employing the morning may please the court my name is doug will and i represent lead plaintiffs to and to tional investors who are representing a class of investors of chipotle a mexican grill a restaurant chain that focuses what we allege here and what the nd circuit authority state is you can look to the nature of the amendment in as a way to get there to vacate the judgment that's what happened in the way i'm skase that's what happened in the in the c case where and in the the s a i c case is almost identical here in that in that case the judge had said well there was at the at the time there was a contemporaneous trial we moved and i was actually counts on the case we moved with an amended complaint that include information from the trial transcripts we do both at once if the complaint merits our consideration we would automatically then underlying charge and oh yeah i think if you look at the nature of amendment and given this court strong preference for resolving disputes on the merits that you could  manifest judgment and newly discovered evidence we're saying though in the context of when there's a post most in judgment that where there is a minute complaint provided you could look yes you look at the rule fifteen standard in connection with the fifty the davis decision that was a case that involved a post judgment motion to amend the complaint and the court looked at the complaint and it added a new claim there and said as long as you mean rule fifteen and you look at the need to remand then can the amendment survive a futility analysis or any other types of are here we have a futility argument that the judge ruled upon but yes you could look at the nature of the amendment under rule fifteen and determine that it was a clear error of law are you that's that's what's that's what foemen itself says and that's what s a i c says that you look at the nature of amendment if that we can show that the judge was wrong in finding that our claims were filed all under s a i c under williams and under a  information that you thought you knew and that's what and who are considering was not available until after the nd amendment complaint was dismissed what i'm saying is we got information both at that information is additional information assuming your motions were timely you know whether it was additional information was not available to me like and when and then i would say we were able to put have sufficient information to put together the proposed rd amended complaint after the judgment we had the piece a lot information we received e mails that you know were on the air from different points in time we got it all together and the point is we let the court know that this the judge disagreed but we informed her all along we are getting these in for this information piece mail and we want to present a rd amended complaint at the time of the nd amendment complaint ruling she said i'm sorry that's all futile we've got additional information that we told her we were going to get we put that in the rd commend them in the complaint and we say ok well we've now cured all the identified deficiencies that you have we have now state of the claim under twelve b six and under williams n s a c s is it you can allow us to file a rd amended complaint and she said no content let's turn to the merits ok i have to give and i don't have much time left for that but i think i'll give you each five press release from november th of two thousand and fifteen so there are two separate claims we allege that they violated items three or three or five or three by and at a minimum try to be brief that they had ten outbreaks in the course of  now all food borne illness the c d c determined that for each of these ten outbreaks there was a linkage to at the to poly here now in some instances there they was the only restaurant involved in some court did here was referred back to the risk disclosures that were in the ten k at the time which was fogged in february of two thousand and fifteen and said well we're she's going to incorporate those by reference our argument is that filing of their forms there was one or two that were filed that that occurred by the th two or three perhaps that were filed that occurred by the time of the february two thousand and fourteen but the  bulk of them and that's why we scaled back as you've said ok well one or two may be a small number as they say in their risk disclosure but when you get to october of two thousand and fifteen they've had ten that's not a small number anymore in the course of a year so they made no disclosure about any of those rescues publicly known in any event no for the most part they were unknown or at least they were known only in a localized situation that's our point they were concealed a lot of these didn't even become public until we found them in our complaint so and what we've seen here is once they did that what were essentially proves our point from which we draw inferences is the our proposal and the complaint were and that ties into the misrepresentation claim because it's actually talking about what happened financially with respect to that that outbreak which is that when the outbreak was announced publicly they suffered a twenty percent drop in sales when they issued their false press release on november th sales rebounded and then ten days later when the c d c said wait a nd there's more happening in or then we believe sales dropped again so there's a direct financial consequence of the disclosure of these outbreaks and if i could just have one more minute talk about the misrepresentation claim that in the in the in the defense made a false statement that health officials had concluded there was no ongoing risk from this incident and that's just flat wrong that is just flat wrong they had no reasonable basis to make any statement about what health officials had concluded if they'd said publicly believes there's no ongoing risk we have a much different case but they said health officials concluded that there's no ongoing risk so we have and we bolster that where we have e mail and telephone communications alleged in the complaint where health officials said listen guys there's you have this eco outbreak here i know it's now impacting your stores in wash and oregon we think this is a much bigger we are alleging the rd amended complaint go back i mean i mean there may be that the general allegations are the same we i think we added some i just want to yes i mean our point is the entirety  we we added new allegations on a lot of factors so we're presenting the court with what we believe is our last and best here and i mean we did not directly appeal that so we're saying that statement is flat out wrong because they were told before and then they were confirmed after in the april there was an  april th letter where you know and there was a whole back and forth that we allege in our complaint between chipotle a and the c d c where they're arguing about should you keep issuing these you know these updates and they're not used for this on april th the c d c responded in a confirmatory letter not fraud by hindsight they're confirming the situation that was existing at the november th timeframe and they said we disagree with your position that there was no ongoing risk at the time of the press release and said no health official would have said there's no ongoing risk so what the court did here is they they took at the  what i would say plausible readings of the press release and ruled that there's was more plausible and that on a twelve dollars to six dollars motion that's just not the way to do it and we also allege that those just to make a final point there are four cases three of which were mentioned by appellant one of which ignored by appellant that basically explain how this works and judge hall was on one of these decisions so i know williams  circumstance where the court had at st partially denied partially partially granted a motion to dismiss but partially denied as a result the plaintiff below said well i'm not going to mandate got at least part of my case then the court and reconsideration is certainly reversed course dismisses the whole case pulls at the rug out from under the plaintiff and all of a sudden the plaintiffs up on appeal saying what the heck happened and filed a rule sixty beast six motion which is assessed under a different standard to have that judgment overturned before those three cases are mentioned you can see the difference between all three of those cases in this case where the court gave plaintiffs two bites at the apple and by the way strongly hinted if they want to rd bite at the apple they better do it by amending before she issued her judgment in response to letters so she gave them one extra by the apple than those other three cases and strongly suggested they take advantage of the  fifteen has to mean something that has to be some finality so here this case is even an even worse posture going fogel where this court just last year said you don't you don't automatically have this right to a rd bite the apple and by hearing the directly but out through this court what is that new information what you heard in was the same thing apparently the judge failure heard there something new that we got there some piece of the puzzle that we needed some extra time that's an accurate summary of a pretty vague statement because what we do know is all the specific information they had there's two sources of pieces of information no new piece of information and there's two sources of the allegedly new pieces of information one source is the derivative lawsuits that were pending in colorado where judge failure correctly found and i i represented the company and the defense there so i know that the court had knowledge that the that information had been made public like a year before the time of the nd man a complaint and because it had been public a year before when the court issued the final motion isthmus which was before the opposition brief was due to the nd amended complaint the court said well we might as well unseal because we've already made this public anyway there's nothing left really that's necessary to keep under seal so the court judge really looked at this and said there is no new information in that  carefully noted this that it was very very in response to in the briefing as to what they got and when they got it they ultimately said that they got some information within two weeks of the distal final decision that could have could mean they got it two weeks before the final decision could mean a day after we don't know but what we do know is that they sent letters to judge to the court before the judgment was entered and those letters laid out every piece of information that we can see that could possibly have been relevant that was including the p tech we've been able to find that  key that that final piece of the puzzle that somehow allowed them to tell a story when they were telling a pretty good story or with the nd amended complaint and in the letter writing campaign that they did which demonstrated they had the information at least weeks before and this too much longer but not before and to the extent there was some magic secret puzzle on locking key piece they certainly didn't make a record of that and that maybe they'll come up and i won't have a chance to respond or point out why i'm sure that has it you know i have no doubt in the faith that we'll be able to find some paragraph changer one piece of information but we've never seen it we don't know what it is and certainly the court below did not see it not enough to say that the court abused it discretion in rejecting that and deciding that enough was enough that you can't just take a leave to him and sit on all this information get him by the way in response to a letter writing campaign what they said was we are not going to move to a man now even though the court had strongly hinted that that's what they should do and given all that the court properly entered judgment and the only appeal that's before this court is whether that was an abuse of discretion intertwined with the with the procedural posture as well i think that's what he said i think so i'm not sure how that could be there is no newly discovered evidence there's nothing that's their choice so it really is a separate issue but i do want to get to the m because well i want to i want to get to them simply because they're wrong on the merits whether this court gets them or not that's obviously a court decision whether as you did in focal as this court did in fogel we don't say to the world that you can play this game you can sit and wait and horrid evidence as i think the judge below said and just spring it later somehow claiming it's newly discovered but on the merits let's talk about the merits because that too is where the nine through five hundred and thirty two and they are they they are about as clear and specific about the the the warrant of risks are as clear and specific to the risks that do end up materializ as pretty much you're ever going to see chipotle and that their food was prepared from scratch they warned us in the risk disclosures their food is prepared from scratch with the majority prepared in our restaurants instances of food borne or localized illness could cause the temporary closure of some restaurants or result of negative publicity thereby resulting in a decline in our sales we supposedly specifically we may be at a higher risk for food borne illness outbreaks than some competitors due to our use of fresh produce and meats rather than frozen and our reliance on employees cooking with traditional methods rather than automation our sales have sometimes been adversely impacted so we're not even in a case where a plaintiff can claim they said may and it was had this is a situation where chipotle he said this can happen and by the way it has happened hon c argued that the ability to trace was not as strong as it could be because of the practice of preparing food on site instead of exclusively at a commissary that is very much in the weeds and not the kind of thing that kind of minor operational thing that you would ever disclose but and but what you partly did say continue with their disclosures is that they had made a significant commitment to serving local organic produce  present additional risk of foodborne illnesses given the greater number of suppliers involved in such a system and the difficulty of imposing our quality assurance program on all such suppliers i mean right and what they didn't disclose after that is that because they were buying firm local farmers and from farmers markets they could not identify and remove contaminated agreements ingredients that engendered supply chad that's what they said is necessary after the material that you read or your i don't think the plant i don't think the plant just blow away their complaints did actually lack the ability to tr what they say is that there's an issue tracing farm to table they don't say there's no ability to trace ingredients and that allegation you know with with the thousands with thousands of local suppliers and with using including farmers markets and the notation that that those practices are going to lead to an increased risk of food borne illness this additional  at the chain is is that because you can't trace it they're not they're not talking about food borne illness they say when food borne food borne illness appears you can trace the source what if these  what they they actually alleged is that supposedly had originally prepared greenson a commissary they supposedly made a switch that's what was supposedly different in late two thousand eight hundred and fourteen and as a result combined with the inability supposedly to trace because of that switch that's what led to all these problems the fact is judge failure carefully went through each of these outbreaks which they all sort of schmaltz together there is eleven dollars incident of the complaint about switch the switch the only switch that they allege happened is that they went from because previously probably had going back years disclose that the majority of their ingredients were prepar locally the majority had been already local in late two thousand and fourteen as plaintiffs allege pollie changed its practice for tomatoes to start chopping tomatoes locally that is the only specific instance that plaintiffs give anywhere and it's tomato it issue the other incidents were either unsolved or in some cases they were not food borne illness they were norovirus which is from employees being sick and in fact after the tent you gets filed the major outbreak becomes there's only there's only i think two more two or three more outbreaks that occur during the class period but the major one that occurs which gets a lot of attention has nothing to do with food it's about employees or customers being sick and allegedly transmitting norovirus to the rest of the know your honor it is transmitted through contact sneezing it is nothing to do with the vegetable  and and that's where and judge failure she goes through these in some detail and she parses through in the st couple go rounds that how these different incidents really don't match up to a  overturned and by the way the final statement i'd like to make a normal over time is i mean over time i guess is the press release you know the press release again just like the reese disclosures they really bear reading because the press release and  underneath it it says all test results are negative for eco i know ongoing threat and the whole rest of the press release talks about reopening those forty three restaurants plaintiffs never do and they certainly can't allege that it was not true that they were reopening they did reopen they can't allege that there was ever another incident or there hasn't been as far as i know it certainly has never been reported those forty three restaurants did reopen no more incidents of those forty restaurants exactly what the press release says so what it points to below that they were faulted for they pulled out snippets of mormons out of the press release without even citing the press release to the court let alone the title and tried to tried to create inferences that are not plausible  unfortunate case ok so unfortunate case of warned about risks that did materialize leading to bad outcomes which had no by the way no financial impact until the th quarter and so and plaintiffs don't apologise don't argue otherwise and by the way did quarter the financial impact start to be understood as a mid quarter disclosure about the th quarter impacts none of that's at issue here but this is not a situation where a company was focused on or even there's allegations that suggest a cogent or stronger compelling or whatever standard you want to say effort to commit securities fraud is case where it's a restaurant they had some unfortunate incidents which they specifically warned about and very specific to poli because it prides itself so much on trying to use locally sourced food and it and it sells that by the way they had another disclosure that said if we stop doing that we may lose customers because of that you know they're sort of can't win either way but they disclose all of this the bad wrist materialized a couple instances before that ten k and then a few more before the  q and then and plaintiffs have below have taken this to try to turn the securities fraud they failed to two parts of the apple they didn't appeal either of those decisions and then they say we get an automatic chance for this court to pick this up to no vote and revaluate judge failures two very thoughtful carefully reasoned decisions that we believe is not the standard us court if this court were to do that we believe you should affirm judge failure and thank you very much for your patience and let me go over m allegation from chipotle is website that they had included that talked about how important traceability was to their food safety practices that's just one example there's i can't sit here and go through every one but we certainly added new copy yes and this is after the class purge of public knowledge that farm to table ingredient traceability is critical to the company's food safety program that is a disclosure that they had added after the fact that we had and then and the quote actually emphasizes the materiality of the traceability which is exactly what happened here is you know they had no fungal whether they had the ability to trace some level from the supplier to their distribution center they couldn't tell the c d c at any point in time information from the distribution center that went to the restaurants they had no idea they had no ability to prevent food borne illness outbreaks from occurring through one through the commissary switch and two through the traceability aspect and each time one of these outbreaks happen the c d c went to them is that please give us your traceability we need to figure out the bigger health problem and they said well we don't have that information we can't do that that well even again referencing the october tank you we have allegations that as late as september of two thousand and fifteen heidi we request who is the person in charge of these outbreaks attended a food conference where she said we're going to start this whole traceability problem so we could get farm to table going so even right before that ten q they had no ability to trace it so i think judge paul you hit the nail right on the head with nothing in those wrist disclosures talked about these they're very generic they said on a small number of times customers get sick in our stores they said if there's a food borne outbreak that a car's it may in fact us adversely but that was made in february two thousand and fifteen now we're talking about october th two thousand and fifteen by then they have had ten specific outbreaks sure some of them were norovirus but they didn't disclose any of them nothing they just said there are no material changes in our ris disclosures even though they completely switch their ration that food could not that it was done in a central commissary there's no testing that goes on in there in one thousand nine hundred stores so they had no ability to stop food on the front end and they had no ability to take remedial steps on the backend because they couldn't trace back to the source it's a whole cycle and it's all interrelated we draw that you know we have the commissary switch ten outbreaks occurred they couldn't assist and they had to disclose that yes i agree would make a nice consumer case but we're here on yes i mean as individual outbreaks occurred that's why the c d c they couldn't solve these things they couldn't say what's going on but they claim we will determine only that it's not futile ok then i'm happy to go back and make these arguments with and we have i wish we would have to revise our complaint the whole because we've obviously cut a lot out but i'm i'm happy to have that argument with the district court i would be i think arguments i think are hourly patients enough you know we stayed with a claim for securities fraud based on the violations of the ten q and if i could just make one last statement about the press release that  statement i mean you know i say we were relying on snippets i invite the court to read the whole thing they talk about what's happening nationwide we took all this action nationwide but the statement about what health officials concluded is arguably the most important part of that because they're pointing to the government in the saying the government or the c d c here again bus authority to reopen these stores the fact the matter is the c d c or any health official had concluded nothing they made knows in fact they told the opposite that these outbreaks that this is expanding beyond washington and then even then on november th there is a we have allegation what we did was told the f d a we still can't trace these things we don't we can never determine the source of this we have no ability to find out the food that came from the distribution center that was served in our restaurants everything they said was in the past tense the false impression that was given by the press release was that this incident whatever incident means and we if you it's a plausible suggestion the incident means the entirety of the outbreak including the investigation was over and that's how the media responded that's how customers responded because you the bounce back and then ten days later the c d c and came out and like they said they would and they kept investigating they said we've got all these additional outbreaks occurred across the country so to say that health officials concluded there is no basis for that they