i like to reserve three minutes of my time for a bottle in the securities class action case there are two reasons why we can turn the district court here below first the court erred by denying a leave  on the discovery of new information but don't we have a rule of mandate problem here we don't believe so your honor and i'll address that issue second we also believe the that was not considered by the ninth circuit so that information which wrongly indicates dependents i enter shows out the ten b claim should be allowed to leave to amend to pursue the claim should be allowed and there is numerous case law that we cite in our brave got shows that the mandate only applies to issues of the ninth circuit dealt with so when there's new information that's presented like in this case we've got tons of information from the companies auditor showing that defendants engaged in science or by deliberate by being deliberately reckless with respect to the company's accounting that information is grounds for leave to amend and so the mandate did not explicitly deal with those issues because the mandate only dealt with the issues before the court so if you look at the information that we have left and there's had information not show that the companies in their segment revenues between service and he told the groups with the second quarter of two thousand and six were incorrect but they were basically saying that they were relying on the  s relationship with the texas commission environmental quality board they were along on this information and saying that we have a good relationship with the commission therefore we don't have to verify the information with respect to the company's martin and that information shows that the company was being reckless because they were relying on this relationship with the commission and failing to accurately present information to investors so that information is deliberate recklessness it's in the imminent complaint and the company the court below and the finance don't even address us information so eight so petri actually supports your argument because in that case the information came after the fact after the complaint was filed and petri the court held that that information was relevant and supported the american play that's what we allege shared the rule of mandate does not apply when you have a situation like this where you have information that comes in afterwards that supports claims that were previously  federal rules of civil procedure under those rules you have someone of authority that we cite in our opening memorandum showing that when you have a situation like this where new information is disclosed the court should address whether or not those previously dismissed claims should be revived we have case law from the ninth circuit on that the w p case we also have other authority that shows that when you have new information being presented that situation here where you have information that supports claims that were previously dismissed and whether it was with prejudice or without prejudice the fact that that information supports the claims that were alleging case where the complaint was dismissed with prejudice and newly discovered evidence was allowed after the complaint was dismissed well this is a situation where we had one claim dismissed on the ninth circuit but one claim was allowed to go forward so our case was proceeding based upon the such eleven play so that plame was still alive the case was not dismissed entirely so but do you have a case where a claim motion we brought the motion based on want between sixty b and fifty four period so all those are independent grounds for amendment those are issues up that this record failed to address your honor defendants don't even to address it in their brief so all of those reasons are basis for amendment in this case which the district court here now what's your six to be argument or sixty sixty right that's a problem for you no it doesn't want to because the company did not go to the after market to purchase additional shares so if you look at that sort of record one forty there were one one point four million shares hundred so the company did not have to go out and get additional shares always shares that came out of the registration statement were registered pursuant to the threat plan and plaintiff purchased those shares pursuant to the point i like  filed in two thousand and eight after southwest water announced a restatement there are two issues before the co court the motion for summary judgment on the section eleven claim and the motion for leave to amend because we've spent so much time in the illustrate that i have to decide whether there are exceptions to the mandate your honor the this court has as previously held that there are no exceptions that it's jurisdictional but when i get to the point that even if there exceptions they would know why here and in this case going back to the procedural history of this case it was initially filed asserting claims under section ten b of the securities exchange act of one nine hundred thirty four the companion secondary liability claim under section twenty eight the claims under section eleven under the securities act of one nine hundred thirty three and the companion secondary liability claim under section fifteen after multiple rounds of pleading the district court then dismissed the entire case with prejudice and without leave to him then the plaintiffs appealed arguing that the court district court erred on both sets of claims in in reality its the section ten b claim in the section eleven claim the the court of appeals determined that the court district court had erred in dismissing the section eleven claim on the issue of c n n and found three sets of facts alleged in the complaint at that time gave rise to a negative inference of see enter that it was more likely than not that the defendants acted negligently and said for three independent reasons when you consider the totality of the complain applying the us supreme court's decision intel adds that there was a negative c enter inference in other defendant to assert new arguments at that time the court of the plaintiff also relies on when versus united states and i would submit when vs united states actually supports the defendants or even here that the rule of mandate bars further any further litigation in the when case that case was really two cases rolled up into one one of them in an evolved an individual by the name of birch rand and then you have when  who's the namesake of the case with respect to birch rand the court of appeals directed the district court to enter summary judgment for the government with respect to when the court of appeals did not direct the interest summary judgment instead told the district court that mr when could assert all other challenges to the government action in question in that case this case is like with respect to the section ten  portion of when where the the claim was extinguished the dismissal with prejudice was affirmed and then sent the when case back to the district court which is akin to the section eleven when so with sent back to the district court would also distinguishes this case from the other cases cited by plaintiffs is that it is not as if the plaintiff here is raising citing a different claim they are the identical claims that were litigated previously nor is the plain of saying that there is some change of law or some manifests unjust result that may require someone remains behind prison when they probably shouldn't be none of those exceptions and rules sixty b wouldn't apply another response is rule sixty b there arguing that there's newly discovered evidence here given the procedural posture of this case and the overlay of the private securities litigation hundred five wearing congress made a policy decision that securities complaint should rise and fall on the knowledge of the plaintiffs without the benefit of discovery and in the procedural context when this case first came up to the court of appeals we weren't talking about evidence evidence had nothing to do with the case it had everything to do with whether or not the allegations in the complaint pled with a high degree of specificity that the defendants acted with the intent to fraud so coming back to the court saying that they've got newly discovered evidence that suddenly may allow them to plead a clane doesn't seem to make sense because evidence never came into play into play in this case because we never reached that stage on the the final argument under rule sixty b n while counsel said the issue was never addressed by the court below on the motion for leave to amend if the court actually looked at the issue in its order denying the motion for leave to amend the court's that the district court here said that the rule the mandate does apply and then it went on to address each of the plaintiff's arguments do you think let me ask you this here i asked him what evidence he has of banter now do you think what he's offering is that adequate it isn't science or it is not your honor in fact as as i was getting to this the district court on the motion for also considered the proposed amended complaint and what the district court did is it looked at the procedural history of the case looked at what the prior district court judge judge and when did in the case in dismissing it and it looked with a court did in affirming the dismissal and as i mentioned earlier your honor that in the in on the appeal the court of appeals found three independent facts that each one of which raised and negative inference of cmdr showing that the the defendant's acted negligently and the district court looked at the proposed amendment on this motion to leave for leave to amend and and noted that even if they were allowed amend here it only addressed one of the two sets of facts that this court found raised a negative inference of cmdr so even if you were to consider the amendments the district court did opinion the magic words it under rule fifteen that the amendment would be futile the analysis analysis of the district court shows that the amendment would be futile the one of the most  that its internal controls are inadequate that can't be because it disclosed them and the proposed amendment doesn't address that fact the proposal memon also doesn't address the fact that the the anonymous sources cited in the complaint confirm that southwest water just like it represented to the market was attempting to address the inadequacies of its internal controls so even under if you were to say will sixty be allows the court to consider the to rule fifteen and even if the court v a d a formal rule fifteen analysis or use the magic words of rule for fifteen in in analyzing the motion for leave to amend the court we know what the court would do he would find that the amendment is futile and not allowed and we would be back here again presumably on on there the challenge of that specific decision so if you want to speak to the section eleven issue yes under section eleven this is a unique claim and it is a very powerful claim for those who can assert it allows under basically the same set of facts which we can and we see it play out here even if we're there is a false or misleading or allegedly false or misleading lead registration statement you can either bring a section ten b claim or you can bring a section eleven claim in a section eleven claim the because section eleven is so powerful you'd see it more often in securities cases and you don't because the weight this is the be specific mr sams the shares in the plan were originally registered and these plaintiffs right to trace their ownership to those years what's wrong with mr sams mrs mrs several important steps and this happens in connection with any case alleging a section eleven claim we're a company has issued more than one registration statement here southwest water had issued sixteen registration statements and what happens when and  this is shown in the record through the declarations that when southwest water or any other public company registers securities those securities don't go directly to the investors the securities the legal title of those securities passes to cd unco the nominee of the depository trust corporation and it is the owner the legal owner of all of the shares of stock so when these registration statements in question registered securities mr samms misses the step that the shares don't go from the company to the plaintiffs it goes from the company to the transfer agent which cancels the old registration statement which may for example say there were twenty four point five million shares a publicly traded registered stock vailable the company issues a new shares give it showing twenty five million shares and then it just allocates beneficial interest not the actual title to the shares to shareholders who purchase from the drip plan and it's just like when you take a dollar in your pocket you go to the bank and does deposit in the bank and then later make it withdraw from the bank even though your bank statement went up by a dollar there's no way to tell that when you pull out another dollar or more accurately or appropriately in this this instance make it  letter of electronics fines transfer of one dollar there's no way you can tell that that dollar that sent to the recipient is the same dollar that you put in and that's what's missing here and that's why no case has ever found a a an exception for dividend reinvestment plans because it is the the market the system doesn't work that way and courts have acknowledged that where companies have issued more than one registration statement it's impossible to trace and there's nothing in the statute that suggests a given reimbursement plan exception to the trace requirement nothing in the case law and there is no policy reason why there should be an exception here  stock into the jumbo share certificate held by cd and co are managed by the transfer agent which makes tracing impossible thank you ron thank you also this was sam's use a reserve time yes your honour's first with respect to whether or not there is an exception to the rule the mandate council stayed up that there are no exceptions that he cited at the thrasher case but in thrasher that holding was in a concurring opinion  wasn't the majority's opinion and that this court and paul the case that the district court and have been a spell to address the court said absently there are new information or intervening case law that just  required to follow the principles and now it's in our prior disposition that's why i have sixty one f third and nine seventy five so and paul this court especially acknowledge that absent new information the court was required of all the mandate which shows that if there is new information as there is here the court can depart from the rule of mandate and that's why our where the district court erred here second all alluded to the fact that the new information that was allege only a draft some of the categories i'm a promotion regarding scienter that was specified within the rule of mandate whil do that just looking at whether or not certain categories of science or or alleged violates this court's decision and south fared also with respect to one of the  was saying that the texas regulators would not challenge the company's margins with respect to intercompany construction progress projects because the company had this relationship with the regulators