think it's almost always the case and every government contracting for a case that had the government been more vigilant it might have been able to find something that would have allowed it to escape the bad deal i don't think that that's how our society and congress and the false claims act look at these issues at all and i'm not trying to insinuate that the government was was bad here but i'm trying anyone else does so those are your legs of the supervisor had the sole authority to sign off on the deal i don't know if that allegation is in the complaint i believe that that is a true fact but i don't this allegation specifically in the complaint we say that jim mcgreevey was the head of software acquisitions and was in charge of this deal i don't know i believe he may have had to consult with the actual chief information officer but i don't think that's in the complaint no wo do have some concerns with the path of the court took to get to that conclusion and such the extent that the court is going to you know reaffirm the continuing validity of the fraudulent inducement theory i think that it should we would just ask the court not introduce any ambiguity or i really what was required is exactly what mr things discussed with the court in his opening argument which is that had the fraudulent statements not been made had the trumped up audit findings not been presented and the false promise to waive the nine million dollars penalty not been made the government wouldn't have entered into this contract that's pleaded explicitly in several places in the complaint and then there are several allegations mr singh highlighted that make that allegation plausible back of the ira wasn't thinking about renewing the contract to begin with that because even in your brief when you explained why materiality is adequately plaid you just basically rely on what was explained with respect about four causation and i guess conceptually it seems like but for causation means that the consideration at issue isn't it i to the decision materiality asks was is the consideration at issue significant to the decision and i get that there's a different temporal reference point that materiality comes ex ante and but for causation comes x post and suppose i maybe somebody could conjure up  hypothetical that makes use of that temporal distinction but as a real world matter in the mind run of cases does the government think the materiality adds something about for causation in the fraudulent inducement context you know you causation and complaint certainly satisfies materiality and there's one other point that i would make with respect to that materiality point is that when doing that assessment in addition to failing to conduct that holistic analysis the court did make reference to the government's declaration decision in this case not  and we think this court should hold that that is simply not relevant at the materiality because there are many reasons non marriage why is that the government might not participate and certainly doesn't give any information about whether the government thinks that a statement of material or not that was it not entitled even to which is the patient and so it would be very odd if the court could take into account the government's definition decision as a reflection of materiality and make it even incrementally more difficult for later to bring those through and then secondly of course it simply ignores the reality of the government system which is we simply cannot participate in every single false claims act and all the other cases that we litigate in this country and so the fact that the government doesn't participate doesn't necessarily mean that it's a comment on the merits could be a resource to fix problems and it certainly doesn't mean that even if it's a very related think is significant because as we know after twamley escobar the pleading stage has some peace and there are a few basic factors that i think are relevant here one of them draws on judge rao's st question which is that it's not enough at the pleading stage to allege conclusions you have to alleged facts backing up those conclusions and you have to allege those facts as being more than consistent with the prospect of liability they actually have to point towards  liability in response to one of the questions judge ginsberg raised this court under it all is also instructed to take it's common sense and experience into account when it's reviewing a motion to dismiss and the allegations in a complaint and then of course there's a rd saying  don't think has come up at all yet in the argument which is that a fraud plaintiff including a false claims act plaintiff used to satisfy will nine b so that's the additional test that that these allegations need to be put through so and on your question about causation and materiality because i do think as a conceptual natter they tend to collapse into each other in a case like this but i want to want to offer one view on how materiality that finds that representation to the government could not have been material when the government continued to pay on the contract so i think while while conceptually when you're talking about the point at which you reviewing this your chief judge from boston you made the point about the temporal difference that temp the difference kind of gets in raced with the patch passage of time but i think we're materiality that where that analysis is helpful is in this court testing you know kind of the conclusion against the facts so you know what what this court said and ride it is since we have the evidence and they will to us we might as well make use of that essentially and what we know in this case and what the district court held i want to be very clear about this this was not some kind of singular non holistic materiality overview this was a multi step commentary which it then capped off with a reference to declamation and i want to be clear on that as well get to that  complaint alleged and most of those were paid after the case was filed and you can cross check that against a joint appendix three hundred and twenty dollars three hundred and thirty six which sent out the schedule for payments wow they government was considering whether to bring a case it was and i think that's a that's a point that mr samee now makes in his briefing is that this was just these were just allegations rather than actual indeed we may conclude it's fine we just don't know so you have no basis for just stopping payment in the middle of the contract i don't that's st of all that's certainly not an argument that that mistress of me has offered here but nd more to the point no contract and i'm going to have a strong other i'm saying that it would be for it's a pick it's a peculiar point for you to be making it's not persuasive because it really would require the i r s to have stopped paying out a contract that the justice department ha not concluded was was fraudulent under the regulations that govern this contract judge ginsburg and you can find this a joint appendix three hundred and twenty and the references to the regulations there the i r s can terminate this contract for convenience convenient for the i r s to stop paying and lose the benefit of the services in the contract oh no and i say great aside the point but i hear your point but i don't think that's what terminating for convenience means in government think they and i r s could conclude there may well be something nefarious going on here we haven't completely figured it out yet but it would actually be inconvenient for us to lose the services right now in the middle of taxis and or i can resentment is occurring but it would be it would be inconvenient for hypothetical that the i r s could have made it convenient to them simply by contracting listen to the else and this after all was not that that's this is not the kind of line of thought that the court saw it was significant in any of the other cases that i've mentioned to particular those involved actual allegations of bad drugs and bad devices on the market and i don't think that it would have been the case that an agency would have thought i need to wait and see how this d o j investigation shakes out before i take the spandrel market the i r s had the independent a celebrity to end this contract if it chose to and it didn't is there any reason to think you know the record that it was dissatisfied with a contract no there's there's no evidence in the record to think that it was dissatisfied with the contract that's actually one of our points is that it continued to renew the option years twenty four thousand three hundred and i think it's irrelevant either way frankly i mean the idea that somehow they're attached significance to what the s did or didn't do when the matter is up in the air strikes me as mistaken on both sides well i i take your point i think i would say that among the other notes that the district  allegation it's pointing at a particular individual in a particular context the exchange they had with the supervisor and it specifically relates the to the deloitte findings and it says that shawn was aware that the i r s was very concerned and that just seems like that's a fact that goes to materiality very concerned seems materials that seems like a reasonable facsimile for material and it's a specific individual who knew who was aware that the relevant s was very concerned and scared now what that has morphed into by the time of the reply brief is because he was at the meeting mr sherman was aware of that mr mcgrane was concerned and scared that is a bri and so in some sort of abstract sense it could have been i don't know how long shot marco as i you were there for fifty years it could have been at some point the course of his and pointed but what he was concerned is care about was the fault the lawyer findings that's what the allegations are so it particularly particularly  relates to the very falsity that's the gravel man of the complaint which is temporarily confined right it's a finite point in time it's the particular diploid findings and it has to do with the very meaning i'm not even sure that this allegation is necessary but in terms of whether it's sufficient it seems like it's pretty detailed about a particular employee having a particular concern about a particular falsity i think it is i think it is certainly not sufficient it's necessary  would not have done this but four x so what he needs is the saying that shows that men can concern and simply saying that an employee was aware during the course of his employment that the i r s was scared of the audit st of all that's far too general and nd of all to make the point the district court did being concerned about the audits doesn't take that last necessary step to show that the i r s actually accepted the results of the audit and we actually know from multiple details in the complaint that the i r s had repeatedly rejected the audit before a keen to this december one thousand so i think you have to blink away a lot of other signals in the complaint that mr mcgrane the don't you have to also point the way and point in the other direction what i b m was doing because i mean the entire point here of i b m scheme was predicated on the idea that the ninety one million dollars would matter and it seems like you have to sort of blank that away times the allegations in a point i'm not suggesting what's going to be proved at the end of the day obviously or even whether it gets passed summary judgment of course but doesn't terms of getting the complaint the entire object of i b m s scheme was predicated on the idea that this was going to it's just that i b m would have had to have been pretty darn wrong about something that it understands pretty darn well well i think i think the allegations in the complete show that i am was pretty darn wrong about its on it when it was very determined to put one over on the i r s what's missing from the complaint is any suggestion that the i r s the person responsible for signing that who as mr singh conceded we don't even know is mr mcgrane that that person accepted the audit results and that that led to the signing of the contract that is the missing they get plank in the bridge that they're missing for conservation purposes and the reason that matters is because it particularly in a fraud case where we are asking all fraud plaintiffs including this roommate or to plead with specificity simply saying there was a guy who was in a meeting who worked and during the course of his employment he got the impression the i r s was scared of this audit that can't possibly be enough to satisfy rule ninety i don't think it satisfies rule eight but when you add that additional layer of rigor if that is the paragraph that we're talking about and that is completely  mistake and especially so at the pleading stage missteps and mentioned a number of cases one of the ones she said had only allegations the mcbride case was of course a summary judgment we talk about the case in depth in our brief and the in the complaint itself about what the government knew about the allegations and that just isn't here in this record so again as a matter of adjudicating the pleading stage i think it is you have to joy strong pro defense inference about materiality which is just something you're not allowed to do all the reasonable inferences go our way at this stage of the proceedings the nd point i would talk about is this question about the christian allegations and just what's necessary  and i think you're right that you have to blink the way that i b m is trying to get away with this and you also have to win the way that really the proof is in the putting the deal has the fraudulent charges and the thing that i b m was trying to get the i r s to do government contracting you're on i think that if we are even if you so two things st i don't have to eliminate every other possibilities i just have to show that we have one even if you're right the explanation you're positing of negligence isn't a defense for i b m you don't get to defraud the government because you think they're not going to catch you you know that's not how this works unless the any way for that to be any kind of obvious alternative explanation to the supreme court's language and promptly that would eliminate liability in this case the most the court has any other questions i'm grateful for your time or thank you counsel thank you to all counsel will take this case under submission