good morning and may it please the court i'm jordan f on behalf of the first solar defendants like to reserve three minutes of my time in the district court believe that there is an irreconcilable conflict in this circuit between two lines of cases on the issue of loss causation in private rule ten b five actions there is no conflict there is one line of cases and it has been  and to prove that an alleged misrepresentation was revealed to the market at the fraudulent practices themselves were revealed to the market the false statement was revealed so do you think that the so called material context and summary judgment was affirmed for the defendants materialization the risk was not raised by the plaintiffs below was not addressed by the district court below and the reason i started by saying would be inconsistent with a couple in one circuit market reacted to the purported impact of the alleged fraud rather than to the fraudulent acts themselves how do you reconcile this statement with the standard in an re i don't know how i say it two systems where we held that the l themselves were revealed what metzler said is that the reason the dow went forward is because the causal link involved revealing the falsity of the practices specifically citing the disclosure in debt out by the company defendant that there had been ten million dollars and unbilled receivables and that an analyst said the company had been manufacturing earnings this came up again in loose v immersion where the plane to said almost the exact same thing that that the court just posed in terms of question what about down what does this work under down the court said no it doesn't because dow crucial using the courts words crucially looked at the disclosure of the false practices as the key which was the disclosure in a case involving alleged accounting fraud of ten million dollars in unbil receivables oracle cites two sites today with c f site citing to the manufacturing earnings issue so the dow case which the district court followed said it was following the district court said that the ninth circuit's own view of the owl was wrong and once circuits that view of that was a wrong it's binding it's binding at least twice in loose and metzler and that is what it is binding on the district court so i am interested in what you did this is obviously a very important issue comes up with very large cases and is so confusing all these cases we're not in a position to take the case and make changes so your effort is i guess to harmonize so that you can get go on with your case i was impressed with with lloyd it strikes me that we're just trying that is a good argument that we're just trying to say the same thing but in different words and lloyd points out that they're all of very in a proximate cause that makes good sense to me proximate cause is something we deal with we understand it it seems to me that's essentially what you're trying to find in these cases and the wide variety of our cases could be just a way of swallowing proximate cause what's wrong with lloyd's approach to this that they're just a variant of proximate cause and they can be harmonized in that way there's there's nothing wrong with the  lloyd decision what the late decision does is it answers and open question from loose from footnote three in loose what lou said is that if a company announces an internal investigation of its own revenues and the stock falls that as a matter of pleading isn't enough isn't enough for a loss causation because it would just lead to speculation and even if the stock went down that's not enough and the court said in a footnote well if there's a later on a confirmatory disclosure of an inaccuracy then maybe that would be enough and what lloyd answers is that question lloyd says well we haven't s e c subpoena which wouldn't be enough by itself the stock fell twenty two percent multiple analysts said this as the subpoena looks like it has to do with these loan loss reserves that we're questioning and then within a month there was a corrective disclosure and the stock did not react to the corrective disclosure and one circuit said in those circumstances that reveals falsity now proximate cause is a pretty broad term and what the courts have said is variant a proximate cause and has repeatedly said in this context fraud on the market cases if the market doesn't know about something it's not incorporated into the price fraud on the market case is that it has to be a revelation of falsity not only as the court said that these holdings if they were if we had a just a variant of proximate cause if it is a variant and the way that's applied the test that's applied at the pleading stage and if the proof stage in the ninth circuit is as  in those four cases plainly well do you have a lation of false of the state with a lawyer for a second is lloyd sufficient to answer the question of judge campbell that he's put up in his forty nine pages can all those cases be developed under a banner of proximate cause the that's the overall variant of proximate cause is the ban is the overall ban or yeah but the test that's used is revelation of falsity and lloyd applied that and said that the there was a corrective disclosure that made the earlier statements untrue but he says because last causation is simply a variant of proximate cause yes answering a question that was left open in the loose case not saying well where where abandoning what lou said is the test i didn't see anything in here that said that's what we're there specifically answering announcement of an investigation coupled with a subsequent disclosure of corrective information is sufficient for proximate cause they say mean things with the last causation test but just labeling a proximate cause doesn't answer the question how is that applied in the ninth circuit and i agree that the court ruling was very detailed and very thorough and what the court said is  cases from this not sure good summary judgment would be granted in full well let me take you a little bit in the weeds and assume that we get past that we don't have to go on bonk on this even if we were to agree with you that the district applied the wrong last station standard and should have applied revelation of falsity tast why haven't the a pelleas proffer insufficient evidence showing market knowledge of the alleged fraud i e the concealment of the low power pate but we have it here why it why can't we can't we apply it here why haven't they proffered enough is what i'm asking you because what they prefer is evidence of impact that's what they proffer that exists a triable issue of material fact as to whether the alleged progeny practice caused their losses no no we're not your honor we're not conceding that at all and what the plaintiffs have done is they've said under revelation of falsity three of the corrective disclosure the alleged corrective disclosures the ones from two thousand and eleven they don't even argue that those would meet the test they don't even cite to that right let's say if we were to conclude then that the district court erred in discerning a conflict in the circuits case plaintiff's morning honors for us on behalf of the plaintiffs i want to start by correcting something that mr out said in the district court we did argue both the traditional standard in the ninth circuit and massive charges in business threatening reputational harm the first solar incurred were forseeable risks the evidence is also sufficient to create a genuine issue of material fact under the quote risk materialization theory we argue that on every every one of the decline  this case really boils down to the question of whether plaintiffs are required to prove lost causation simply by relying on defendant's own words or whether we can use defendant's words along with additional evidence to establish proximate cause defendants are asking the court to do in this case is disregard all evidence of proximate cause ation unless that is a contemporaneous disclosure at the time of the stock price decline they say nothing else is relevant but that's not the law in the circuit and it's not the law under durga duress stablish is approximate causation standard this court's cases analyzing to follow that standard and hold that last position can be shown in an infinite variety of ways not just one way not just a corrective disclosure that admits the fraud or what they're now saying mirrors the false statement lloyd expressly rejects that requirement and the facts of this case illustrate why point if can't be constrained to proving last causation simply using the defendant's words there were six stock price declines in this case that we allege that summary judgment caused our loss the district court dismissed one of them which was the firing of the c e o a surprise firing which had analysts inferring that there were major problems at the company and caused a massive stock price decline under the court that judge campbell or under the test the judge campbell used he found that we hadn't made the requisite connection because we hadn't shown that the c e o gillette was fired specifically because of the concealed product problems is that i guess is that is your argument there that you can't just pull that out of all the other facts that you can't view the firing in in a vacuum well that if that were all you had that would be trouble for you there are two points your honor the first is yes the metzler says that the declines can be looked at all together and multiple at the kleins can lead to loss causation and the second point is that the court applied a rigorous test in this case ders proximate cause ation standard is intended to exclude losses for plaintiffs when when they're not connected to the fraud the so called you know plaintiff insurance investor insurance that's not what happened in this case for each of the declines there was a connection three of the declines on july twenty ninth two thousand and ten february  two thousand and eleven and then the final decline in february two thousand and twelve the defendants expressly connected their disclosures to both the heat defect and or the l p m defect in the financial ramifications of those defects they expressly said for example in july two thousand and ten when they had previously fraudulent we concealed the existence of of the low power module problem we have this low power module problem in addition they took down their guidance by one hundred million dollars and internal documents establish in the defense and have not disputed that that guidance takedown was due entirely to revenues lost from the l p m problem that wasn't disclosed to the market but it's clear the one hundred million dollar revenue guidance reduction is related and was directly caused by the l p m problem the reason they lost revenues is because in order to remediate the problem in order to make their customers whole they had to take away because they were supply constrained from sales in the market the february two thousand and eleven decline is similar in that on that decline previously the defense had said had said that our warranty reserve covers this entire problem well they took another hit on the warranty reserve and they also reduced guidance again or misguidance and the c e o specifically said the reason we missed guidance is because we steered modules into the remediation this was a problem that investors believed was already under control the final disclosure also reveals  both the heat degradation problem for the first time that have been fraudulent concealed for years and a massive warranty charge relating to the l p m problem originally that it was it was twenty seven million dollars something around twenty seven million dollars for the l p m defect at the end it was over two hundred million dollars in warranty and all throughout the class period the defendants had said we have this in our financials this is all this is all covered and the analysts after that february disclosure were shocked and they said you told us this was all in your financials citi bank said on the last in scaw the third of november i asked you about warr expenses you said that it had all been taken into account in the financials stiefel nicholas we expected this had been resolved already headlined the ghost of manufacturing excursion these analysts thought that it was over returns with a one hundred sixty four million dollars in charges so those three declines are directly connected to express revelations of falsity there the mirror image that lloyd says we don't need the two other declines are also important in may of two thousand and eleven in april of two thousand and eleven excuse me defendant eaglesham went to the first solar board and said this he degradation problem is going to cost us between thirty and sixty million dollars in  revenues for the rest of the year two thousand and eleven they went out to the market and announced disappointing revenue guidance and again internal documents show they took their guidance down to account for the lost revenues from the degradation problem and the defen plaintiffs need to prove proximate cause ation and economic loss all right if we if we do get past that and say there isn't that the district court erred into terminating this conflict must be reverse no i don't believe so your honor because that the rule that the court applied which is which is that the very facts misrepresented or omitted by the defendant were a substantial factor in causing the plaintiffs loss that's the rule set forth the nuveen the court follow that rule the correct rule that's approximate causation rule it's not a more restrictive rule that applied because of factual circumstances in certain cases that arose in the circuit it's the broader pot proximate cause ation rule and that and lloyd confirms it lloyd says we need to make sure that the corrective disclosure relates back to the prior misrepresentations well i mean if you get if you apply claims fail that the two disclosures in may of two thousand and eleven in december of two thousand and eleven don't have a revelation that connects this financial performance to the fraud expressly those those declines can be viewed holistically with the rest of the case but each of the other revelations it's a mere fact or fact a splitter i mean for the first year and a half of this class period the defendant's fraudulent concealed they had a massive product defect and then they disclosed it and the stock price dropped so the only thing ok let me just you said two of them might not get past the revelation of falsity to what you said holistically they do correct your honor so it got a little bit like when you do hostile work environment that you can go to things outside the statute of limitations to prove the hostile work environment that's within the statute or is that is well it's similar to what the court did in lloyd and what the court expressly said and that's are which is that the lines themselves can be viewed together to determine whether  whether the proximate cause asian test has been met so these two these two declines and the thirty that you're talking about is one of them the c e o firing no that's the that's the third decline that one also judge is is one that depending on the test and depending on the rule could come back into play but i'm talking about the ones where we established direct a direct link between the costs of the remediation or the that the write down of the inflated modules that they were covering up with the accounting fraud and the guidance reductions or the or the revenue misses those are the two and they don't disclose this is the reason and that is precisely why we can't have a rule that requires that because the defendants in december of two thousand and eleven circulated an internal conference call script they had an earnings call spreads that identified this write down that they were going to have to take in the script they attributed a certain amount of e p a s decline party to that right down and there was a note in the script and the note said not sure we want to say this or say it this way and ultimately they didn't disclose the reason that they had taken it down and that's and that's at the supplemental excerpt of record in our tax still not quite i actually want to pin you down on s so what changed when our chief asked you was in the district court said if we court to not apply a revelation of falsity test that i said if that was to do that but you would but the test that the district court looked at to determine that we would lose was one that the market must actually learn that the defendant engaged in fraud and reacted to the fraud itself that's different then that's different then was this false statement correct it was the practice that was concealed by the by the fraud revealed that's did they commit accounting fraud and you see in their briefs they make this point they say we never restated we never the f c c never investigated us their position is that unless the market knows that they've been defrauded specifically there's no lost position in that that again omitted to tell the market in fraudulent concealed that they had a module defect and then disclosed it at the end of the class period the defendants had fraudulent concealed this problem where there solar panels didn't work well in the sun and then disclosed that during the entire class period the defendants the defendants kept telling the market this warrant our warranty covers all of the expected charges arising out of this problem and the district court found that we establish a tribal issue of fact that that was false and at the end of the class period there was a one hundred twenty five million dollar warrant to surprise so that corrects the statement that our that our warranty covers covers these problems so i think that we even if the court applies a more stringent test that does require the defendants to utter some words correcting the falsity we certainly survive and we're we're well past where the plaintiffs were in doubt we're well past where the plaintiffs were and burson where essentially it was an past that standard and how do you deal with oracle will oracle was a case that oracle was a case where the court first analyzed because the plaintiffs had alleged it whether the declines in the disclosures themselves but the market on notice of the fraud but the court didn't stop there the court when that went on to look into to determine what caused the fraud and the fraud there was or what caused the stock price of klein excuse me the fraud there was a product defect eleven i and the court looming and people had stopped buying for those reasons that's what the analyst said and they were doing channel checks internally with customers that's what the that's what all the customers said in discovery so a court in oracle did look past what was disposed to the market and looked to see whether there was a link all of these cases that the defendants rely on involved cases where there was no false statement and no sign or in apollo for example the disclosures where the false statements were ruled but as a matter of law the market doesn't rely on an actionable puffery the others the other statements in apollo had been had been disclosed so the truth was already on the market of course there's no link there but agreement that the law's clear that there's really no disagreement now the reason the case is here is because of section one two nine to be that there's a disagreement and we had a motions panel look at it and they said ok it's going to come up but this is this it goes to our jurisdiction so we have to examine an ab initio here as to whether there's a real disagreement both of us say there's no real disagreement so what do we do with the case well if you're right in your arguments we have no jurisdiction and we would dismiss the issue before us on the question of the section twelve ninety two b and you would send it back down for you to do the work we can't decide the case you're arguing to has all we can decide is whether or not there's a substantial difference requiring us to make a decision both of you agree there is no one so i'm wondering why we're going to get to the issue you're arguing as a matter of subject matter jurisdiction it seems to me you've convinced me then that from your arguments that there is no substance substitute for any problem that the district court has put up to us therefore we don't have subject matter jurisdiction therefore we should dismiss to get it back the trial court go toward we agree your honor and  move to dismiss on those grounds lloyd resolved any lingering doubt if there were if there were any in the first place about whether there is a rule that requires plaintiffs to to establish l way through the defendant's disclosures and what they say to the market lloyd quote of the supreme court and said proximate cause ation is the standard and proximate cause issue can be established and in for infinite variety of it is so we have renewed our think i have two minutes and thirteen seconds for a few points first in terms of what the plaintiffs were arguing it's not proximate cause it's a it's an argument that's been rejected twice by this court it's the impact test or and lose specifically rejected the impact test it's a but for kind of test not a proximate cause as it says because you've got a problem that led to a reduction in guidance that was announced and that led to a decline in the stock price oracle in loose right on point and on oracle the council only record referenced one part of oracle page three ninety four of oracle refers to the accounting fraud allegation the court lays out the exact reasons if o j actions auditor resignations all kinds of ways for falsity be revealed not just from the fence on words but the test is revelation of falsity finally on the jurisdictional point the issue is whether reasonable jurors could advocates which believe strongly in our position that we think that judge campbell is a reasonable jurist absolutely absolutely and he found that there was a basis for disagreement we we oppose the motion dismiss because we believe that that and that's one of the three parts of the test that he's correct that in that there is a reasonable a reasonable jurist could disagree with that of course here where opposite ends of the spectrum course and we're not in a position to overrule the hostess you course even taking it on this limited area because we're just a panel of three it have to go and bank if but earlier on you indicated to me that you could to get this within the scope of proximate cause but now you tell me that no there's a different test it is not all within proximate cause if you changed your position earlier no i may have misspoken i may have misspoken what i was saying is that what plaintiffs were just saying is they were arguing for the impact test the impact test is a test that's been rejected by the ninth circuit twice and that says that you can have a misrepresentation which leads to financial problems in the financial problems are revealed you can then say that that qualifies as revealing falsity as a form of proximate cause that has been rejected by the ninth circuit it's what's in oracle and lives that's what i was saying and you understand why of course that we can't change any law correct and so we have to decide your vision of the law is correct and not overrule any other cases correct and that's what i was saying this court has done with respect to dow already thank you counsel the case just are to be submitted thank you for your arguments and very helpful to the cordon i think somebody left their glasses there is that yours